Tax authorities to reintroduce holiday rental income controls with a new declaration in force next year

holiday rentals spain
Holiday rentals are big business in Spain

The Spanish Treasury has a sneaky plan to reintroduce tourist rental income controls that were struck down by the courts.

The new regulation, which will come into force once published in the official gazette sometime early next year, will require all people and companies in the holiday-rental business to declare the rentals they are involved in on a regular basis.

The regulation is aimed at intermediaries in the business, especially platforms like Airbnb, not holiday-home owners themselves. However, home owners and tourists are affected, as declarations by intermediaries will include the identity of both owners and clients, plus all the financial details of rentals carried out.

This declaration is not exactly new. The previous fiscal declaration form, known as Modelo 179 (quarterly informative declaration of the ceding of homes for touristic ends) was ruled unlawful by the Spanish high court, following the lead of the ECJ, on somewhat technical grounds.

The Spanish tax authorities have now informed Brussels of this new return they plan to introduce to do the same thing, namely force all intermediaries to inform the tax authority of any holiday rental activity they are involved in, with the identity of the property owners and tourists, and the rent paid.

The measure will be tagged onto a new decree taxing financial transactions in Spain, informally known as the Tobin Tax, which will, of course, simply reduce financial transactions in Spain.

The ‘Tobin Tax’ decree will also introduce a new rule requiring banks to identify the fiscal residency of clients with bank accounts in other EU countries. We will have to keep an eye on this, as it sounds like the kind of innocuous measure that ends up being a real pain for foreigners with bank accounts in Spain.

Thoughts on “Tax authorities to reintroduce holiday rental income controls with a new declaration in force next year

  • Christopher C. says:

    The main problem here is not the owners having their rental reported, since most owners are used to having to report their taxes and are for the most part, after several years now, tax compliant. The problem here is once again the intermediaries have to be the police for the government, with one more time-consuming form to fill out for the tax office with harsh penalties for not complying.
    On the other comment about fiscal residency, one cannot open a bank account anywhere in Europe today without declaring one’s country of fiscal residency amd completing AML forms. Nowhere. Those days are long gone.
    Despite all this red tape we consider ourselves highly privileged and fortunate to live and work in such a beautiful country with such incredible people and and such an amazing city (Marbella!)

  • Far fewer people are going to see all this new and additional red tape as being something that will make them feel highly privileged and fortunate to live and work in Spain, or Marbella, which I would venture is perhaps now not so ‘amazing’ to the prospective buyer, as it apparently is for you.

    This is a problem that can’t be glossed over or wished away by saying people are already reporting their income and won’t be bothered by one or two more forms. They will be, they are bothered, and the more they hear from Mark and others – quite rightly – of this ‘stuff’ then the more they will be far less inclined to buy.

    Spain has always known how to shoot itself in the foot, but Podemos seem to know how to do it with both barrels, to both feet, I think that is the point here.

  • Mark, are you trying to put people off coming to Spain? It seems all your posts are so negative about Spain in every regard!

    Countries around the world are getting tighter about taxes (and everything else!). There is no where to run and hide anymore. In Spain people have been able to live under the radar for a long time. This hasn’t been true in other Western countries. So now, the rooster has come home to roost and people don’t like it. Who does?

    But seriously, if people buy an apartment to rent out they are in business. When in business then you deal with the ramifications (taxes and rules and regulations!). Governments are wielding a heavy hand all over the world – definitely not just Spain. Although your focus is always on slamming the left leaning Government. Ok fine. We, who read your posts, have to deal with the political lens you write your posts through or stop reading. Yes a choice.

    As Christopher above said, there are alot of benefits to living in Spain that go beyond having to foot the bill for being in business (ie. owning and making money from a property). If one doesn’t care for the rules of business they should not have entered into in the first place. Life is tough for everyone, everywhere.

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