In this article, we'll provide you with tips and guidelines to help you navigate the process of renting out your property in Spain. Other costs directly related to the income received, like agent commission and cleaning are 100% deductible. Sign up for the latest Spanish legal news, Eshkeri & Grau Ltd. All Rights Reserved. You will have to register with the local Guardia Civil (civil guard) and inform them of the guests staying in the property; they will need their full names and passport details. If youre renting or selling a home in Spain, itll need to have an Energy Performance Certificate (EPC). Everything must be clearly stated in order to offer the best guarantees. Find out the details about any property The characteristics, history, estimated prices and data of each property in . And when it comes to owning a property in Spain, tax has to be paid on it regardless of whether it's being rented out or not. If you are planning to continue living permanently in your country of origin and only rent out the property in Spain, you will be subject to non-resident property tax. Many of those buying a home in Spain do so with the intention of using the property as a holiday let. Capital gains tax: typically, paid by the seller to the central government. Retain duplicates of all significant rental-related paperwork, such as the rental agreement, deposit receipts, inventory, and any communication with the tenant, as they could come in handy in the event of disagreements or legal problems. For the duration of the rental contract, the landlord cannot have any keys to the property. Spain is known for its diverse tax landscape, with variations in tax burdens across different municipalities and autonomous communities. Buy to let Spain: the Pros and Cons :: Advocate Abroad Non-resident individuals or companies that are owners of a property in Spain that is not offered for rent to third parties (e.g. It is vital that you are certain before committing to purchase the property that you will be able to use the property as you intend. It took me seven years with my old Andalucian townhouse. Apart from the legal and financial aspects of buying to let a property in Spain, there are also a number of personal considerations: will you manage the letting of the property yourself, or let an agency manage it? It is all well and good to buy a property in an area that regularly receives a tourist influx, but if you don't have a tourist license, you could easily be subject to huge fines. Although you may be buying property in Spain without the sole objective of profit, you would no doubt prefer to avoid any financial loss. Requirements to register a holiday rental The minimum requirements to register a short-term holiday rental in Andalusia are as follows: Properties rented out between May and September must be fitted with air-conditioning equipment in the living area and bedrooms. . It may seem counterintuitive to impose strict rules on property owners who very often are only able to cover the expense of running their second homes by renting them out to holidaymakers throughout the year. Guide to Renting a Property in Spain Immigrating to Spain implies completing various steps, among which finding housing once the visa has been obtained, searching for a property to move to should be next. So, while EU residents pay 19% of the net rental income, (after deducting expenses including 3% of the value of the property), non-EU residents must pay 24% of the gross rental income. Tenants have a right to at least 5 years in a property under a long-term leases (at least 1 year, though payment of rent on a monthly basis could give rise to an implied tenancy agreement). click here to rent out your Spanish property, Spanish mortgage rates remain lower than in the UK, The Essential Guide to Renting out your Holiday Home in Spain, Selling your property via an Estate Agent. Perhaps you own a Spanish property or holiday but don't get much of a chance to use it. You have 48 hours to alert the police to remove such squatters before you will have much more problems having them removed. It's your holiday home, first and foremost - not a pure investment property - so naturally, it will need to be a home and location where you will want to spend holidays, or perhaps eventually to live permanently. Do your best to make sure that your home has enough facilities for a number of guests that can stay. The Spanish government, under pressure from those representing hotels throughout Spain, proposed a new law relating only to properties rented as holiday lets. Spanish property owner Zoe Dare Hall provides some useful tips on how to follow best practices andstand out from the crowd. In addition, you should have authorisation from the tourist board; the requirements for this vary depending on the region. Typically, the objectives of investing in a buy to let in Spain are slightly different. In your property listing you should include: You have been lucky and your flat is attracting a lot of interest. According to the rules the regulation of holiday lets is the responsibility of the region in which the property is situated. Embarking on the journey of self-employment in Spain comes with its fair share of challenges. We would recommend looking at other districts close to the centre, such as Example, Poblenou and Diagonal Mar, all of which rent out well throughout the year, comments Rhodes, from Lucas Fox (see our feature on page 44). By taking note of these suggestions and taking into account these factors, you can increase your chances of having a thriving and lucrative rental property in Spain that complies with all applicable laws and regulations. The Spanish government, under pressure from those representing hotels throughout Spain, proposed a new law relating only to properties rented as holiday lets. 2022 Advocate Abroad SL. Under the new law, tenants facing eviction will first have to undergo an assessment by social services to ascertain if they are in a 'vulnerable situation'. Each of the autonomous regions in Spain will have their own rules and regulations regarding renting out property in Spain, either through Airbnb or another source. First, think about the number or potential rental weeks you can squeeze out of a property. Spains regions regulate holiday homes as follows: Some of the most important housing laws refer to the private rental sector in Spain. Once you have all the necessary information and documents, it is time to post your listing online. So: Housing in Spain: Should You Rent or Buy? - Property for Sale Marbella The difference in taxation between EU and non-EU citizens has been argued to be discriminative, lets see if this can be proven in the courts. Single-room occupancy is illegal. You will need to inform the UK that you are leaving to live in Spain, this will mean you have to report global income and wealth to the Spanish tax authorities (not the UK). Tax is paid in Spain, irrespective of where you have received the income. Renting & Housing Law in Spain You can contact us by email at info@solicitorsinspain.com, by telephone on 020 3478 1420 or by completing our contact form. Here the difference between EU residents and non-residents is more pronounced because, apart from the fact that non-EU residents pay a higher rate of tax, they are also unable to deduct expenses in the management of the property. The rent may be increased only by the state-authorised rate of inflation. Meanwhile, Spanish Limited Companies that accrue a property pay corporation tax that varies between 0 and 30% of the profits, depending on how high they are. Do you need to pay tax on the rental income? Owners either pay a percentage of each booking (beneficial if you have a smaller, cheaper property, or get relatively few inquiries) or an annual fee. However, you need to make sure that the opportunity to rent doesnt turn into a disaster. Consideration must also be given to potential variations in how the rental market functions in different areas. Maintain an updated list of occupants to provide the police with as necessary. Last update on 01/03/2023 Written by Megan Janicke Share Thinking about renting in Spain but not sure where to start? Ibizas rental season is becoming longer by the year, but not all holiday coasts are year-round. The tax ranges from 6.5% ITP in the Canary Islands to 13% of the purchase price for properties valued over 2m in the Balearic islands. Proof that the construction has been completed in accordance with what you agreed, Cancel the contract and have your deposit returned (with interest). Until the end of the lease, the terms of the rental contract cannot be changed without mutual agreement. Regardless of whether you actually rent-out the property, in Spain, non-resident property owners must pay the non-resident income tax. . Everyone will suffer. You will be sent an opt-in email with data privacy (GDPR) information to confirm your subscription. The tax rate for EU residents, as well as residents of Norway or Iceland, is 19 percent, while others will pay a tax base rate of 24 percent. In Spain the average is 8 EUR (9USD) per m2 and about 650 EUR for a 45 m2 apartment. Spain: buying and renting property - GOV.UK From navigating rental regulations to finding reliable tenants, there are many factors to consider when renting out your property. Temporary rental agency: This is the perfect agency for those who want to alternate the personal use of the property with renting it, that is, who want to enjoy the property one season and not another. That said, the new rules appear to seek to maintain a relatively high level of accommodation and service in private rental properties rented on a holiday let basis, a service level that Spanish hoteliers are already obliged to comply with. This will give you the assurance you need and prevent you from encountering legal problems in the future. C0320 - 22395 / Legal / The declaration is made on form 210 and tax is paid according to the schedule: The declaration must be made before 15th of the month and the tax is deducted from your bank account on 20th. Decide whether you want to rent your property out yourself or use a property management company . Of course, these are extremes that are difficult to achieve, and it is normal that the yield (rental income divided by property value) is between 3% and 7%. The effect of Brexit for UK nationals: the transition period and beyond, Resolving Spanish disputes through Mediation, Insolvent estates - Realising assets in Spain, Securing a debt against a Spanish property. Private owners renting out their properties in Spain - Home - De Cotta Law If you are interested in buying Spanish property, most likely you are thinking about having a holiday home in Spain, and even a place you could live if you should decide on retirement in Spain. If we take the example again of renting-out an apartment in Barcelona's Paseo de Gracia, this is likely to attract high value tenants, which means longer rental contracts, more solvency, that is, with fewer probabilities of non-payment. The government hopes to bring in regulations that could potentially result in higher taxes or fines for homeowners who leave their properties empty, as it attempts to free up more properties. If you are receiving the income from a property management agent in Spain who deducts costs related to the management of the property (not just commission) then they should be withholding the tax at source, in which case you do not submit the quarterly return. I would like to receive occasional legal & tax updates relating to Spain. The police need to know the identity of every occupant of your property under the age of 16. It is extremely important that your title is legally registered on the registry: Notary fees: there is some latitude here, but notaries are semi-official, and their fee levels are set largely by the government. Short-term and holiday rentals are for people visiting the area for tourism or work. Recently, the Spanish government has imposed a 2% maximum, and there may be special conditions applied to urban areas where the government considers rental levels to be too high, such the major cities and some popular islands, such as Mallorca. While new laws have been promulgated to speed-up the process, unfortunately the long queue of cases to be heard by the Spanish courts causes long delays. Necessary cookies are absolutely essential for the website to function properly. Renting out property in Spain - What you must do to stay legal You have to pay expenses and taxes, even if you don't use it. How to rent out a property in Spain idealista The new law will not be agreed until June 2022 at the earliest, but it is worth taking note of the proposals if you are considering buying a property and renting it out. When an investor is buying property to let in the UK or Ireland, often their objective is to invest (with the help of rental income) over the long term in a capital asset, which, in the recent past, has risen in value year-on-year, such that it provides a profit and, perhaps, a pension for the investor.

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