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taxes on property rentals

Posted: Sun Jul 24, 2022 11:39am
3 replies92 views3 members subscribed
Nevilleg

Posts: 3

Location: Cabo Roig

Joined: 18 Apr 2022

has anybody submitted the returns since new legislation came in and know where I can get the documents in English 

Regards

Davebev1

Posted: Sun Jul 24, 2022 11:03pm

Davebev1

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Posts: 1560

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Location: Playa Flamenca

Joined: 7 Nov 2017

Posted: Sun Jul 24, 2022 11:03pm

To which new legislation are you referring?  

Nevilleg

Posted: Mon Jul 25, 2022 7:19pm

Nevilleg

Original Poster

Posts: 3

Location: Cabo Roig

Joined: 18 Apr 2022

Posted: Mon Jul 25, 2022 7:19pm

Davebev1 wrote on Sun Jul 24, 2022 11:03pm:

To which new legislation are you referring?  

The legislation requiring owners to submit  quarterly returns of rental income - see below

Portfolio Servicios Inmobiliarios S.L. SOLICITORS- LAWYERS INFORMATION AND TAX IMPLICATIONS FOR RENTAL PROPERTIES AS A NON-RESIDENT I. SUMMARY OF THE REGULATION IN THE VALENCIAN COMMUNITY Tourist dwellings. Valencian regulations establish that “tourist dwellings” are real estate properties that, regardless of their type, are repeatedly let out for tourist, holiday or leisure use, in exchange for a price and with immediate availability, for an agreed period of time. It is deemed to be on a “regular basis” whenever any of the following circumstances is observed in regards to the property:  If it is let for tourist use by enterprises managing tourist dwellings,  If it is made available to tourist user by its owners or title-holders, regardless of the period of time for which it has been hired in case hospitality services are provided,  Whenever tourist or advertising channels are used. More detailed information on the applicable regulation to tourism enterprises in the Valencian Community is available on the Valencian Tourism Website. Long Term Rentals. This differentiates from the above by the use that is given to the property, not the duration of occupation. If the property is considered the main residence of the tenants, generally because it’s rented out for a longer period of time, and they are usually given the option to extend and/or renew the period of occupancy. License Registration. The applicable regulations require all tourist dwellings to apply for its registration at the General Registry of Enterprises, Establishments and Touristic Professionals of the Valencian Community (“Tourism Register”) by means of a communication from stating that the properties are being allotted for tourist use, on a standardized printed form addressed to the Territorial Tourism Service (Servicio Territorial de Turismo) of the province where the dwellings are located. Also commonly known as a Tourist License, please ask for further information for how to apply. Please also note that the Valencian Tourism Act provides that any advertising carried out for tourist homes shall necessarily include the registration number and category of the tourist property. Compatibility Certificate. This certificate is required for the tourist dwellings license application and is requested from the corresponding Town Hall where the property is located. The purpose is so that the urban planning department of the town can certify that the property is compatible for touristic use, according to its facilities and location. It is now obligatory to present a copy of the obtained certificate together with the tourist license request (something which before was not required) but it can take some time to process and be received, due to the overwhelming requests being presented at this current time. Until this has been acquired, it’s not advisable to continue processing the tourist license registration. First or Second Occupation License. Upon registration of a tourist dwelling, you will have to supply a copy of your first or second occupation license, also known as now as a “Declaración Responsible” or Statement declaration, which states your property meets the requirements set by the local Town Hall for it to be considered fit for use and ocupation. This normally requires an architect’s report to be carried out on the property which is handed in to the technical department in the Town Planning Department, along with any other required documentation and the signed declaration. Energy Efficiency certificate (EEC). The applicable legislation Read Decreto 235/2013 dates 5th of April states that it is obligatory to obtain the Energy Efficiency certificate when renting out homes, apartments, houses or commercial premises, except when the property is not rented out for more than 4 months a year. This normally requires a professional architect or qualified engineer to visit the property to prepare a report and to give the property an emissions grade, which is then presented and registered with the corresponding department, depending on where the property is located. Police Registration of Guest log. The owner or property manager is required to identify all travellers over 16 years old, by filling out the form "Parte de Hospederías". They must also create a Travellers Registration Book and all guests must be registered with either the local, or National Police or Guardia Civil, depending on the municipality where the property is located, within 24 hours of arrival. The rules were introduced to bring the rapidly increasing number of rental properties into line with hotels, which have been requesting guests' passport details for years. Every traveller (aged 16+) is required to sign the Travellers Registration and failure to comply with these obligations may result in fines ranging from €600- 30,000 depending on whether mild or serious misconduct (L.O 4/2015). Each rental property must be registered with the Police, even if there are several units in the same building owned by the same owner and each property will be assigned an ID code to be uses as password into the Guest Registration digital system. II. TAX IMPLICATIONS FOR RENTAL PROPERTIES AS A NON-RESIDENT Taxation in Spain may appear to be complicated and can sometimes cause confusion for owners as to if it has to be paid, when and in what country. Below you can find information of your tax implications on rental income, however it is a general guideline, so if you would like more detailed information, we would have to study it on a case by case basis. Every home owner with a property located in the Spanish territory has to declare any rental income received and pay the due tax to the Spanish Tax Office before the set date deadlines. Whether you are a Tax Resident or non-Resident, live in Spain full time or not, rent out all year round or just part of it, or for renting out any other additional properties that might be in your name. All owners that appear on the corresponding title deeds for the leased property must pay the due tax according to their participation percentage. Generally speaking, there are two fiscal situations to take into consideration:  Non-Residents in Spain that receive a rental income from a property that you use, but may occasionally also rent out.  Spanish Tax Residents that receive rental income from a property in Spain or abroad. As a non-resident, the rental income of a property should be declared in Spain, even if you have also declared it in the country where you are a tax resident. If you are a member state of the European Economic Area (EEA) you will not have to pay twice as there are dual tax agreements in place, but depending on each country, it normally has to be declared and then claimed back and deducted as a double taxation from the country where you permanently reside. The declaration should be submitted by all property owners and the tax amount paid is calculated according to the percentage of ownership they have for that property. Remember that the tax is also calculated depending on the country where you are a fiscal resident, not your nationality. For property owners that reside in a member state of the EEA, a lower tax percentage is applied compared to the tax rate used if you resided in any other country in the world. There is a tax form especially for non-resident property owners where this rental income can be declared and it should be declared every time some is received, but alternatively it can be grouped together and presented on quarterly declarations, which is the easiest option. The difference from the rental tax and the normal non-resident tax is that the rental tax has to be declared during the current fiscal year, whereas the usual non-resident taxes aren’t presented until the following tax year. There are set dates to present the declarations, which are as follows: 1 st Quarter January-February-March Before the 20th of April 2 nd Quarter April-May-June Before the 20th of July 3 rd Quarter July-August-September Before the 20th of October 4 th Quarter October-November-December Before the 20th of January *the Spanish Financial year starts January 1 st to December 31 st . The deadline to be able to set up the payment by direct debit is before the 15th of each month. Any rental income received has to be declared during the corresponding quarter. If no rental income has been received, you will not be required to present a declaration, but you will still be liable to declare your regular non-resident property taxes the following fiscal year for the time the property has not been rented out. The tax is calculated according to the net rental income monies received throughout the corresponding quarter (not on total profit made). However, there are some deductible costs for Spanish Residents and property owners from member states of the EEA that can be applied, meaning that you can declare total income minus permitted deductible expenses. If you are a fiscal resident outside of the EEA, unfortunately you are not entitled to apply any deductions to the received income. Expenses that can be deducted have to be paid for by the owner, but are associated with the rental property in question and only for during the period it was rented for. Any invoices or bills that are deducted has to be legal and above board (i.e. tax paid), containing the name of the property owner, fiscal number, property address. Shop receipts and tickets aren’t accepted as deductibles; because you can’t prove that they were either paid for by the property owner or they belong to the rental property. Permitted deductibles can include utility services, telecommunications provided, local council taxes and charges (but not fines or late payment fees), administration and maintenance fees, property insurances and depreciation values. If you bought the rental property with a mortgage, you can also deduct the monthly interest rates charges (not capital paid) and any policies or costs linked to the mortgage. The Spanish Tax Office (Agencia Tributaria, but also known as “Hacienda”) have stated regularly how important it is to declare you rental income tax, regardless of if it’s generated from holiday lets or long term leases. Don’t make the mistake of not paying your due tax in Spain, or confusing the rental income tax with the yearly non-resident tax declaration that you may already be paying. The introduction of the new Spanish rentals legislation means that the government can start to establish ways of checking if you are paying your tax correctly or not. This is now one of the biggest focus´s, to crack down on tax evasion. In fact, there’s even been mention that the tax office has employed the assistance of utility companies to monitor consumption rates of homeowners, especially those who claim to be out of the country. Also, given the new banking laws that have come into force over the past few years, there are ways for them to monitor account deposits and to confirm origin of funds. Another measure was to enforce the inclusion of the name and tax number of the landlord and/or tenants of the yearly income tax declarations, so it can be crosschecked to see if the other party has presented the corresponding tax declaration. C/Salvador Dali 8 - Pta 1 - Playa Flamenca - Orihuela Costa - Alicante Office: (34) 966.73

Davebev1

Posted: Mon Jul 25, 2022 7:44pm

Davebev1

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Posted: Mon Jul 25, 2022 7:44pm

This is not new. 

All non-residents receiving rental income should do quarterly tax returns. (Residents do annual tax returns.) Always been a legal requirement to pay tax in Spain on any rental income regardless of where you live. If you live in the UK then thanks to the dual tax agreement, any tax already paid in Spain is taken into account by HMRC when calculating your UK tax.

Tourist Licenses have been compulsory since 2015 for holiday lets but tax was always payable on rental income anyway, just Licenses were voluntary rather than compulsory if you only had one property prior to 2015.

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