Vacation rental taxes in Spain: a complete guide for homeowners

We will explain vacation rental taxes in Spain in detail, including what taxes are paid, how much, when, how to declare the house and some key tips.

Vacation rentals in Spain are an increasingly popular activity for both owners and tourists. However, it is crucial to understand the tax obligations associated with this practice to avoid legal and financial problems in the future. In this article, we will explain vacation rental taxes in Spain in detail, including what taxes are paid, how much, when, how to declare the house and some key tips.

What taxes are paid on vacation rentals in Spain?

Personal Income Tax (IRPF)

Income obtained from vacation rentals in Spain is subject to personal income tax. Landlords must declare their rental income and pay taxes on the profits. The tax rate varies depending on total income and available deductions.

Wealth Tax

If your assets exceed certain thresholds, you may have to pay Wealth Tax, which is levied on the net value of your properties.

Non-Resident Income Tax (IRNR)

If you are a non-tax resident in Spain and you rent your property, you must pay IRNR on the income obtained.

Real Estate Tax (IBI)

The IBI is a local tax that taxes the ownership of real estate, including vacation rental properties. The rate varies depending on the location of the property.

How much should you pay in taxes for vacation rentals in Spain?

The amount of taxes to pay for vacation rentals in Spain depends on multiple factors. Here I detail the most relevant ones:

Owner’s tax residence

  • Residents: If the owner is a resident in Spain, he must declare the rental income in the IRPF (Personal Income Tax) and it will be taxed according to a progressive scale.
  • Non-Residents: If the owner is not a resident in Spain, he or she will be subject to the IRNR (Non-Resident Income Tax). The general rate is 24%, but may vary according to bilateral agreements between Spain and the owner’s country of residence.

Total revenue generated

The exact amount of taxes paid is proportional to the income generated by the rental. In addition, in the case of residents, this income will be added to other possible income that the taxpayer has, which may affect the applicable tax rate.

Deductible expenses: It is possible to deduct certain expenses directly related to the vacation rental, which can reduce the tax base. Some deductible expenses include maintenance and repair costs, mortgage loan interest for the acquisition of the rented home, insurance, and the IBI (Real Estate Tax), among others.

Property Location: Depending on the autonomous community or municipality where the property is located, there may be additional local taxes or fees related to the vacation rental. These fees vary depending on local regulations and may affect the total amount payable.

Rental duration

In some jurisdictions, the duration of the rental (whether it is short or long term) may influence the taxation or applicable deductions.

Type of accommodation: For example, renting an entire home is not the same as renting a room. This may have tax repercussions depending on local and regional regulations.

Double taxation agreements

Spain has double taxation agreements with several countries. These agreements can influence the amount payable, especially for non-resident property owners.

When should taxes be paid in Spain?

The deadlines for filing taxes in Spain vary depending on the type of tax and your tax situation. However, you generally must file annual tax returns. It is important to know the tax deadlines and comply with them punctually to avoid penalties.

How to declare a property for vacation rental in Spain?

Declaring a property for vacation rental in Spain involves the following steps:

Legal registration

Make sure your property complies with all regulations and legal requirements for vacation rentals in your autonomous community. This may include obtaining specific licenses and permits.

Accurate accounting

Keep detailed records of all income and expenses related to the vacation rental. This will help you accurately calculate your tax obligations.

Tax filing

Complete and file your tax returns according to local and national tax requirements. Consider working with an accountant or tax advisor who specializes in vacation rentals.

Final recommendations for homeowners in Spain

  • Consult with a tax professional to ensure you meet all tax obligations and take advantage of available deductions.
  • Keep detailed records of income and expenses related to the vacation rental property.
  • Comply with local regulations and obtain the necessary licenses for vacation rental.
  • Stay informed about tax updates and changes in tax laws that may affect your situation.

Vacation rentals in Spain can be a lucrative source of income, but it is essential to understand and comply with the applicable tax obligations. Working closely with tax professionals and maintaining accurate records is key to successful management of your property.

At Vacation Marbella, we will advise you on all legal aspects related to vacation rentals. We know that each property and owner has unique needs and characteristics, and we are here to ensure that you comply with all relevant regulations. If you have a property that meets our requirements, do not hesitate to contact us. We are prepared to answer all your questions and guide you on how to obtain the maximum profitability of your property.

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