Thinking of renting out your property in Spain?

Make sure you understand the tax implications first

If you decide to rent out your property in Spain then you need to declare the income generated and expenses incurred on a quarterly basis throughout the year.  You’ll also have to provide similar information for your UK tax return.

In the past many non-residents have not submitted a rental tax return exposing themselves to the risk of fines.  This is because they’ve encountered language barriers with the forms and not understood the submission process or because they’ve paid UK tax on the rental profits and didn’t realise they also needed to complete a Spanish tax return.

From the 1st January 2010, non-residents in Spain can now deduct expenses from the rental income received, which means that any tax is now only payable on the profit generated as opposed to the income received. Therefore there is now a great opportunity to do things right in Spain, ensure that your Spanish and UK tax returns are based on the same figures, and ultimately pay very little or no extra tax.

Also, if your property is owned through a UK company then you still need to submit a tax return in Spain, although no tax will be payable as the tax is deemed to be paid in the UK.  Be aware that UK and Spanish tax years are different (April to March in the UK and Jan to December in Spain) and the overlap can sometimes cause confusion.

How Numerological can help you

We’ll explain how the rental tax process works in plain English to help you make an informed decision about renting your property.  If you decide to rent then we’ll ensure you comply with both UK and Spanish Tax legislation and ensure your tax liabilities are minimised. We can manage the whole process on your behalf:

To provide you with our Rental Tax service we simply need the details of your income and expenses incurred during the last calendar year in Spain.  To find out more please contact us