1. How much are your fees for the quarterly and annual declarations? We charge 135,00 Euros + IVA (163,35 Euros) for each quarterly declaration if the property has two owners (two tax submissions) and 110,00 Euros + IVA (133,10) if there is just one property owner (one tax submission). We charge the same for quarterly declarations on rental incomes than for the annual declaration. For quarterly declarations with negative result (no need to submit tax declaration) we charge 80,00 Euros + IVA (96,80).
2. How are the rental incomes rated? For Non Residents in Spain that reside in other EU countries (plus Norway and Iceland, and for the time being the UK) this type of income is rated at 19%. Residents in Non EU countries pay 24%
3. What expenses can be deducted? Citizens of EU members, plus Norway and Iceand, can deduct the following expenses: Community Fees, Council Taxes, Insurance, water, electricity, mortgage interests, real estate agent fee, cleaning & laundry, maintenance and reparation costs. Please note that this is not a closed list, but these are the expenses that shouldn’t be questioned by the tax Office. You can only deduct the proportional part of the expenses corresponding to the number of days the apartment is rented.
The purchase of furniture and appliances can be deducted as well, but is not dealt with in the same way as the maintenance expenses, it is considered as a fixed asset (“inmovilizado”). This means that the full amount paid for the item cannot be deducted immediately, but only a portion is deductible per year (for a period of several years depending on the item purchased). Therefore, if you have paid for a new Television, sofa or fridge freezer, etc. you will need to provide us with these details and we will apply the correct amounts in accordance with the requirements of the local Tax Authority.
Please note that you can’t deduct expenses if you are not in possession of a proper INVOICE (quotations or “albaran” are not valid”)
Residents in Non EU countries (except Norway and Iceland) can NOT deduct any expense.
4. I am resident in another country. Do I still have to pay this tax in Spain? Even if the property in a company’s name? Yes. This is the Income Tax for Non Residents. According to the Spanish law, incomes obtained from the rent of a property situated in Spain, must be taxed in Spain. There are agreements in place to avoid double taxation between Spain and most of the European countries, so you will not have to pay twice (whatever you pay in Spain will be deductible off whatever you have to pay for the same income in your country).
5. How often do I have to declare and pay for these incomes? Unlike residents in Spain, who declare their rental income together with their other income in their annual tax return, Non Residents must submit a declaration every 3 months, according to the following calendar:
- Incomes obtained in January, February and March: declaration by the 20th of April
- Incomes obtained in April, May and June: declaration by the 20th of July
- Incomes obtained in July, August and September: declaration by the 20th of October
- Incomes Obtained in October, November and December: declaring by the 20th of January, and so on. This is also the moment to declare the negative outcome of any quarter corresponding to year 2017 (i.e. a quarter where you have rented our the property, but with a negative outcome)
PLEASE NOTE THAT THE PRESENTATION OF THE DECLARATION INVOLVES THE PAYMENT OF THE TAX AT SAME TIME.
You also have to file an annual tax return by the end of each year, corresponding to the previous year (by the end of 2018 you have to declare for 2017, by the end of 2019 for 2018, etc.), even if you obtain no income at all from the apartment. You can read more about this here
6. What happens if I pay late? The deadlines are very clear in the previous question. If you pay just one day late, the Tax Office will send you a fine for:
5% (if the payment is made within the three months following the deadline),
10% (if more than three months pass, but less than 6)
15% (between 6 and 12 months) and
20% plus interests if you pay more than one year late.
If you want us to pay this fine for you, we will charge 50,00 Euros + VAT. So, as you can see, it is very important that you pay on time.
7. I pay every year Income Tax for Non Residents (form 210). Does this cover the tax due for the rental incomes? No. If you have been filing an annual declaration with the form 210, always paying a similar amount, you have NOT been declaring the rental incomes, but paying a fixed amount on a “deemed” income, just for the fact of being Non Resident and owning a property in Spain. The rental incomes must be declared quarterly (if there have been incomes in that specific quarter) and obviously the amount will always be a percentage on the profit (19%).
8. I have not received the electricity and water bills yet. Can I deduct an approximate amount? No. According to the Tax authority you can only deduct the electricity and water bills once you have received them.
9. I have not received the Council Tax bills (Rates and Rubbish Collection fee) yet. Can I deduct them? Yes, you can deduct the proportional part, considering the same amount as last year if you don’t know the amount of the present one yet.
10. From when do I have to declare the Rental Incomes? The obligation to declare the rental incomes has always existed. It Is not a new thing that came with the new holiday rental regulation.
11. If I start declaring my rentals now, does the Tax Office assume that I have been renting out my property in the past? Can they ask me to pay taxes for the last years? Well, honestly we can’t foresee what the assumptions of the Tax Office will be, but in any case, they would have to prove that you have been renting out your property in the past. Based on the various messages sent out by the fiscal authorities, the idea is that people start paying and there’s no reason to believe that investigations will be carried out on every new rental tax payer. It wouldn’t make sense for them to investigate every new case, as the Tax Office doesn’t want to make people afraid of paying taxes.
12. I have not rented out my property in the last quarter. Do I have to file any declaration now? Not for rental incomes, but remember that you have to file, and pay, every year the Income Tax for Non Residents (yearly, not quarterly). If you rent out the property but you have a negative outcome, i.e. you have more expenses than incomes, you don’t have to submit a quarterly declaration, but you will have to present a annual declaration declaring that loss. (between the 1st and the 20th of each year)
13. What figure should I consider as the income: the amount paid by the tenant/guest or what I actually receive after the commission of the estate agent? You have to declare the amount paid for the rent by the tenant/guest, and you can deduct the commission or fees charges by the rental state agent. But the income is the total amount paid by the tenant.