Winter rentals in Spain: Legal and tax implications

Last updated on March 17th, 2020 at 11:19 am.

If you’ve invested in property, winter rentals in Spain are a lucrative market. 

Therefore, it’s likely that you’re considering renting your home for part of the year. It’s a beneficial arrangement for a number of reasons; not only does it generate income, but it can also ensure your property is secure while you’re away in the winter months. However, you need to make sure you comply with legislation and protect yourself legally. In this article, we explain Spanish rental contracts and the tax implications of renting out your property.

Rental contracts in Spain: The basics

As is the case in any country in Europe, if you intend to rent out your property you should prepare a contract. This document should include information about the landlord and tenants, including the address, registration details and the complete terms of the rental. The terms of the rental will include the cost, duration, and each party’s responsibilities. You should also include information about how frequently the contract needs to be renewed, should the contract be longer than a season. 

It is also advisable to attach a complete inventory of furniture, fixtures and fittings to the contract. Any damage to the property or it’s contents will be covered by a deposit. Usually, this is equivalent to one month’s rent and is returned at the end of the contract, providing the property is returned in its original condition. Many landlords will opt to hire an agency to deal with their winter lets in Spain, including finding tenants, handling contracts, and dealing with maintenance.

Income from renting your property

Income from winter rentals in Spain is taxable, whether or not you’re a resident in the country. For 2019, the rental income tax is 19% for those who are tax resident in a country within the European Union, Norway or Iceland, and 24% for fiscal residents outside these countries. However, on the plus side, several expenses associated with renting are tax deductible if you’re a resident of an EU member state, Norway, or Iceland. These include:

• Council tax (IBI)
• Community fees
• Utility charges (if paid by the owner) 
• House insurance 
• Mortgage interest
• Legal costs
• Cleaning and laundry

You must declare the rental income on form 210 every quarter:

1st quarter: January – March, tax payable before 20th April

2nd quarter: April – June, tax payable before 20th July

3rd quarter: July – September, tax payable before 20th October

4th quarter: October – December, tax payable before 20th January

For each quarter, you must submit the names of the tenants, dates of occupancy, the amount paid and expenses incurred. You will need to keep receipts and forward them to your tax representative to ensure your tax bill is in good order. You have to present your declaration before the 15th of the following month at the tax office. The money will leave your account on the 20th. 

Winter rentals in Spain: An attractive option for property owners

Winter rentals in Spain are a lucrative option for property owners. However, it is essential that you are clear about the rules and regulations in your locality, including your fiscal responsibilities. At Ábaco Advisers, we can help you put together a comprehensive and legally compliant rental agreement. With our guidance, you can make sure that you and your property are protected, so you can start reaping the benefits of renting your property while you are out of the country.