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Hi, I have been looking on here for the post relating to the new tax law in 2010 for holiday rentals for non residents, as someone said it has been covered on here, but I can’t find it. Does anyone know where it is? I mainly wanted to know if I can deduct my morgatge interest repayments for the whole year as someone mentioned that they will only take into consideration the months you have rented the property out for and not the rest. Thankyou Natalia
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I could be wrong, but last time I checked non-residents get no deductions at all. You pay tax on gross rent, full stop. Hasn’t changed as far as I know.
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Oh, it’s just someone said on another post that it changed beginning of this year for non residents. Maybe they got it wrong. Will check on google see if I can find out some more information, Thanks for the reply.
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Mark, if my memory serves me right it was ” Arthur” who posted it. Perhaps he can confirm either way.
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Ley 2/2010 Articulo 4. (Google it to see it.) In force from early this year. You can now deduct legitimate expenses from income, but it’s quite complicated.
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Thanks, Arthur. I was sure that you had posted the relevent “ley” Its good to know that the memory box is not failing yet.
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Hi, just received an email from my gestor, and you are right, he has confirmed that you can deduct expenses, but only for the months the property is being rented. So for the bank interest repayments they will deduct these, but only the month in which the property is being rented out. I suppose it is better than no deductions at all.
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You sure we are talking about non-residents? If so, I stand corrected.
Mark
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Yeah, definetely for non residents as he knows I am a non resident, this is what he wrote, (hope you can read spanish, if not I will translate as best as I can)
Casa arrendada para no residentes:
Las declaraciones hay que presentarlas cada vez que se cobra una renta (la presentación se puede realizar hasta un mes después del cobro). La base sobre la que hay que pagar impuestos es efectivamente ingresos menos los gastos NECESARIOS para el arrendamiento . El tipo a pagar es del 24%.
Para poder realizar estas declaraciones necesito que cada vez que se cobre algún importe me mandes los importes cobrados y los gastos que hayan sido necesarios para el alquiler (por ejemplo gastos de la agencia que te lo alquile, etc). En cuanto a los intereses de la hipoteca y otros gastos que se paguen de la casa (IBI, agua, luz, etc) podrían ser deducibles siempre y cuando se puedan demostrar que corresponden al período en que la casa ha estado alquilada. Si por ejemplo se alquila únicamente un mes durante el año, solo sería deducible 1/12 de los gastos que se consideraran anuales.
Hope this helps others who are also renting their properties. Thanks for your help anyway.
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“but only the month in which the property is being rented out “
I think we need clarification on this for reasons how would the taxman know when the property was rented out & when not ? Please find out from your Gestor if in practise it ns that the property is availible to rent as by nature being a non resident means that the owner is not living there. Hence it availible .
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Well I spoke with him today and he explained that I have to give him the booking contracts with rental dates on so it shows when the property has been rented out. This way they know for which months the expenses are deductible. Personally I think it could get a bit confusing as things like water bills, electric bills etc are every two to three months, so how do you work out the exact amount that can be deducted? I am sure they will work it out in their favour, as I am sure they are probably reluctant to do this anyway. Plus if for example in one month you only rent the property out for 1 week, do they deduct the whole months mortgage interest? I think I will have to get back to my gestor to explain, but I think he is probably just as confused as me!
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They thrive on this confusion to their benefit. This is why to do things properly, legally it not a course to be taken in Spain. This why the reasons Spaniards act the way they do to any law etc..
If taxation or other laws are not put into statutory books and reflects fairness, equaitablity & equality we end up in this situation of the wild West.
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A better or fairer way to look at this would have been allowing nine months expenses & three months as owner occupation. This way property owners would be more in a position to declare the rent & reflect the financial facts for tax purposes.
In so far as the bills etc they can be apportioned so eg two months gas bill 60 days occupation during that period 14 days it could 14/60 x €xxxx
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