jases1000

Hi all, I've recently bought a place in Spain and apart from family use I will be renting to friends. This all appears to be going well until I was told that this is illegal in Spain as you need a licence for this. Can anyone let me know if this is the case and if so how do I get one and how much do they cost - confused :curse:

Beachcomber

You will find some discussions about this subject here:

http://www.andalucia.com/forums/viewtopic-t11208.htm

http://www.andalucia.com/forums/viewtopic-t11022.htm

Someone may well have updated information.

jases1000

Thanks

lcortez

No,its absoloute nonsense,you are quite free to rent your own property
All you need be aware of is that all rentals in Spain are covered by the Urban Leases Act 1994,wether long or short term,residential or commercial.
Tax on rental income is 25% or 35%,dependent on wether youare reaident or none resident,however this tax is paid by the tenant

Fred James

A non resident pays tax at 25% but a resident pays tax on the income as part of his income and the tax could be anything from zero to 43%. A resident only pays tax on half the net income and also gets allowances that the non resident does not get

Since when did the tenant pay the tax and how does he pay it?

Beachcomber

Fred, isn't the tax now 24%?

lcortez

The tax has been paid by the tenants since the inception of the above mentioned act
It is deducted rom the gross rental amount,and the net amount is passed on to the landlord
IMPORTANT CORRECTION TO MY ORIGANOL POST:A license IS required if the property is a holiday let,but NOT required if the proerty is a long term let
Apologies for the incorrect info

Fred James

Yes, Beachcomber you are quite right - I requoted Icortez's figure of 25% which is incorrect.

Fred James

Does the letting agent deal with this - when we rented for 3 years we just paid the rent to the agent.

If it is a private let then presumably this is open to tax evasion.

Hillybilly

Sound similar to renting out a UK property in the UK if you don't live there. Unless you are accepted under the Non Resident Landlord Scheme your tenant (or letting agent) has to withold tax, pay the landlord net, and pay the IR the tax on the landlord's behalf.