Property Adviser · RE Asset Management · Luxury Development

Rental Information

Rental Information

Investment properties in Spain are extremely common - buyer's intentions are to rent the properties for extra income. Whether the investor is a Spanish resident or not, certain tax obligations apply to those who wish to rent out their properties.

In Spain, residents and non-residents are treated differently by the authorities in regards to tax liabilities. Non-residents must declare any income from a property rental to the tax man within 30 days of payment being received, although quarterly declarations are allowed should the property be booked for several months.

At Louis Wealth Realty, we have worked with some of the most well-known footballers and celebrities, as well as high-profile and successful entrepreneurs. We offer rental properties in some of the most exclusive neighbourhoods in the Marbella area, including the Golden Mile.

Tax Obligations for Landlords

In the case of non-residents, a 24 per cent tax must be paid on all profits - however, non-residents do not benefit from the 50 per cent reduction tax that is available to resident landlords. This said, there are other deductions that can be made for non-residents, such as community fees and local Impuesto sobre Bienes Inmuebles (I.B.I.). We advise that you consult with your accountant so you are fully aware of what can be claimed.

If you are a joint owner of a property, for example, if you own the property with your spouse, then the other owner should also make a declaration. Persons who are tax residents in other countries will also have to declare this extra income to their tax authorities, however, in this case, due to a double taxation treaty, persons shouldn't be required to pay twice.

As a non-resident of Spain, should you own two or more properties, you should keep in mind that you will need a fiscal representative in this country. Should you fail to appoint a fiscal representative to act on your behalf, you could face fines of up to €5,000. However, if you own just one property in Spain, this is no longer a requirement.

Declaring income from property rentals in Spain

Persons who are tax residents in Spain are required to include any income from rental properties on their Declaración de la Renta de las Personas Físicas (annual income tax declaration). They will then be able to claim relief for expenses such as community fees, I.B.I., utility bills, advertising and interest, as well as amortisation on a mortgage that may have been taken out on the property. Additionally, should the property be rented out as a private holiday home rather than a business, you will be entitled to a 50 per cent tax deduction.

This said, we advise property owners to seek professional advice before renting out any properties they may own - this will ensure that they fully understand the tax obligations they will have should they choose to do so.