Tax on Rental Income in Spain

Clients that have a property let (either short term or long term) in Spain must declare their rental income and pay tax on it.

This note is really aimed at clients who let their property long-term and do not declare the rental income. This is illegal. Landlords need to pay rental tax for the days that the property has been rented and Non Resident tax for the rest of the year. (Those who are Resident should see our tax adviser regarding their Returns).

Rental tax is paid for the actual year, every quarter, so our clients need to provide the following each 3 months:

• Rental dates
• Amounts received
• Property charges: community payments, insurance, IBI (Suma).

For those clients that only do short term lets, you also need to declare the income if in total the property is let for over a month a year.

We also gather the declarations done each year and deduct the days that the property was let from the total amount of days when we calculate the Non Resident Tax, the following year. (Confusing we know, but Non Resident tax, as many of you know, is paid a year in arrears and we do not want you paying too much tax!)

We can also arrange for your SUMA or IBI to be placed on direct debit for a small fee.

The Spanish tax office, the Hacienda, have publically declared their intention to crack down on undeclared letting income. They have a manner of ways of checking properties. We really would recommend that you become legal….

Please contact Ana to arrange to make a rental tax return or with any questions.

Rental Tax in Spain

When you rent out your property being non resident in Spain you have to pay a rental tax every quarter, in January, April, July and October. If you only rent out the property short term you will have to submit the form in the corresponding quarter.

To calculate the tax it is needed the following information:

• NIE of any of the owners
• The rental contract (in the case it is long term rental) (copy)
• Rental dates
• Money received
• Property expenses:
• Council tax (copy of the bill)
• Community fee
• House insurance.

Our fees per person and for a couple are as follows:

ONE QUARTER: €100 (VAT included)

FULL YEAR: €300 (VAT included)

In case you pay for the whole year, this fee includes the non resident tax fee for the following year.

If you pay rental tax one year, the next year when we calculate your non resident tax we will deduct the days you have rented out and calculate the non resident tax for the rest of the days.

This is all quite confusing but we can help you through the process. We are very experienced in dealing with this now and here to assist you.

Please note this information is current at the time of posting.