According to the Double Taxation Agreement between the UK and Spain, income that comes from a rental must be taxed in the country where the property is located.
Shall I submit the Tourist Rental Incomes in Spain?
This means that if you own a property in Spain, and you rent it out as Tourist Rental Incomes, you should submit a Tax Return quarterly informing about your incomes.
Are there any deductible expenses to reduce my Net Income?
For EU residents, there are deductible expenses included in the IRPF Law. I will explain one by one:
- Conservation & Repair:
All these things you do to keep the property in a good condition. As replacement of things, paint work, widows, doors etc.
Taxes related with the property (IBI, Garbage, Lighting…)
- Insurance & Other Expenses:
All the expenses by professionals related with the property (Legal advice or accountancy) and the insurances (liability, fire, etc).
- Amortization of the Real State or Furniture:
The amortization of the property is 3% of the greater of the following values: Acquisition cost (construction, investments, etc) if it was through inheritance or donation or the catastral value (excluding the value of the land).
Goods transferred with the property will be used for a year period. In general, 10% is the percentage for furniture and equipment.
Which is the Tax Rate applied?
The Tax Rate is 19% applied for the amount once deductible expenses have been applied.
When should I submit the Tax Returns?
The 210 must be submitted during the first 15 days of April, July, October and January.
What about the days where the property hasn’t been rented?
For the days not rented, an Urban Income Tax (Non Resident Tax) is generated and these days must be submitted to the Tax Office during the next year.
To all these people who owns a property in Spain and rent it out in short periods, I suggest to contact an accountant to avoid future fines and do all the accountancy work in your behalf.