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New Holiday Property Rental Law

New Holiday Property Rental Law

Old Dec 6th 2016, 2:50 pm
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Default New Holiday Property Rental Law

We have a property in Spain which we frequent as often as we can but also let it out a couple of months a year to Spanish and Portuguese families during peak season.

Now that the New Holiday Property Rental Law is around the corner, early 2017, I guess we need to get a licence to avoid any unwanted fines.

This web site here explains a lot about the rules and regs, plus the fines, but it doesn't mention if you have to pay a percentage of each rental to the authorities.

Does anyone know if you have to pay anything or just comply with the rules of the property rental and get a licence?
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Old Dec 6th 2016, 5:29 pm
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Default Re: New Holiday Property Rental Law

Hola

I'm not an expert but what getting a licence does do is "to raise your head above the parapet" in that you will be expected to submit a tax return with all that that entails.

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Old Dec 6th 2016, 8:53 pm
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Default Re: New Holiday Property Rental Law

Hi, I used to let my property on the costa blanca years ago, but choose not to in Costa Esuri. I find it bad enough when our children use it and nothing is where we last left it !! I'm assuming that to get the Spanish & Portuguese punters you use an agent who also contracts cleaners etc to change linen/ service the property between lets etc. Surely, they will know the ins and outs of what tax might be due. If its prohibitive, perhaps you need to reconsider your strategy and just let a few peak season weeks privately to (UK) punters by word of mouth. No advertising. I would seriously think twice before sticking your head above the paraphet !! Remember also you will probably have to pay your fiscal representative to do all the paperwork as well. Could be a minefield for perhaps 6 to 8 weeks of letting income.
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Old Dec 6th 2016, 9:21 pm
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Default Re: New Holiday Property Rental Law

Originally Posted by Dxf View Post
Hola

I'm not an expert but what getting a licence does do is "to raise your head above the parapet" in that you will be expected to submit a tax return with all that that entails.

Davexf
Originally Posted by keithBT View Post
Hi, I used to let my property on the costa blanca years ago, but choose not to in Costa Esuri. I find it bad enough when our children use it and nothing is where we last left it !! I'm assuming that to get the Spanish & Portuguese punters you use an agent who also contracts cleaners etc to change linen/ service the property between lets etc. Surely, they will know the ins and outs of what tax might be due. If its prohibitive, perhaps you need to reconsider your strategy and just let a few peak season weeks privately to (UK) punters by word of mouth. No advertising. I would seriously think twice before sticking your head above the paraphet !! Remember also you will probably have to pay your fiscal representative to do all the paperwork as well. Could be a minefield for perhaps 6 to 8 weeks of letting income.
Taxes will have to be paid. Please do not encourage someone to be illegal in their dealings.

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Old Dec 7th 2016, 8:29 am
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Default Re: New Holiday Property Rental Law

Hi, as a non-resident you should be paying a non-residents tax at the end of every year regardless of whether you let your property or not. If you do let it then, I think, it's a similar form but you have to declare the income & pay the tax on that as well. Regards Bryony.

P.S any solicitor will sort this out for you.
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Old Dec 7th 2016, 11:07 am
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Default Re: New Holiday Property Rental Law

Originally Posted by MikeCol View Post
Hi, as a non-resident you should be paying a non-residents tax at the end of every year regardless of whether you let your property or not. If you do let it then, I think, it's a similar form but you have to declare the income & pay the tax on that as well. Regards Bryony.

P.S any solicitor will sort this out for you.
Hola,

As the regulations only came into force this year, the truth is no-one knows what information you will have to provide. However, as you can claim a tax reduction for everything you pay out, you may need to supply names and fiscal identification for everything / everyone you (or your representative) have paid out for potential cross referencing by the tax office.

My local "scare merchant" who rents out such properties, thinks that 75% of people work cash-in-hand for the summer season. Whilst I do not condone, I do recognise that they are probably correct.

To my mind it is totally correct for a seaside town with a considerable summer trade, to be concerned about the standard of accommodation and therefore I think this is just the start of increasing bureaucracy but it will take time.

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Old Dec 7th 2016, 12:24 pm
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Default Re: New Holiday Property Rental Law

Originally Posted by Rosemary View Post
Taxes will have to be paid. Please do not encourage someone to be illegal in their dealings.

Rosemary
Dear Rosemary, No offence was intended. In no way was I condoning or suggesting that one should flout Spanish Law, particularly given the heavy penalties. It was more a case of having reconsider ones options in letting. Unless you really need the income I was suggesting that it is more trouble / hassle than it is worth and hence he should think twice and consider removing his property from his letting agent and keep it purely for family & friends. Speaking from experience (albeit 15 years ago) no amount of income could make up for the hassle of having to lock away personal possessions and the additional wear/tear & damage on quality furnishings. Its personal choice but; in the event that I needed to let in order to cover the costs I think I would prefer to sell up.
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Old Dec 7th 2016, 2:37 pm
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Default Re: New Holiday Property Rental Law

Originally Posted by keithBT View Post
Dear Rosemary, No offence was intended. In no way was I condoning or suggesting that one should flout Spanish Law, particularly given the heavy penalties. It was more a case of having reconsider ones options in letting. Unless you really need the income I was suggesting that it is more trouble / hassle than it is worth and hence he should think twice and consider removing his property from his letting agent and keep it purely for family & friends. Speaking from experience (albeit 15 years ago) no amount of income could make up for the hassle of having to lock away personal possessions and the additional wear/tear & damage on quality furnishings. Its personal choice but; in the event that I needed to let in order to cover the costs I think I would prefer to sell up.
Thank you for explaining. Unfortunately there are far too many people living in Spain who do not believe in paying their dues, especially taxes.

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Old Dec 7th 2016, 3:03 pm
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Default Re: New Holiday Property Rental Law

Thanks for your feedback. We advertise our property on a well known website to get the enquiries and we have good friends in Spain who do the meet, greet and cleaning etc. We don't need to rent it out to survive but its does cover a lot of the bills whilst we slave away in the UK. I guess we just need to work out what the rental tax is going to be to see if it is worth us keep renting. Does anyone know the formula i.e. if we did 4 rentals @ say 500 euros each what would the percentage of tax be on the 2000 euros? We already pay our non-residence levy, EUC etc. etc. so we are all above board with that good stuff.
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Old Dec 14th 2016, 5:54 pm
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Default Re: New Holiday Property Rental Law

Regardless of the new law,
Any citizen, depending on the time in which he has his fiscal residence, must pay his taxes annually.

In Spain, that is so, if a person resides more than 180 days in the year (in Spain, from January 1 of the year to December 31 of the same year.

You have to make the declaration of any income per rent, so it must be declared, depending where you reside fiscally, in Spain to the Tax Agency and in UK to the Inland Revenue.

There is an exchange of information between the two nations, to this end, to avoid tax evasion.
If the rents are declared in one of them, it serves as justification before the inspection in the other, in the existence of double taxation agreement.

Avoid possible non-compliance, as in Spain, can make anyone denounce anonymously before the Tax Agency, via the Internet.

See

https://www2.agenciatributaria.gob.e...fTramite=ZZ065
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Old Dec 15th 2016, 9:35 am
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Default Re: New Holiday Property Rental Law

Originally Posted by ALVALVA View Post
Regardless of the new law,
Any citizen, depending on the time in which he has his fiscal residence, must pay his taxes annually.

In Spain, that is so, if a person resides more than 180 days in the year (in Spain, from January 1 of the year to December 31 of the same year.

You have to make the declaration of any income per rent, so it must be declared, depending where you reside fiscally, in Spain to the Tax Agency and in UK to the Inland Revenue.

There is an exchange of information between the two nations, to this end, to avoid tax evasion.
If the rents are declared in one of them, it serves as justification before the inspection in the other, in the existence of double taxation agreement.

Avoid possible non-compliance, as in Spain, can make anyone denounce anonymously before the Tax Agency, via the Internet.

See

https://www2.agenciatributaria.gob.e...fTramite=ZZ065
Hi ALVALVA

Interesting, just to be clear to me, may I ask you to comment on this case, please.

I am a UK resident and spend only 2 months a year in Spain (so <180 days).
I rent my home for the remaining 10 months of the year and get an income.

I am fiscally resident in the UK. Not in Spain.

1. Do I have to make 1 declaration to the UK... AND another to Spain (but explain that I have been taxed in the UK).

2. Or is the one tax return to the UK enough?

I think you need to do both as there may be different tax liabilities in each country and say you pay less in the UK - you still have to pay the difference in Spain (due to the tax treaty). So I think its case 1 above.

There is also a problem of timing as the UK tax year is different to the Spanish one.

Thanks in advance

Jon
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Old Dec 15th 2016, 10:47 am
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Default Re: New Holiday Property Rental Law

Originally Posted by Jon-Bxl View Post
Hi ALVALVA

Interesting, just to be clear to me, may I ask you to comment on this case, please.

I am a UK resident and spend only 2 months a year in Spain (so <180 days).
I rent my home for the remaining 10 months of the year and get an income.

I am fiscally resident in the UK. Not in Spain.

1. Do I have to make 1 declaration to the UK... AND another to Spain (but explain that I have been taxed in the UK).

2. Or is the one tax return to the UK enough?

I think you need to do both as there may be different tax liabilities in each country and say you pay less in the UK - you still have to pay the difference in Spain (due to the tax treaty). So I think its case 1 above.

There is also a problem of timing as the UK tax year is different to the Spanish one.

Thanks in advance

Jon
Hola

Since you are tax resident in the UK you wouldn't normally need to make a tax return in Spain but would be liable for non-residents tax. However since you let your property in Spain you should make a tax return I believe

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Old Dec 16th 2016, 8:43 am
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Default Re: New Holiday Property Rental Law

Originally Posted by Dxf View Post
Hola

Since you are tax resident in the UK you wouldn't normally need to make a tax return in Spain but would be liable for non-residents tax. However since you let your property in Spain you should make a tax return I believe

Davexf
Thanks Dave so its the first case I mentioned i.e 2 tax returns for someone (non Spanish tax resident) with a property that is rented for an income.

What I don't understand is non-residents tax, as it appears this is liable (even if the property isnt rented = no rental income) and even though one is a UK tax resident (in my example above).... spending less than 180 days a year in Spain.

Apart from home rental income, what things, generally would make one liable, for this non-residents tax, and does that involve a Spanish tax return, please? I'm guessing its for people with some kind of business activity there - or other revenue earning activity.

Thanks in advance
Jon
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Old Dec 16th 2016, 11:15 am
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Default Re: New Holiday Property Rental Law

Originally Posted by Jon-Bxl View Post
Thanks Dave so its the first case I mentioned i.e 2 tax returns for someone (non Spanish tax resident) with a property that is rented for an income.

What I don't understand is non-residents tax, as it appears this is liable (even if the property isnt rented = no rental income) and even though one is a UK tax resident (in my example above).... spending less than 180 days a year in Spain.

Apart from home rental income, what things, generally would make one liable, for this non-residents tax, and does that involve a Spanish tax return, please? I'm guessing its for people with some kind of business activity there - or other revenue earning activity.

Thanks in advance
Jon
If you are non resident (less than 180 days a year) with no income in Spain from any source then you must complete a non resident. Tax return each year after you have purchased your property. This charge is based on the catastral value of the property regardless of whether you rent out or not.
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Old Dec 16th 2016, 11:19 am
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Default Re: New Holiday Property Rental Law

Originally Posted by Jon-Bxl View Post
Thanks Dave so its the first case I mentioned i.e 2 tax returns for someone (non Spanish tax resident) with a property that is rented for an income.

Thanks in advance
Jon
Hola

NO - the tax is for owning a property - it doesn't matter whether you rent it out or not; the tax is purely on owning a property by anyone who doesn't live in Spain for 183 or more days a year.

If you rent the property then there is an extra tax !!!

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