Changes in taxation of holiday lets - Page 3

Why not?

Why should anybody have to pay 24% tax on utility costs because the rental fee quoted includes Utilities?

I am trying to find the facts about what the new rules are. 

some info here

https://www.spanishsolutions.net/blog/brexit-and-spain/holiday-homes-costs-increase-for-british-post-brexit/

Sorry I did not find that helpful..

If you are a non-resident owner of a property in Spain you must pay:

1) Local Council Tax 'IBI'

plus

2) Income tax  either:

a) Imputed Income Tax based on the value of your property and paid on a yearly basis. The Spanish Tax system is based on calendar years.

or

b) Rental Tax If you rent out your property for some or all of the year, collected quarterly on the 20th April, 20th July, 20th October and 20th January.

As the UK is no longer in the EU the rate is 24% based on the gross income of the property.  Nobody seems to be able to provide a clear explanation of what gross income is. 

- no expenses can be deducted e.g. Mortgage, insurance, IBI, Community fees, from this amount. I accept that.

- What about utility fees for the property whilst it is let out to a tenant?

    - If it is a long term let then a tenant can reasonably be expected to take over the utility accounts. 

    - Short Term lets are more difficult but it's not impossible to set out a final invoice showing the utility costs as part of the total charge to the renter.

- Does the Gross Income mean the rent as advertised on a web site? Does it include the fees paid by a renter to the website or agent when a booking is made?

- What is the Spanish Government attitude to taxing people for things that tax has already been paid for, i.e. utilities ???? 

Does anyone know the position for owners who allow friends and family to use their holiday home on an informal basis? 

In the past we have stayed at a friend's place in Spain and paid him to cover his basic costs for the fortnight, including cleaning when we left. If we buy a property, we would like to do the same rather than leave it empty for long periods. 

everyone who stays has to register with the guardia paying or not so you would still need a tourist licence. The dates friends and family stay would just be a nil income. This is how we have shown on our tax return for the last couple of years.

Thank you, that's really helpful. Especially as there is quite a queue of people eagerly anticipating our decision to buy, which I am sure is not unusual. 

Yap!! Once things start to get back to normal everyone will want some sun!!

Crissywissy is right to say that anybody that stays has to register with the Guarda Civil.

From that it means that the Owner has to have the necessary tourist license as it is the License Holder/Owner's responsibility to register the 'guests' with the Guarda Civil. My agent is very good at doing this for us, some I believe are less legal.

It also puts you in the position of paying 'Rental Tax' on a quarterly basis not the Imputed Income tax on a yearly basis.

Any money paid to you for 'Basic Costs' will be subject to 24% Rental Tax on the Gross amount. See my other posts about this, as there is a difficulty with Utility Costs, if it were a long term rental where the tenant signs up to the utility companies then it's clearly not the gross income.

I had a long conversation with the owner of a holiday rental website yesterday which has brought me to these clear conclusions:

Many people are still avoiding the rules, wanting to let properties out that have not been properly registered and evading the tax on property rentals. 

The Authorities are tightening up, they are taking Covid very seriously and whilst the EU will be defining a Covid Passport, and we in the UK may want to jump up and down about Human Rights, the UK government has no choice but to implement a system that facilitates travel to the EU. Or you stay at home.

So expect more thorough checks at the Airport on arrival.

If the property is not registered, then there may be a problems with immigration / Guarda Civil about where you are staying. One of the reasons being that previously if an agents address was given, the Guarda Civil did not know where the person was if they needed to visit ....

Also, with Covid, there may be restrictions on travel between local areas carrying forward, so a proper address must be essential.

Which will all give the authorities more opportunity to work together in the future to flush out people breaking the rules, be they Covid, Immigration, or taxes. 

The problems are not insurmountable, the Murcia Tourist Rental License is currently free, and my managing agent organised it very efficiently through her solicitor. To me it's one of those things that had to be done and it's best to get it right than risk the consequences.

And I don't speak Spanish apart from the essential conversation and I'm sure your guests will want to have documentary proof  and not rely on Google Translate in a conversation with the Guarda Civil.. 

If you are buying in Spain have a good look at the posts about Banking. I have a Spanish Bank Account that is linked to my mortgage, the only thing I now use it for. I also have a UK based Euro Account which is great at converting pounds to Euro at the best rates, (I envy those who get to change Euros to pounds). Currently there are a few problems that are being worked through around non-compliance with the SEPA (Single Euro Payments Area) regulation by Spanish businesses and banks.  

Mike