Letting to friends and family - Page 4

Yip I was very happy with your answer and fully understand it. Not trying to look for reasons to bend the rules like people are implying. 

Just want to know that I can let family use it free of charge 

Thanks again. 

Hi Magicden,

I worked in an insurance/estate agency environment from 1985 till 2015 in the UK. This included mortgage related life assurance products, investment products as well as Buildings and Contents insurance products. I would draw your attention to the fact that a VERY important point has already been raised. (Insurance).

Regardless of whether a Tourist Licence is required or whether money changes hands, to protect yourself and new property, you ought to notify/discuss your thoughts with the insurance company involved. 

Contrary to popular belief, insurance company's do NOT look for ways not to pay a claim, rather they make a decision based on what details have been given on your application form.

I am not being a Scare Monger. Anything could happen to your property. EG, The vast majority of us are excited when going to Spain for a holiday. Very often we let our guard down, add to that the size of alcoholic measures served in many bars, even as an experienced  frequent visitor to Spain, despite my best endeavours to follow my own code, I've found myself worse for wear after a few drinks. The point being, it would not be a typical package holiday experience where there would be a support network on hand to assist.

Just a thought, only trying to help. Go with your gut, but be cautious and accept the consequences if something goes wrong.

Hope this helps in some small way.

Regards,

Donald.

This is getting ridiculous now...

This all boils down to interpretation. Your interpretation of the law and the Policia Local who may get called to the property if there is any disturbance or excessive noise from holidaymakers - sorry friends and family, if any neighbours complain. However you do realise that technically what you have just put ie the box of chocolates, the bottle of wine or the £50 note is technically payment in the eyes of the law. Even in the UK and would be classed as payment. Therefore if undeclared is technically tax evasion. A little extreme, but does stack up with Davebev's comments. I find it highly unlikely that anyone would let ''friends and family'' stay in the property for numerous weeks/months throughout the year without covering at least the utilities (especially with the rising costs). The law doesn't say you have to make a profit, however it does say you are liable for tax at the relevent rate on 'income'.

Just going back to your original question. Yes you can.

I would be more than happy letting my friends and family stay for free so that it is occupied and used.  I have to pay the yearly costs anyway !!!! 

Yes you do pay the annual costs, but you don't have to pay the monthly usage on utilities. My electricity went up from 90 Euros a month to 180 Euros a month when the new gas tarrif was added last year. Hopefully that will come to an end at some stage. I do though have a large 3 bed villa with pool etc. However that reply was not aimed at you personally but to highlight the offer of gifts in lieu of accomodation still constitutes a payment in the eyes of the taxman.

This is how Hacienda views donations/gifts/loans between family and friends as publised in a BOE of 15th November 2022.  All of you who have  eaten the chocolates, pocketed the €100 or kept the pot plant in return for family and friends having the use of your holiday apartment/villa fear not you haven't done anything wrong and don't owe the taxman anything. I have been researching this in Spanish and this is the most complete and easily understood article I have come across.  Clarity it appears was finally given by Hacienda in a BOE on 15th November 2022.

Bee

https://www.lavozdigital.es/economia/transferencias-familiares-amigos-importe-minimo-declarar-hacienda-20221117104728-ntv.html

The Treasury is taking a series of measures to eradicate illegal money exchanges. Transfers between family and friends and payments through Bizum have become very common, for this reason, the Tax Agency has now focused on this type of transaction to avoid illegalities . Therefore, it is convenient to know the amounts that are issued in transfers between family members to avoid fines from the Tax Agency .

In the case of transactions between family and friends,  be it a loan or donation , people will be obliged to inform the Tax Agency when they exceed €6,000.

Payments made with bills of 500 euros or more will also be notified. These measures also affect the transfers executed by Bizum . The public body may investigate the person who receives 10,000 euros or more through Bizum, and must include it in the income statement .

If you have a tax debt  you're in luck . At least if they are of this amount. 

The Treasury has announced that it will cancel debts of less than three euros and they will be derecognized in the accounting of the liquidations corresponding to public law resources of the Treasury. These amounts will be without effect from next Wednesday, November 30, 2022 , 15 days after the publication of the resolution in the BOE, which took place on November 15, 2022.

The purpose of this measure is to avoid collection actions that are of "null benefit" for the Public Treasury.

The question was about LETTING to friends and family,  ie if some pays you to use your property. Payments for use of a property are not loans, gifts or donations, it is payment in exchange for a service. The service in this instance is use of a property for holiday purposes. Normal household insurance is invalidated and there are decrees governing paid use of a property for holiday/tourism purposes.

Davebev1 you were the person who told us in Spanish tax law you were required to report "all " gifts to the taxman and you were the person who said if you took any donation or gift for the use of your apartment/villa it was considered commercial letting.  That is not correct in Spanish tax law.The taxman didn't make any distinctions as to what your family or friends  could give you a donation, gift or loan for up to €6000. The orignal poster nor subsequent posters never had your interpretation of "letting". The post asked  "was it ok to let family and friends use your apartment" as subsequent posts made clear. There was never a question of renting it out as a commercial let to all and sundry and that has been my interpretation of it and my argument that a gift of whatever for using your apartment is not illegal nor does it make you a commercial landlord as you continue to insist. So I stand by what the taxman says about donations, gifts and loans from family and friends as it applies to the original poster and as it applies to family and friends using your holiday home and offering whatever as a thank you . That is not commercial letting and nor  is the taxman interested in these gifts or donations up to €6000.  I rest my case. I won't be adding any more to this topic.

Bee