Changes in taxation of holiday lets - Page 2

With all the changes post BREXIT things may change but according to our accountants we are still legally liable to pay annual Non Residencia taxes and add all property rental earnings taxable under Spanish tax legislation ?? We live in UK with fully licenced holiday rental properties in Spain.

So thinking out loud again! The non U.K. earning Irish resident could actually be better off registering and paying tax in Spain. Then the U.K. worker keep U.K. rental income separate? I have Spanish friends who are tax specialists in Madrid might have to ask some advice 

What many people who have property (rented or not) seem to forget is they HAVE to complete an annual tax return in Spain - does not matter if they are residents or not - for many years they got away with not completing their tax return here - not anymore. The Spanish tax authorities are on all their cases now and WILL eventually catch up with them. The fines here are VERY high!!!!!!

I live in the UK and have the appropriate licence for my holiday let. I've been paying tax on income from this property and non resident tax since 2015. My question concerns the increase in tax on holiday let income and, in particular, the issue of no tax relief on purchases specific to the holiday let. I'm still waiting for confirmation of both these. 

Good morning - in reply to your message the latest information that we received from our Spanish accountants

was that:

Spanish Non Residencia Taxes would increase from 19% to 24%

Secondly you will no longer be permitted to claim against tax 100% any of the costs

incurred or associated in renting any form/type of property

Hope this may help

Thank you for confirming that information. I wasn't surprised at the rise in interest but I'm shocked that we will not longer get tax relief on holiday let purchases - I found that hard to believe, hence my initial post. Thanks again. 

Thank you for your reply and pleased ours was helpful.

I think there are probably other changes that will need to be made, as other countries 

such as Portugal who attract property rental buyers, reduce their rules and tax liabilities

on non national owners. 

We may see the Spanish having to backtrack, as they know very well the size of the 

income and tax gathering they receive from non residents on property and earnings. 

Post BREXIT changes, and rules, and legislation, are still 'up in the air'  in many cases, and we could see

further changes as a realisation of lost revenues, rather than gained revenues become a reality and the 

competition for non residents, between EU countries, becomes a great focus 

That was very interesting. I had been wondering if something of that sort might happen but I'm not an accountant (or politician!) so thought it was just wishful thinking on my part. I have asked my Spanish accountant for their comments twice, but they still haven't responded.  

As I understand it the 24% is chargeable on Rental Income with no offset of our costs: We can no longer make deductions for Mortgage, House insurance, Community Fees, Council Taxes etc.

If I rent out I can set the rent as plus Utilities so if I receive a fixed amount of rental I can deduct the utility costs for the period. 

Also if I have to pay an agent or website commission then I can work from the amount I receive, not the amount of rent I advertise the property for.

Also I haven't been asked to complete a NRT Annual Return by my Accountant, so it should follow that if you are letting out you are not subject to the Annual return and the quarterly one is sufficient. 

You cant really have holiday lets that dont include utilities but you could have long term lets in which case you would pay 24% of the rental income and  charge separately for utility costs.