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!)

Fees for rental tax are:

125€ per quarter (IVA included)
300€ per year (IVA included) Includes the fee for Non Resident Tax the following year.

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 at office@spanishsolutions.net to arrange to make a rental tax return or with any questions.