Owning a property in Spain offers great opportunities, especially when it comes to renting it out for additional income. However, before listing your home for rent, it’s essential to understand the legal, tax, and operational requirements to ensure a smooth and profitable experience. Here’s everything you need to know:
01
There are two main types of rental contracts in Spain:
Long-Term Rentals (Alquiler de Vivienda Habitual): Typically signed for a minimum of one year, following the Urban Leasing Law (LAU). Tenants have legal protection and rights to renewal.
Short-Term or Holiday Rentals (Alquiler Turístico): For tourists and temporary stays, often requiring a Touristic License, depending on the region.
02
If you plan to rent out your property for short stays, you may need a Touristic License, which varies by region. Requirements often include:
Registering your property with local authorities.
Meeting specific property standards (safety, amenities, legal requirements).
Displaying a registration number in advertisements.
Compliance with community and municipal rules.
03
Both residents and non-residents in Spain must declare rental income. The key tax aspects include:
Non-Resident Tax: Non-residents earning rental income in Spain must file quarterly tax returns and pay a flat tax rate (19% for EU/EEA residents, 24% for others). Deductions apply only for EU/EEA residents.
Income Tax (IRPF) for Residents: If you are a Spanish tax resident, rental income is included in your annual tax declaration, with deductions available.
VAT (IVA) Considerations: Generally, long-term rentals are exempt, while short-term tourist rentals may be subject to VAT if additional services are offered.
04
he Spanish government has introduced a new regulation requiring property owners who rent out their properties to register and obtain a Rental Registry Number
05
Draft a clear rental contract stating terms, duration, deposit, and responsibilities.
Ensure compliance with regional rental laws.
Register tenant deposits (where required by law).
Provide official invoices if needed.
06
Managing a rental property remotely can be challenging. Consider:
Hiring a property management company for guest handling, maintenance, and check-ins.
Using a fiscal representative to receive official notifications and ensure tax compliance.
07
Failing to declare rental income or obtain the necessary licenses can result in fines and legal actions. It’s crucial to stay informed and work with professionals to ensure compliance.
At KD Tax Expert, we help property owners navigate tax, legal, and administrative requirements, ensuring a smooth rental process. Contact us today to learn how we can assist with your tax filings, touristic licenses, and compliance management!
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