What are the legalities surrounding rental properties in Spain
In an effort to ensure rented accommodation complies with European health and safety law, to protect Hoteliers, and to ensure that incomes received from short term lets are made liable for, tax by the Spanish Government, in 2013 new legislation has been introduced affecting the rental of property to tourists.
The new laws and requirements do not affect renting in Spain for long term lets but other legislation previously in place does. Legal advice from your lawyer in Spain should be taken as to what rules apply in the region you are buying, if you wish to rent out the property on a tourist let basis.
Whilst it is difficult to ascertain how true the rumors are it is widely reported that the authorities will scour websites to look for properties being rented out, will require from utility companies details of consumption to look for spikes in usage indicating short term lets, and will make regular visits to residential areas where the believe tourist rents might be happening.
New legislation regarding Energy certificates in Spain
For both long term and short term letting where the property is let for more than 4 months of the year it is now also necessary for an energy certificate to be applied for and granted.
Do I need advice when considering renting my property in Spain
Failure to meet the new legislation or failure to pay taxes can expose the owner to hefty fines so it is best when considering renting or selling your Spanish property to take expert legal advice as to the possible implications of what you intend to do.
What do I need to do to meet the new laws for renting of Spanish Properties on tourist lets
To meet the new legislation, if you intend to let out your apartment in the short term, you must meet the same regulations as imposed on other Tourist accommodation like Hotels and Campsites, and must adhere to minimum health safety requirements and minimum quality of accommodation. Some regions to whom the new law be devolved for implementation will require you apply for and gain a licence before the property can be let.
Am I liable for paying Spanish Tax on my rental property even if I am nonresident in Spain.
Yes you should pay tax on your rental income and declare this in Spain. Owners of property in Spain will then declare the income and the tax already paid on the tax return in country residency but if you reside in a country with a dual taxation treaty, tax will not be payable again. Unlike some countries in Spain it is not possible to offset fully interest payments on a mortgage against rental income unless the property is set up in a company and run as a commercial entity. Private owners will be able to offset interest payments on a mortgage and other costs for the proportion of the year the property has been let out on a pro rata basis, if the tax office accepts it has been let out for the percentage of time you are claiming relief for.