Do I have to pay tax from my rental incomes?

For long term rentals or holiday rentals ….

Yes, if you rent out your Spanish Property, for long term rentals or holiday rentals, you are liable to pay tax for your rental income, if you are resident and non resident in Spain.

When do I have to do it?

In the case you’re a tax resident, the full income of the tax period must be declared on your yearly Tax declaration. In the case you’re a non resident you will need to submit trimestral declarations, in the following way:

Incomes for January, February and March: Between the 1st and the 20th of July.

Incomes for April, May and June: Between the 1st and the 20th of July.

Incomes for July, August and September: Between the 1st and the 20th of October.

Incomes for October, November and December: Between the 1st and the 20th of January.

How much Tax do I pay?

Spain applies the same taxes to rental income as the regular income you earn from employment. The rates vary depending on your residence status, as follows:

Residents in Spain: Tax rates range from 19% to 47%.

Non Residents:

EEA non-residents in Spain – The Tax to be paid is 19% on your net rental income, this way the tax is applied after deduct the expenses and not to the gross income.

Non-EEA non-residents in Spain – if you are not an EEA citizen, the tax to be paid would be 24% on the gross income, not being able to deduct any expenses.

What are deductible expenses?

Expenses that you can deduct from your rental income include:

Mortgage interest on loans for the purchase of the property.
Local council rates (IBI).
Community fees.
Insurance policy payments.
Utility fees, i.e. gas, water and electricity costs if you pay them, not the tenant.
Marketing costs if you promote your property on letting platforms.

What is the maximum amount I can claim as expenses?

The maximum deductible can´t be higher to the total income.

However, if your expenses are higher, you may deduct the excess amount over the next four years providing that the amount does not exceed your total income.

What happens if I only let my property for part of the year?

If your property isn’t rented for the whole year, you can only apply the proportional amount to your expenses for the days the Property has been rented out.

How do the Tax office know if the Property is being rented out?

Bear in mind that the supplies companies inform about consumption on the properties and also the rental companies must provide information to the Spanish Tax office, about this kind of transactions.