As a non-resident, you may not be aware of all the holiday home tax obligations that come hand-in-hand with owning a property here on the island.
Even if you don’t rent the property, you still have the Spanish property tax, commonly known as the “non-resident tax”. In simple terms, it’s a tax on the benefit of owning a second home.
If you do rent your property out, you’ll need to declare that income every quarter, as well as make the annual Spanish property tax and informative declarations.
The Tax Agency (AEAT) is now catching up with people, largely helped with the introduction of Modelo 179 a few years ago.
This Modelo is submitted to the tax office by intermediaries, such as Airbnb, booking.com, Homeaway and Property Management Companies who take bookings on your behalf. These companies are obligated to inform AEAT of all bookings made through their platform each quarter.
What does this mean for you? If you’re renting your property through any of these channels or companies, the tax office knows exactly how many days the property has been rented for, and how much money you were paid.
This means if you don’t declare your income, or try to under-declare on your tax returns, the AEAT will challenge why the information differs.
For example, if Airbnb state in their modelo that you rented your second home for 1000€ and 10 days in the quarter and on your tax return you state you received 500€ and only had 5 days booked, the tax office will pick up on the difference.
We’ve also seen evidence of the AEAT using Facebook adverts and even using data from the utility companies Unelco and Canal Gestion in a similar way.
How do they do this? If your advert on Facebook reads “grab it quick – the last available dates for 2019…” then in your declarations you state the property has been empty for a large part of the year, it will be down to you to prove why there was a discrepancy.
If you haven’t previously declared your second home or rental income, the tax agency can go back several years to collect payments, late fees and fines, which could be up to 50% of any net income.
How we can help with your Holiday Home Taxes.
The great news is here at Rosenov and Quintero, we can make declaring your holiday home taxes a simple process. We can even backdate any tax that should have been paid to give you complete peace of mind – and avoid any unwelcome surprises like a fine in the post.
We collect all the information we need securely online, including documents, using our specially designed and easy to use forms.
This means you can give us the information to file the correct declarations without even being on the island.
In addition, as part of our service, we notify you on a regular basis throughout the year (at least quarterly) whenever we need information, to make sure a declaration is never missed and they are all filed on time. For some clients, this can be up to 22 Modelos a year, which is no small task!
Watch the video to see how easy it is to share your information with us:
How much tax do I pay?
Currently, the tax is 19% for all non-residents living within the EU, Iceland or Norway. You can also deduct expenses related to the rental of the property, to help reduce your tax bills.
For all non-residents living outside the EU, including British citizens, it’s 24%. In this case, you can’t deduct any expenses.
What are the returns or “Modelos” I have to submit?
Modelo 210 – Annual declaration.
It states who owns the property, whether sole ownership, joint/ married or a joint partnership. Each owner must make a submission.
We use the cadastral reference number and Cadastral Value from the IBI receipt.
Modelo 210 – Quarterly declaration
We use this to submit the rental status, which may be empty, sole use, short-term rental or long-term rental (including tenants’ details).
We declare the rental income for the quarter, the number of days the property was occupied (as a rental and for personal use), expenses incurred in the quarter and fixed assets. The rate of tax is 19% for EU residents, Icelandic and Norwegian citizens, and 24% for non-EU residents including British.
Modelo 400 – for IGIC
This is only required when you start renting the property or if there are any changes in the fiscal situation, for example going over the 30,000€ annual income threshold.
Modelo 420 – Quarterly declaration for IGIC
Sole owners and married joint owners with a rental income of less than 30,000€ are not required to pay IGIC.
Joint owners who are not married must pay IGIC on all income and each owner must submit the declaration.
This is not completed by you but is submitted quarterly by intermediaries such as Airbnb, HomeAway, property managers etc to include information from any bookings which have been taken through their platform, including the amount paid and days occupied.
What do you charge to take care of all of this for me?
At Rosenov and Quintero, we pride ourselves on offering a great service and value for money. With this in mind, we only charge 60€ per person, per modelo submitted.
An example of annual costs for someone who is not married, with joint ownership of their property (per person):
1 x Modelo 400 (only once a year)
5 x modelo 210
4 x modelo 420
1 x modelo 425
Total of 11 modelos for 660€ per year per person (or a total of 22 modelos for both owners together, 1320€ for the year for the property).
If you would like to know more or start working with us please go ahead and book your appointment. We’re looking forward to meeting you.
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