Spanish Government Up Their Game On Holiday Home Rental Tax Avoidance

[Stone Free]

The Spanish government recently introduced a new law.  The likes of HomeAway and Airbnb will have to submit a quarterly declaration of income (modelo 179) to the Spanish tax authorities for properties advertised on their websites. 

This will include the property address, details of the owners, the number of days for which rentals were booked and the amount of income received by the owners. It is applicable to both Spanish resident and non-resident owners.

It appears that to legally rent out a holiday property you now have to do the following:

1 Register for IGIC (Canarian VAT) and make a quarterly declaration.

2 Obtain a Vivienda Vacacional licence.

3 Register the property with the Guardia Civil.  Provide details of all guests with names and photocopies of passports. 

4 Do quarterly returns to the tax authorities (it might be annually) declaring rental income.

It is understandable for the Spanish government to track down non tax payers.  But with all this bureaucracy (and boy, do they love it), it does make you wonder if it`s worthwhile renting out a property for holiday lettings.

[el caballo hambriento]

What law is this?  Source of information please.

[emmi]

It varies from region to region, but here's a kind of breakdown
https://www.spain-holiday.com/rentalbuzz/latest-licencing-news-proposed-changes-to-holiday-rental-licence-laws-in-spain

[erik_tonny]

It varies from region to region, but here's a kind of breakdown
https://www.spain-holiday.com/rentalbuzz/latest-licencing-news-proposed-changes-to-holiday-rental-licence-laws-in-spain

Thank you for bringing this very informative artical to our attention.

[spitfire58]

I think this proposal is downright criminal TBH !!
I doesn`t affect me in the slightest as I would never rent our place out but that is beside the point.
Just take Caleta as an example, if all privately owned properties are banned from rental that accounts for a large number of bed spaces in the town. Do they actually have any comprehension of what that will do to the tourist trade, the life blood of the local economy !! I get it that this has been forced/brown enveloped by the hotel trade so they have a captive audience but this is just wrong on so many levels.

[el caballo hambriento]

It is not a law but a proposal at this stage.

[Will196]

How much of that is actually new?

[dagwood]

I think this proposal is downright criminal TBH !!
I doesn`t affect me in the slightest as I would never rent our place out but that is beside the point.
Just take Caleta as an example, if all privately owned properties are banned from rental that accounts for a large number of bed spaces in the town. Do they actually have any comprehension of what that will do to the tourist trade, the life blood of the local economy !! I get it that this has been forced/brown enveloped by the hotel trade so they have a captive audience but this is just wrong on so many levels.

I`m suprised that an upstanding member of the community like yourself would condone tax evasion. But there you go, you never know.

[malabu]

Silly thing is Hotels are in the main full so where do the extra guests go

[Ivemovedon]

Another place for a holiday.

[Charlie dont surf]

I think this proposal is downright criminal TBH !!
I doesn`t affect me in the slightest as I would never rent our place out but that is beside the point.
Just take Caleta as an example, if all privately owned properties are banned from rental that accounts for a large number of bed spaces in the town. Do they actually have any comprehension of what that will do to the tourist trade, the life blood of the local economy !! I get it that this has been forced/brown enveloped by the hotel trade so they have a captive audience but this is just wrong on so many levels.

What's criminal about a system that regulates holiday rentals and establishes a method for collecting taxes? Why don't you take a minute to read the link that Emmi posted. It's happening all over Spain so why should the Canaries be any different. The only people that could possibly protest are those that currently rent out and are avoiding paying Tax so don't give us "it doesn't affect me in the slightest" silly nonsense

[spitfire58]

Silly thing is Hotels are in the main full so where do the extra guests go

Presumably somewhere else !! I can understand the hotels lobbying/backhanding to give them the biggest slice of the tourist pie, that is just business, even if blinkered. What I don`t understand is how the politicians/councils can be so blind as to not see what the result will be. What they should be doing it making the private rental market more open (with proper easily obtained licenses) & coming down hard on the tax dodgers. IMO

[Stone Free]

What law is this?  Source of information please.

http://www.bennecke.com/post/holiday-rental-platforms-to-report-to-spanish-treasury-from-october/

https://www.janetanscombe.com/news/hacienda-gives-notice-that-its-after-private-holiday-letting-tax-dodgers.html

https://www.ebfconsulting.com/new-tax-form-modelo-179-quarterly-report-for-holiday-rentals/

https://www.boe.es/boe/dias/2018/05/30/pdfs/BOE-A-2018-7152.pdf

[Stone Free]

How much of that is actually new?

Modelo 179 is new.

It just adds to all the existing tedious regulations of renting out a holiday home or apartment. 

It all seems like more bother than it's worth.

[Charlie dont surf]

If it comes into force this time around expect property prices to crash.

[Lexeus]

Silly thing is Hotels are in the main full so where do the extra guests go

Presumably somewhere else !! I can understand the hotels lobbying/backhanding to give them the biggest slice of the tourist pie, that is just business, even if blinkered. What I don`t understand is how the politicians/councils can be so blind as to not see what the result will be. What they should be doing it making the private rental market more open (with proper easily obtained licenses) & coming down hard on the tax dodgers. IMO

I imagine that the result would be lots of people handing over control of their property to a management service that rents in out on their behalf and handles all necessary declarations/paperwork. It will create more jobs in Spain to replace some of those that have been lost in the big hotels because of the AirBnB competition

[Ivemovedon]

The Spaniards tails are up because tourism is doing well. They can now afford to pick and choose whereas a few years ago they were competing more with medium haul Moslem countries.

Got a few quid to invest do it in the UK. No license needed for residential lets, no silly rules and regulations ,no chasing up passports and no trips to the police or the added cost of an interpreter. You can also rent out space in your own home tax free up to around £7,500 or £3,500 jointly. Another advantage is you can check if there's any dodgy sub letting going on as you aren't a 4 hour flight away.

Go on you know it makes sense, give the spicks the elbow.

And as an afterthought you can also keep on top of the management companies, many of whom in FV in my opinion were useless. There were some good ones I have to admit but it took us a long f...ing while to find them.

Downside is you don't own a place in the sun. But then if you are renting it you won't be using it anyway.

[Will196]

How much of that is actually new?

Modelo 179 is new.

It just adds to all the existing tedious regulations of renting out a holiday home or apartment. 

It all seems like more bother than it's worth.

179 is what AirBnB will need to fill out? It doesn't seem to add anything to the home owner.

[Will196]

If it comes into force this time around expect property prices to crash.

Which would be good for the working families who now can't afford homes. 

[Grampiangranny]

Got a few quid to invest do it in the UK.

Maybe not Scotland.  The old minimum rental period of 6 months has been outlawed, allowing a tenant to move at any time after one month's notice. Who wants to clean and decorate a rental property for someone to trash in 30 days?

[Ivemovedon]

You're right...maybe not Scotland

[Charlie dont surf]

Labour will be imposing a new tax for second home owners when they win the next Election so your investment idea not be such a good idea.

[Charlie dont surf]

If it comes into force this time around expect property prices to crash.

Which would be good for the working families who now can't afford homes. 

Indeed it would.