Holiday lettings: “Con factura, por favor.”

Raymundo Larraín Nesbitt, January, 21. 2019

By Raymundo Larraín Nesbitt
Lawyer – Abogado
21^st of January 2019

These four simple words in Spanish ('with a VAT invoice, please') can save you a massive amount of money when you pay non-resident taxes in Spain.

Following new EU regulation, all non-resident EU/EEA property owners who lease property, are entitled to deduct from their quarterly tax bill all property-related expenses (Iceland, Liechtenstein and Norway tax residents may also benefit from these generous tax deductions). That is quite a lot of money you can offset, greatly mitigating your tax bill. If you are not EU-resident, you cannot benefit from this.

This is understood as expenses that contribute towards the upkeep of your Spanish property.

Anyone handing you an invoice without VAT, is not tax-deductible. Make no mistake, as you cannot offset this expense you are in fact paying for the tax of this other person. I don't know about you, but I've never fancied paying for other people's taxes out of my own pocket...

You may claim as tax relief all the following expenses, providing you have been issued with a proper VAT invoice (till receipts from supermarkets or petrol stations are not acceptable).

Interests arising from a loan to buy the property (i.e. mortgage loan).
Local taxes and administrative charges and surcharges that impact on the rental income or else on the property itself (i.e. IBI tax, SUMA tax, rubbish collection tax).
Expenses arising from formalising rental contracts such as lets or sublets (i.e. Notary and/or Land Registry fees); legal defence (i.e. hiring a lawyer for tenant eviction purposes).
Maintenance costs may be offset; refurbishment expenses (improvements) are excluded.
Community of owners’ fees: these receipts have no VAT, by Law.
Home insurance premiums: fire, theft, civil liability etc.
Property repairs: plumbing, roof retiling, painting, pool pump etc.
Utility invoices: electricity, water, gas, internet, and landline.
Cleaning
Concierge, gardening & security services (i.e. gated communities).
Lawyer’s fees: to calculate you quarterly tax returns.
Property management fees: to manage your rentals.
Advertising expenses: online/offline.
Marketing expenses.
Home depreciation and amortization. The calculation is 3% on the highest value of the following two: home buying costs or cadastral value; the value of the land is excluded.

We lower by 70% our client’s tax bills, on average. What are you waiting for? Call or email us.

We offer the most competitive fees in the market.

Non-Resident Imputed Income Tax (Fiscal Representation Service) €90/year

Holiday Rental Accounting Service (HRAS) €100/tax quarter

We are specialized in taxation

Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in taxation, conveyancing, inheritance and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

Legal & tax services available from Larraín Nesbitt Lawyers:

Non-Resident Income Tax (Fiscal Representation) from €90
Holiday Rental Accounting Service (HRAS) from €100
Registration of Holiday Homes (Andalusia)

Holiday lettings-related articles

Holiday Rental Laws in Spain – 8th of March 2015
Non-Resident Taxes in Spain – 8th December 2015
Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
Renting in Spain - Landlord´s Taxation – 8th of January 2017
Holiday Home Taxation in Spain – 8th of July 2017
Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
Non-Resident Income Tax – 8^th December 2017
Holiday Rental Taxation in Spain – 8th July 2018
Renting in Spain: are you still overpaying income tax every quarter? – 16^th October 2018
You are taxed at source on renting out in Spain – 30^th November 2018
Did you get an email from AirBnb over your Spanish tax details? – 21st December 2018
Important information from the Spanish Ministry of Finance – 7^th January 2019

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.