Often, clients rent out a holiday home in Spain through online rental platforms. As savings are no longer yielding returns, several families are also choosing to invest in a second residence.
People often forget that there are rules to renting out in Spain. For example, you owe Spanish taxes on your rental income.
Online rental platforms provide your data
Under a decision by the Spanish Council of Ministers, online rental platforms such as Airbnb and HomeAway will, from July 2018 Be required to periodically exchange data with the Spanish tax authorities.
The aim is to combat tax evasion. Foreign landlords sometimes 'forget' to declare their actual rental income, causing the Spanish treasury to miss out on revenue. So, in the near future, the Spanish tax authorities will monitor property owners more closely.
What information is exchanged by online rental platforms?
The online rental platforms will have to disclose the identity of the landlord, the identity of the tenants, the number of days stayed and the rental amount. If you rent through Airbnb, HomeAway or any other online rental platform in Spain, you can assume that the Spanish tax authorities will know your income. It is then advisable to keep good records.
Registration requirement when letting in Spain
If you have several holiday homes in the Comunidad Valenciana rent to tourists through online rental platforms, you are required to register these properties. This on pain of heavy fines. In addition, you must meet minimum quality standards. Other Spanish regions also have strict rules for renting via online rental platforms.
Impact of information exchange in Belgium
The European Assistance Directive stipulates that national tax administrations should automatically share data with each other. In principle, if the Spanish tax authorities are aware of your rental activities in Spain, your property income will automatically be shared with the Belgian administration.
Obligations in Belgium when letting in Spain
Indeed, as a Belgian resident, you are also required to declare your foreign rental income in Belgium. In principle, this income will be exempt from Belgian taxes, but will count towards the applicable rate. In other words, you may end up in a higher taxable bracket.
You should also register your Spanish bank accounts with the National Bank. Finally, you should indicate in your tax return that you have second residence.
Would you like more information about renting out in Spain? Then seek legal or tax advice.