My wife and I are resident here in Spain and have successfully been renting our house (licensed Vivienda Rural) mainly through AB and SH for short-term holiday lets (no extra services) during the summer for the last three years. We have not yet reached retirement age and this constitutes our only income over which we have been paying tax since we started. Our Gestor has now casually informed us that we are too successful, earning too much and that Hacienda will probably insist that we start charging 21% IVA and register as Autonomo.
Has anybody else faced or heard of this? This will have a big impact on our finances and will be especially painful for 2016 as we are nearly fully booked and cannot revise our prices now.
We will schedule a meeting with the Gestor to find out more but I like to go into these meetings armed with as much information as possible. Can anyone shed any more light on this or provide any links?
Holiday letting and IVA
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costa-brava
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The IVA question keeps popping up and each time the concensus opinion is that IVA is not payable on holiday rentals. If your property is "vivienda rural" and you rent it out as a complete dwelling you should be in this category.
I am fairly sure that this has not changed. However there may be changes for 2016 that I don't know about and would certainly like to know because my rentals may well put me in this new category.
There is always the question of whether you are renting out your private property or conducting a business and the interpretation may have changed, but again, not to my knowledge.
I always get shot down in flames by other posters when I say this but if you are resident in Spain you have to go to your local Agencia Tributaria (probably with a Spanish speaking friend) and get the answer from the horse's mouth.
Gestors come up with cookie ideas that suit their own purpose.
The law, as I understand it and hasn't changed, is that renting out a private dwelling in whatever form is not subject to IVA. The income derived from the rentals is declared in the section for income from real estate property (inmuebles), not as income from work so you do not need to register as "autonomo".
Please don't just take my (or anyone elses) word for this. The only way to get a difinitive answer is from the office of the Agencia Tributaria (hacienda) that handles your declarations.
Another option is to write a letter to them asking for clarification.
But gestors, accountants, assessors etc. will come up with a variety and confusion of answers.
I am fairly sure that this has not changed. However there may be changes for 2016 that I don't know about and would certainly like to know because my rentals may well put me in this new category.
There is always the question of whether you are renting out your private property or conducting a business and the interpretation may have changed, but again, not to my knowledge.
I always get shot down in flames by other posters when I say this but if you are resident in Spain you have to go to your local Agencia Tributaria (probably with a Spanish speaking friend) and get the answer from the horse's mouth.
Gestors come up with cookie ideas that suit their own purpose.
The law, as I understand it and hasn't changed, is that renting out a private dwelling in whatever form is not subject to IVA. The income derived from the rentals is declared in the section for income from real estate property (inmuebles), not as income from work so you do not need to register as "autonomo".
Please don't just take my (or anyone elses) word for this. The only way to get a difinitive answer is from the office of the Agencia Tributaria (hacienda) that handles your declarations.
Another option is to write a letter to them asking for clarification.
But gestors, accountants, assessors etc. will come up with a variety and confusion of answers.
hi and welcome to the forum-- LMH.
If you have lived here and have registered here in Spain then you should have been taxes on your income/businesses.
It is rather "strange" that it is only now that you are being asked to give a I.V.A. declaration.
The information below is given with the assumption that you have set yourself up correctly and work as an autónomo (either as a single person or via a single person S.L.). With either you should have done IVA declarations from the first year of trading.
Unlike the UK there is no exempt limit. Everything is in your IVA declaration.
As to the amount (%). We cannot confirm what you pay as we have to pay 10% because we run a business classed in the hotelería sector. Thus renting out a whole let maybe classed as 21%. However this seems to suggest that it is the former is correct for the letting sector too.
http://www.rankia.com/blog/irpf-declara ... iva-espana
If the details in the link are correct, then more questions than answers I am afraid.
If you have lived here and have registered here in Spain then you should have been taxes on your income/businesses.
It is rather "strange" that it is only now that you are being asked to give a I.V.A. declaration.
The information below is given with the assumption that you have set yourself up correctly and work as an autónomo (either as a single person or via a single person S.L.). With either you should have done IVA declarations from the first year of trading.
Unlike the UK there is no exempt limit. Everything is in your IVA declaration.
As to the amount (%). We cannot confirm what you pay as we have to pay 10% because we run a business classed in the hotelería sector. Thus renting out a whole let maybe classed as 21%. However this seems to suggest that it is the former is correct for the letting sector too.
http://www.rankia.com/blog/irpf-declara ... iva-espana
If the details in the link are correct, then more questions than answers I am afraid.
Never try to out-stubborn your guests.
We and CB posting at the same time.
Totally agree with him when he says go to the Tax Office. Unless you have got a gestoria that you can trust 100%. You are liable for the tax returns made so if any mistakes are made, even by the gestoria you are the one responsible. So go in person!
However disagree with him about vacation rental being I.V. A. free.
If you care to look at the link given it does not say anything about holiday rentals begin IVA free.
This link explains all that is IVA free.
http://cincodias.com/cincodias/2015/06/ ... 76458.html
Totally agree with him when he says go to the Tax Office. Unless you have got a gestoria that you can trust 100%. You are liable for the tax returns made so if any mistakes are made, even by the gestoria you are the one responsible. So go in person!
However disagree with him about vacation rental being I.V. A. free.
If you care to look at the link given it does not say anything about holiday rentals begin IVA free.
This link explains all that is IVA free.
http://cincodias.com/cincodias/2015/06/ ... 76458.html
Never try to out-stubborn your guests.
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costa-brava
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Here is a link to Agencia Tributaria
https://www2.agenciatributaria.gob.es/E ... GO=0106788
It directly answers the question but is both in Spanish and in government-speak. However this is my interpretation.
If you rent the property to or through an agency it enters the commercial sector and is subject to 21% IVA.
If you rent to a private individual it is exempt (IE you pay 0%).
If you rent to a private individual but provide services of cleaning, towels, food etc. during the stay, it then comes into the category of "hostalaria" and is subject to 10%.
If you use the gestor to collect payment, hand out keys and do all your accounting he may feel that it falls in the 21% commercial category.
When you talk about the subject of being "autonomo" you enter a different field entirely. Not only do you have to collect and pay IVA but you also need to register with Seguridad Social and pay about €275 per month of social security contributions.
I have checked your link CASA and while it does not specify holiday rentals as being exempt it lists "El arrendamiento de viviendas y la entrega de terrenos rústicos" which is the rental of private dwellings without services.
The reason that I worry about it now is that I am fairly sure that the government will at sometime close this loophole and at that point I think it will be at 10%. For now I'm 95% sure we are exempt but will check again on my next visit to the tax office.
I probably should say, because it was misinterpreted earlier this year, that I am not in any way a professional in these matters but I have done all my own "gestor" work since I came here nearly 30 years ago. In these years I have bought, sold and rented several properties. My main business was a language school and many of my students were gestores, estate agents, lawyers and notaries so I used to pick their brains. In the last couple of years I have been retired so that I am not so hot on what has changed during the Rajoy era.
But Casa, if you want to convince me that IVA is applicable to holiday rentals, you need to point me to an official link in the Agencia Tributaria or to a recent state bulletin. I really do need to know too if the situation has changed.
https://www2.agenciatributaria.gob.es/E ... GO=0106788
It directly answers the question but is both in Spanish and in government-speak. However this is my interpretation.
If you rent the property to or through an agency it enters the commercial sector and is subject to 21% IVA.
If you rent to a private individual it is exempt (IE you pay 0%).
If you rent to a private individual but provide services of cleaning, towels, food etc. during the stay, it then comes into the category of "hostalaria" and is subject to 10%.
If you use the gestor to collect payment, hand out keys and do all your accounting he may feel that it falls in the 21% commercial category.
When you talk about the subject of being "autonomo" you enter a different field entirely. Not only do you have to collect and pay IVA but you also need to register with Seguridad Social and pay about €275 per month of social security contributions.
I have checked your link CASA and while it does not specify holiday rentals as being exempt it lists "El arrendamiento de viviendas y la entrega de terrenos rústicos" which is the rental of private dwellings without services.
The reason that I worry about it now is that I am fairly sure that the government will at sometime close this loophole and at that point I think it will be at 10%. For now I'm 95% sure we are exempt but will check again on my next visit to the tax office.
I probably should say, because it was misinterpreted earlier this year, that I am not in any way a professional in these matters but I have done all my own "gestor" work since I came here nearly 30 years ago. In these years I have bought, sold and rented several properties. My main business was a language school and many of my students were gestores, estate agents, lawyers and notaries so I used to pick their brains. In the last couple of years I have been retired so that I am not so hot on what has changed during the Rajoy era.
But Casa, if you want to convince me that IVA is applicable to holiday rentals, you need to point me to an official link in the Agencia Tributaria or to a recent state bulletin. I really do need to know too if the situation has changed.
Do not feel the need to provide a link as you have already done it.
As you say 0% IVA if no services are provided. But every single holiday let provides something, like towels, bedding, maybe light, heating/aircon included.
This raises the question is "What is a service?"
Still waiting for the OP to clarify questions raised so far.
After all the OP has written about this vacation house being their only income. Your point, about paying SS, is also a good point. We all know that running any business means having to pay SS and taxes.
As you say 0% IVA if no services are provided. But every single holiday let provides something, like towels, bedding, maybe light, heating/aircon included.
This raises the question is "What is a service?"
Still waiting for the OP to clarify questions raised so far.
After all the OP has written about this vacation house being their only income. Your point, about paying SS, is also a good point. We all know that running any business means having to pay SS and taxes.
Never try to out-stubborn your guests.
Thanks for the welcome and detailed responses. What CB has written ties up with my previous understanding of the IVA issue and exemptions. I.e. basically as long as you’re not providing hotel-like services (meals, daily cleaning, room service etc.) there is no VAT to pay.
I’m not sure which questions Casa still wants me to answer. As I stated in the original post, we have been paying tax since we started. We have not been paying SS or IVA until this point because it was not required. Is there maybe some confusion between “Vivienda Rual” (Vivienda Turistística de Alojamiento Rural – VTAR) and “Casa Rural”? We are licensed as the former i.e. a rural holiday letting as opposed to a rural B&B. We have been successfully increasing our income year-on-year (by design and hard work) and it was only during a brief conversation with our Gestor on a different subject that this bombshell was dropped. It was not possible to go into more detail at the time, but we will when we get a chance. We will of course then also contact Agencia Tributaria to try and find out what’s going on, but it appears from the responses so far that this is either some misunderstanding on the part of the Gestor (not impossible) or it’s something new. As I stated in the original post I like to have as much information as possible before entering these discussions and I appreciate the feedback from the experts here.
Thanks once again.
I’m not sure which questions Casa still wants me to answer. As I stated in the original post, we have been paying tax since we started. We have not been paying SS or IVA until this point because it was not required. Is there maybe some confusion between “Vivienda Rual” (Vivienda Turistística de Alojamiento Rural – VTAR) and “Casa Rural”? We are licensed as the former i.e. a rural holiday letting as opposed to a rural B&B. We have been successfully increasing our income year-on-year (by design and hard work) and it was only during a brief conversation with our Gestor on a different subject that this bombshell was dropped. It was not possible to go into more detail at the time, but we will when we get a chance. We will of course then also contact Agencia Tributaria to try and find out what’s going on, but it appears from the responses so far that this is either some misunderstanding on the part of the Gestor (not impossible) or it’s something new. As I stated in the original post I like to have as much information as possible before entering these discussions and I appreciate the feedback from the experts here.
Thanks once again.
I cannot reply with any authority Torrox, but I have a vivienda rural in Andalucia and my accountant has made no mention of paying IVA. In actual fact I am registering as autonomo because I have recently moved to Spain and am working on a freelance basis so I have to do this, but it has nothing to do with my pre-existing holiday let. How much rental income per annum are you generating?
I think there are a few members hanging on your reply and the thoughts of all the responders as your quires need to be sorted out.I’m not sure which questions Casa still wants me to answer.
Try and make this clearer, with more question numbering and better punctuation. Not all are from us.
- 1- You have written this is your only income. Is that correct?
2- If that is correct have you filled out any declarations or paid SS over this money?
3-If the answer to the above is yes, then what are you trading as? (autónomo (either as a single person or via a single person S.L.)).
4-Does your gestoria collect the payments due, or provide any other services for your business?
5-What services do you provide for your business?
6- We fully understand what the gestoria suddenly says you may have to now pay I.V.A. Have they ever given to you any information as to why?
Casscat, the question is not related to earnings it is all related to filling out tax declarations and paying SS. Glad you are in with this as you will be influenced on how you run your business too.
Open question the laws appertaining to the issuing out of licences for vivienda rurals in Andalusia comes from the Junta and is cascaded down for each concello to actually issue the paperwork?
Never try to out-stubborn your guests.
In response to casasantoestevo's questions:
1. Yes
2. Income tax fully paid but no SS.
3. N/A. We are simply renting our primary residence.
4. No
5. None. We rent the entire property and live in an outbuilding during the rental period.
6. Not fully yet (as explained previously), but it was based on our rental income.
1. Yes
2. Income tax fully paid but no SS.
3. N/A. We are simply renting our primary residence.
4. No
5. None. We rent the entire property and live in an outbuilding during the rental period.
6. Not fully yet (as explained previously), but it was based on our rental income.
Thanks for answering.
How one can earn money, via an income be taxed on it and not pay any SS is difficult to understand, but hay-ho.
How you start paying IVA, without having some sort of registration as an autónomo is also a difficult. I do not think you can do any IVA returns with just using your personal NIE number. So that is something to the gestor ask about.
However if you have to set up as an autónomo then it is not only paying the IVA required to consider. Another question for the gestor.
Going back to the services supplied you may have to ask to confirm what is covered by services. I doubt you let the property without sheets or light etc.
Now not knowing much about your relationship with the Gestor. We have a quite a good one so we put a lot of trust in her. But at the same time we also do our research.
There are just two basic questions to ask the Gestor
How one can earn money, via an income be taxed on it and not pay any SS is difficult to understand, but hay-ho.
How you start paying IVA, without having some sort of registration as an autónomo is also a difficult. I do not think you can do any IVA returns with just using your personal NIE number. So that is something to the gestor ask about.
However if you have to set up as an autónomo then it is not only paying the IVA required to consider. Another question for the gestor.
Going back to the services supplied you may have to ask to confirm what is covered by services. I doubt you let the property without sheets or light etc.
Now not knowing much about your relationship with the Gestor. We have a quite a good one so we put a lot of trust in her. But at the same time we also do our research.
There are just two basic questions to ask the Gestor
- *Confirm how this has notice that you will have to pay IVA over the rent has come about. There is no IVA threshold, unlike in the UK.
*If need be ask about how this is done, ie will you have to set up a businesses.
Never try to out-stubborn your guests.
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costa-brava
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There is no problem in earning money without paying social security. I have "retired" twice and in the period between I paid no SS but now have a Spanish state pension based on the contributions I made while my Language school was running. During the time I was first "retired" the school was rented to another teacher and as it was (and still is) a commercial property I had to charge her IVA. So the system is much more flexible than some people make out.
I have to disagree with Casa that you will get answers from the gestor. It is always best that you have pretty clear answers BEFORE you go to the gestor.
You are renting out your own house and as long as you declare the income you should not have these complications.
Hope it all works out for you.
I have to disagree with Casa that you will get answers from the gestor. It is always best that you have pretty clear answers BEFORE you go to the gestor.
You are renting out your own house and as long as you declare the income you should not have these complications.
Hope it all works out for you.
We know your views on Gestors. But sorry but you are taking our words and mixing them with your views. If you read the words written it is about our relationship with our gestoria.I have to disagree with Casa that you will get answers from the gestor.
We also said we do not know what Torrox's relationship with their Gestor is like.We have a quite a good one so we put a lot of trust in her. But at the same time we also do our research.
We would respectfully read what is written. We do ask that if it is unclear then please ask for clarification. This is what Torrox did. Reading this thread back we could see why there was confusion. Hence the post with the numbered questions for clarification.
Never try to out-stubborn your guests.
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costa-brava
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Thanks Casa. Glad you cleared that up.
Here is a link to Louise 2014 in Spain Holiday. It's now a couple of years out of date but SH are superb at keeping up to date with the laws. They have good connections with senior government officials in all the regions.
http://www.spain-holiday.com/rentalbuzz ... ntal-owner
Here is a copy of what she says:
*Should I be charging IVA on my holiday rental?
Whether you are a resident or not, you don’t (at the moment) charge IVA on your rental income. Unless you are renting the property to a registered business, in which case you must charge IVA.
You must charge IVA on any services you provide i.e. cleaning, transport, catering. The invoices you receive pertaining to the property (with IVA) are costs deductible and can be offset from the rental tax declaration. Also home insurance, mortgage, rates and community fees are deductible and offset from the rental income.
Simple? Not quite.
If you are a non-resident using a management or property agency to manage your holiday rental (whose company is registered with the social activity of ‘explotación de bienes inmuebles’), then you must be registered for IVA (VAT) in Spain to receive your rental payments from them.
If you using the services of a management company, they should retain the 24.75% from your rental income to pay to Hacienda (tax office) in your yearly accounts. If you choose to manage your property independently, you will need to register yourself with the tax office as charging IVA and make sure you retain 24.75% of your earnings for end of year tax purposes.*
I think you'll agree that this concurs with my opinion (except I didn't know about the 24.75% retention). For those not familiar with this it is a common Spanish system whereby the most positively registered party in any transaction retains the taxes on behalf of the other party.
But the bottom line is that as things stand for any type of rental of a dwelling (flat or house), in a private, person to person situation.there is no IVA. Full stop!
If gestors are saying otherwise you have to question their reliability. I am not mixing other people's words and views. I am simply stating my view which is based on substantial experience and not just on opinion.
By the way, Torrox I admire your pluck in what you are doing. About 28 years ago we tried the same as you. Mum, Dad and 3 kids crammed into the garage for 2 weeks while a French family rented our house. As a reward the kids got a new telly which we fitted out with the dual system to get programmes in the original language. We got quite a few English programmes in Catalan TV. It's nice to know that the spirit of adventure is still alive.
As we Scots say, "Lang may yer lum reek".
Here is a link to Louise 2014 in Spain Holiday. It's now a couple of years out of date but SH are superb at keeping up to date with the laws. They have good connections with senior government officials in all the regions.
http://www.spain-holiday.com/rentalbuzz ... ntal-owner
Here is a copy of what she says:
*Should I be charging IVA on my holiday rental?
Whether you are a resident or not, you don’t (at the moment) charge IVA on your rental income. Unless you are renting the property to a registered business, in which case you must charge IVA.
You must charge IVA on any services you provide i.e. cleaning, transport, catering. The invoices you receive pertaining to the property (with IVA) are costs deductible and can be offset from the rental tax declaration. Also home insurance, mortgage, rates and community fees are deductible and offset from the rental income.
Simple? Not quite.
If you are a non-resident using a management or property agency to manage your holiday rental (whose company is registered with the social activity of ‘explotación de bienes inmuebles’), then you must be registered for IVA (VAT) in Spain to receive your rental payments from them.
If you using the services of a management company, they should retain the 24.75% from your rental income to pay to Hacienda (tax office) in your yearly accounts. If you choose to manage your property independently, you will need to register yourself with the tax office as charging IVA and make sure you retain 24.75% of your earnings for end of year tax purposes.*
I think you'll agree that this concurs with my opinion (except I didn't know about the 24.75% retention). For those not familiar with this it is a common Spanish system whereby the most positively registered party in any transaction retains the taxes on behalf of the other party.
But the bottom line is that as things stand for any type of rental of a dwelling (flat or house), in a private, person to person situation.there is no IVA. Full stop!
If gestors are saying otherwise you have to question their reliability. I am not mixing other people's words and views. I am simply stating my view which is based on substantial experience and not just on opinion.
By the way, Torrox I admire your pluck in what you are doing. About 28 years ago we tried the same as you. Mum, Dad and 3 kids crammed into the garage for 2 weeks while a French family rented our house. As a reward the kids got a new telly which we fitted out with the dual system to get programmes in the original language. We got quite a few English programmes in Catalan TV. It's nice to know that the spirit of adventure is still alive.
As we Scots say, "Lang may yer lum reek".