Renting out property in Spain – What you must do to stay legal

Buying Spanish property for investment purposes is a popular option. But if you do plan to rent out your purchase, what must you do to stay legal? In this article we outline the requirements. 

You’ve made the decision that you’d like to rent out your property in Spain. Perhaps you’ve bought it specifically as an investment or you just want to use the time when you’re not there to help fund its keep. Whatever your motivation, renting can be a good decision to bring in some extra income.

However, you need to make sure that the opportunity to rent doesn’t turn into a disaster. There are obligations to renting out your property and it is important to take the proper advice and ensure you keep on the right side of the taxman.

Tax obligations

If you are renting out your Spanish property then you must declare your rental income and be taxed accordingly. You must declare the income quarterly in Spain when you are a non-resident. The declaration is made on form 210 and tax is paid according to the schedule:

  • 1st quarter – payable before 20th April
  • 2nd quarter – payable before 20th July
  • 3rd quarter – payable before 20th October
  • 4th quarter – payable before 20th January

The declaration must be made before 15th of the month and the tax is deducted from your bank account on 20th. Most people choose to use a fiscal advisor to help with the process and make sure that they don’t pay more than they should.

The good news is that expenses can be deducted if you are a resident within the EU, Norway or Iceland. These include:

  • council tax and community charges
  • cost of utilities such as electricity and water
  • any house insurance you pay
  • interest on your mortgage
  • cleaning and laundry costs
  • legal and accounting costs

It is worth establishing a system for keeping track of your expenses so that you can easily produce an accurate account sheet to be presented along with your income details.

Each quarter your income details must include:

  • the names of tenants
  • dates of occupancy
  • how much you’ve been paid

If you are a resident in Spain and are renting out a second property, then this should be declared as part of your annual income tax declaration. This is made before the end of June each year.

Registering your tenants

If you rent out your property either for short term or long term lets, then you must keep the Guardia Civil or Policia Nacional informed. If you have entrusted an agency to take care of your lettings for you, then they should do this automatically. If you manage your own then you will be responsible for providing the information.

The police need to know the identity of every occupant of your property under the age of 16. You need to let them know:

  • First names and surnames
  • Identity document reference e.g. passport number
  • Date of birth
  • Sex and nationality
  • The dates of occupation

You will also need to let them have your own details including ID, name, surname and the form with the information must be signed.

Renting out property is a good way of making your investment pay. The requirements are not too onerous and meeting them ensures that you can benefit from your property worry-free.

Contact Ábaco Advisors

If you would like more information about rental taxes or any other type of tax services in Spain please contact our specialized tax department. Send us an email to info@abacoadvisers.com, or use the form below. We will be happy to help you.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
SPI disclaims any responsibility or liability related to your access to or use of any third party content.

About Ábaco Advisers

Ábaco Advisers is a well-respected and independent firm of conveyancing, tax and legal advisors based in Torrevieja and Alicante on the Costa Blanca. Since 1999 Ábaco has provided inheritance, tax and conveyancing services to both resident and non-resident owners of property in Spain. Amongst its team of dedicated and professional staff there are native speakers of Spanish, English, Swedish, Norwegian, Finnish, German, Dutch, French and Russian. The customer care department is there to ensure that a personal service is delivered to each client and that communication is maintained throughout.