If you own a (second) home in Spain and rent it out, you are obliged to declare it to the taxes. Here you have to take into account a number of rules. A brief overview!

Obligation to bring tax money

In Spain there is a “duty to bring” tax money. This means that the Spanish tax authorities assume that you know what your taxes are for. Thus, the tax authorities do not ask you to pay taxes. You have to think about this yourself and put it in order. This regulation applies to non-resident private individuals who own one or more properties in Spain intended for rental.

Quarterly rental income declaration

The following rules apply to the declaration of rental income from your (second) home in Spain:

• The declaration is done quarterly on your own initiative to the taxes according to model 210 (income tax for non-residents in Spain).
• The declaration is done per owner and per property, and is also mandatory for garages and storages if they are named separately on the property tax (IBI).
• The declaration is done in April, July, October and January, each time for the previous quarter, if you have rented out the property during that quarter. The filing deadline is always the 15th of the month.
• You can deduct certain deductions from your tax return, except if you are a resident of a country outside the European Union.
• Net rental income is taxed at the rate of 19% for non-residents (24% for residents of a country outside the European Union).

Annual declaration of lump-sum income.

There is a taxed flat-rate income for the periods when you did not rent out your property in Spain. You must also declare this to the taxes according to model 210:

• The value of the lump-sum income is the proportional part (i.e. the non-rented months) of 1.1% per year of the cadastral value of the property (2% if this value has not been adjusted in the last 10 years).
• The flat-rate income declaration must be made no later than December 31 of the year following the year in which you owned the property.
• Lump-sum income, like rental income, is taxed at the rate of 19% for non-residents (24% for residents of a country outside the European Union).

Declaration of wealth tax

You are required to file a wealth tax return if the purchase value after deducting mortgage loans exceeds the exemption:

• The general exemption is 700,000 euros per taxpayer. If the regional exemption is higher, you may apply it.
• The declaration must be made annually on your own initiative using the 714 form.
• The declaration must be made before June 30 of the year following the year in which you owned the property.
• The purchase value of the home is progressively taxed (after deducting any mortgage loans and the applicable exemption).

Other taxes on your property in Spain

As a non-resident owner of a Spanish property, you may have to deal with:

• Property tax (IBI)
• Garbage tax (Basura)
• Road tax (IVTM) if you own a car with a Spanish license plate

These assessments are normally sent to the address of the property. Make sure you pay these taxes correctly.

VAT liability when renting out

The rental of a Spanish property is not subject to VAT unless you have the rental done by an office. In that case, the tax authorities consider you to be an entrepreneur. You are then required to file a quarterly VAT return and income tax return (if rentals have taken place). You have to calculate VAT on the rents received and deduct IRPF (income tax).

For more detailed info on the possible taxes on your second home in Spain, is