Holiday Home taxes and accounting making your head spin?


Holiday Home taxes and accounting making your head spin?

Sorting your accounts and taxes should be simple. With us, it is. We'll take away the confusion so you can rest easy, knowing everything's being taken care of and you're making the most of your rental income.

You didn’t invest in your holiday home to spend time crunching numbers, bookkeeping or figuring things out in spreadsheets. You purchased it to enjoy spending time in the sun, or create an additional stream of income to support the life you want to build.

We’re here to help you make that happen, with less time thinking about the numbers. We’ve created simple forms and processes to collect your information whenever it’s needed, and from wherever you are in the world, whether you live here or abroad.

Your holiday home taxes are calculated and emailed to you there and then, making it quick, easy and as painless as possible.

Resident holiday rental owners

If you’re a resident holiday rental owner you’ll declare your income and pay tax on it in one of two ways.

You’ll usually pay quarterly and annual returns, based on the income received. You’ll be able to deduct expenses for running costs as maintenance costs.

We’ll give you a full overview of deductible expenses and how to maximise your profits when we begin working together.

We’ll remind you each quarter to send the figures for income and expenses via a simple form to keep your official books and records up to date, comply with local regulations and to calculate your returns.

If you’re employed by a company and rent your property as an additional activity, we can declare the rental income with your annual tax return, the “Declaracion de Renta”. You can still deduct expenses, but doing it once a year keeps life a lot simpler for you.

Depending on your circumstances, you may also have to charge IGIC, a small tax of 7%, on top of your rental fee.

We will register you for this if you aren’t already, and advise you when if and when it applies.

If you’re an individual or part of a married couple where you’re the only one registered to take the income, you’ll only charge IGIC if your income exceeds €30,000. However, if you’re a co-owner with a sibling or friend for example, you’ll both register to receive that income and both have to apply IGIC.

Non-resident owner - getting set up for rentals

If you’re just getting started you’ll need to register with Hacienda, the local tax office, to complete the application for your VV rental license. We collaborate with someone who’ll take care of this with you before we take our next steps together.

Before you take your first rental, we’ll register you for IGIC which is the local version of VAT. You won’t actually start charging that until you earn more than 30,000€ a year, unless you’re a co-owner with someone who is not your spouse.

We’ll guide you through everything you need to know, from the basics like creating invoices to any deductible expenses and our easy process for collecting your information every quarter to calculate your holiday home taxes.


Quarterly holiday home taxes

If you rent your property out we’ll submit quarterly tax returns based on your rental income. The tax rates are different for EU and non-EU members.

If you’re an EU member, Norwegian or Icelandic citizen, you’ll pay 19% tax and can deduct various expenses against your earnings. These include maintenance, cleaning, insurance, management fees and more. We’ll give you an overview of these when we register you in the system.

If you’re a non-EU or British citizen, you’ll pay 24% tax on your earnings and no expenses can be deducted.

We make the process simple. Once registered with us, you’ll receive a form via email at the end of each quarter, asking for your rental income, total expenses in each category and number of days rented.

Simply fill it in and sign, and you’ll receive a reply with the completed return showing the amount due and the invoice.

The tax will be deducted from your bank account via direct debit on the 20th of that month (April for the first quarter, July for the second quarter, and so on).

At the end of the year we’ll also submit an informative resume confirming your income and days rented. This is the model 425, and is used by the tax office to determine whether you’ve crossed the threshold to start charging IGIC in the following year.

You don’t have to worry, from your point of view it will be one more simple form we send you at the end of the year to confirm your figures, and then we’ll take care of the rest.

Before working with Ivo, I struggled with language issues and being unable to access information. Rosenov and Quintero are very helpful, reliable and easy to communicate with via apps and whatsapp.


Spanish property tax

This is also known as the Imputed Income Tax. Whether you rent your property or keep it for personal use, you’ll have to submit an annual tax return based on a percentage of the catastral value and the days rented (or not).

We submit this tax return in December for the previous year and we’ll remind you when it’s due, so you don’t have to worry about keeping track.

The cadastral value can change a little each year, and is shown in your IBI receipt, the Canary Islands equivalent of a council tax. We’ll ask for your latest copy of that when we collect your information for the year.

If you’re a part owner of the property with your spouse, partner, sibling or friend, both of you will need to make a declaration.

If you were previously unaware of this, don’t worry, it’s not too late. We can submit the returns for the previous years you missed, and a very small fee will be added for late payment. This option is much cheaper and less stressful in the long run than receiving a fine from the tax office for non-payment.

General taxes: IBI and Basura

We’ve included these for any of you who are new to the islands.

Every year you’ll pay the IBI, which is the equivalent of the local council tax, and the Basura, which is a contribution towards the local rubbish collection service. Both of these are payable at the town hall, but you can set up a direct debit to have them taken automatically, which we recommend so you don’t miss any payments.

Your IBI is calculated on the cadastral value of your property and as such can vary a little from year to year. If and when you come to sell your property, you’ll need to show your latest receipt to prove there are no outstanding debts against the property.

Let’s do this thing! Ready?

We can’t wait to meet you.
Send over your info and we’ll schedule a time to discuss your needs and find the best way to move forward.