The Spanish Tax Office is Penalising Undeclared Holiday Rental Property Owners with fines of up to 150% AND Non-Resident owners who fail to do a Tax Return in Spain.
Spanish Hacienda ( The Spanish Tax Office) has issued 0ver 700,000 letters this year to Non-Resident owners of Spanish properties reminding them of the owners responsibility to pay Non-Resident owners tax, and also a tax on any income derived from rental properties.
Non-resident does not just cover owners living outside of Spain. It covers all owners who are not residing in the rental property. You should know Catastral System is a part of the Spanish Tax office, what does mean?… every property with Catastral number has all owner data, and it is so easy for the Tax Office to search if you are doing or not your annual/quarterly Tax-Return declaration.
As rental sites such as HomeAway, Airbnb, Booking.com and Tripadvisor are now obliged to send a copy of all client payments to the tax office, Hacienda is now aware of all payments made to Holiday Rental Owners since January 1st 2019.
Owners who do not declare this income on their tax returns are liable for fines of between 50% and 150% of the total, as calculated by Hacienda.
In addition, owners must declare all income from extra earnings such as charges for cleaning, grocery packs or charges for WIFI. Here you can check the expenses you can deduct from the incomes on Holiday Rental Properties.
Owners with a VFT or CTC registered number has been registered with Hacienda and when the Tax return is not presented, the system will activate an enquiry as to why not.
In this event, owners must prove the payments over the last 4 years and have 10 days to do so. Failure to do so produces fines ranging from €3,000 upwards depending on the seriousness of the case.
Here at AVANT CONSULTORES we have had a major increase in owners contacting us with copies of their letters, trying to find a solution and present within the 10-day timeframe.
Last week alone, over 30 owners contacted us having received notifications.
If you own an unregistered Holiday Rental Property or have not presented your tax return, which is required quarterly on rental properties, contact us without delay through email@example.com.
All properties that are rented for a period of less than 63 days at a time are required to have a VFT or CTC registration number.
Holiday rental properties must file a return every quarter. Quarters without a rental are covered in the owners annual return.
Annual returns for non-renting owners must be filed within the following 12 months, year ending December 31st.
Taxes must be paid in Spain, not the owners home country.
Properties with outstanding taxes may be embargoed.
Owners with outstanding taxes may have their bank accounts embargoed.
Fines are cumulative.
Owners can claim expenses accrued by running their property as a Rental property.
All associated bills ( Facturas) must show the owners name, address and NIE number and also show the tax paid.
Save all your proof of expenses such as Electricity bills, cleaning costs, purchases of linen, towels etc and make sure you pass them to the professional processing your tax return.
All the information from the Spanish Tax office in English is here.
For more information on Rental Tax Returns and also Non-Resident Owners annual tax returns Email firstname.lastname@example.org
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