Tax on Rental-Deductions

Post reply   Start new thread
:: New - Old :: Old - New

Pages: 1 |

Forum home :: Latest threads :: Search forums
The Comments
06 Feb 2012 00:00 by Dene Star rating. 23 posts Send private message

I am considering renting my apartment out , having owned it for a few years and always paying my annual taxes.

EU residents are allowed to deduct costs( mortgage interest, taxes,community fees etc) from the gross rent received.This is payable either when the rent is due or every 3 months.The question I have is how do I apply the deductions?

In the UK I would submit an annual return.So if I received 10 weeks rentals totalling 2000 euros during the year I would be able to deduct my expenses of 6000 euros for the year and thus make a loss and have no tax to pay.

However,do I add my expenses up for the year( 6000 euros) and then divide by 52 weeks to get 115 euros a week expenses.I would then be liable to pay tax on any rental of more than 115 euros for a week. It appears that I can only claim expenses on the weeks actually being let and the weeks it is empty would not count.

Like I said it is simple enough for an annual return,but gets confusing when the declarations have to be made every month or every 3 months.

Anyone got any advice?





Like 0      
07 Feb 2012 02:08 by johnzx Star rating in Spain. 5247 posts Send private message

I am pretty certain that, providing your community do not ban it, you will need permission from regional gov (in my case it would be Junta de Andalusia) that means a regular inspection, with a fee  (every so many years) and a permit.
 
Then, as a non resident, you will be required to pay, I think is just gone up from 24%  to 25%, on the total income, including electricity and water bills, etc., with NO DEDUCTIONS allowed for anything,  wear and rear, damage, loss of rent etc. nothing.
 
And, if you have the rent collected by an agency/ third party then maybe IVA too will have to added and IVA  tax returns submitted (maybe every time the IVA is collected).
 
Resident owners get to make deductions.
 
Hope this may have changed since I investigated it for my son a couple of years ago, someone will tell you. 
 
But, I know from asking several ‘experts’ (including some letting agencies) they all disagreed  with each other but all changed their advice when I questioned parts of it.   So I don’t know where you will get competent advice. Certainly not from people who have been renting for years (almost always illegally) and are not even aware of it. 
 
Also, remember that letting also carries potential problems of non payer, damage, upsetting existing neighbours, having pets, noisy/destructive children, just to mention a few.
 
Good luck.





Like 0      
07 Feb 2012 11:16 by Dene Star rating. 23 posts Send private message

John,thanks for your reply.

I was not aware of the need for a permit from the government etc. I would hazard a guess that virtually nobody who rents out an apartment, knows about or has such permission.Has anyone ever been caught out by this?

In relation to the tax,I have researched it via official channels( Tax office website) as I always pay my annual tax online with my user certificate. As of last year EU Residents are able to make deductions on rental received, the same as residents. Finally something beneficial from the EU.





Like 0      
07 Feb 2012 11:25 by johnzx Star rating in Spain. 5247 posts Send private message

Hi Dene
 
Quote             Has anyone ever been caught out by this?
 
Until a couple of weeks ago that’s what people were saying about Non Resident Property Tax.   But not any more !!!!
 
And I did say, Resident owners get to make deductions.
 
From the wording of your original post it appeared to me that you are not resident (tax resident) 





Like 0      
10 Feb 2012 09:57 by lookatme Star rating in Scranton. 3 posts Send private message

** EDITED - Spam **




This message was last edited by EOS Team on 18/02/2012.



Like 0      
10 Feb 2012 11:26 by westport Star rating in London & Co.Mayo Ire.... 509 posts Send private message

Couldn't have said it better myself !!





Like 0      
12 Feb 2012 15:54 by Poppyseed Star rating. 898 posts Send private message

Have no idea what an extract from the US IRS has to do with anything!

johnzx, dene said  "As of last year EU Residents are able to make deductions on rental received, the same as residents. Finally something beneficial from the EU." So I wonder does this mean residents of any EU country who are not resident in Spain but with rental property in Spain, or anyone from the EU residing in Spain with rental property?

I'm sure all countries would reap more tax revenue if they made the rules fair and simple!

 



_______________________

Poppyseed




Like 0      
12 Feb 2012 19:11 by Dene Star rating. 23 posts Send private message

Poppyseed.

I belive the rule now applies to all EU citizens. It is discrimatory and illegal to treat EU residents differently than Spanish residents.

So if you are resident in any other EU country you are treated the same as Spanish residents.

This is from The tax agencies website.

What is the taxable base when a non-resident has a rented building in Spain?

In general, the taxable base is the total amount received from the tenant including, if applicable, the amount of all assets included with the building and excluding Value Added Tax. No expenses may be deducted from the total amount of income obtained from this calculation.

Nevertheless, as we are dealing with taxpayers resident in another European Union member state, with regard to income earned from 1-1-2010, the expenses described in the law on personal income tax (IRPF) can be deducted when calculating the taxable base, as long as proof is provided that these expenses are directly related to the income





Like 0      
12 Feb 2012 23:45 by Poppyseed Star rating. 898 posts Send private message

Thanks Dene you are right. I took my own advice and did a bit of googleing and also found this

http://www.legaladviceinspain.com/taxation_in_spain/spanish-taxation-on-property-rentals.html


 



This message was last edited by Poppyseed on 13/02/2012.

_______________________

Poppyseed




Like 0      

Pages: 1 |

Post reply    Start new thread


Previous Threads

PROPERTY ADMINISTRATOR - 2 posts
Crisis?? - 0 posts
Earthquake - 3 posts
Mazarron apartment - 2 bed and 1 bath. - 1 posts
Working in the UK and having shares' dividends in Spain - 1 posts
Working in the UK, with share dividends in Spain - 0 posts
Recommendations for child friendly restaurants - 2 posts
EXPATS WALK FOR THEIR VILLAGE - 0 posts
surina - 4 posts
cats - 0 posts
FREEZING YUK - 6 posts
Riding a motorcycle in spain on a full uk bike licence - 6 posts
MR WIPPY - 3 posts
ITV test - 4 posts
Barclays Bank Espana accounts - 0 posts
Medievil Market in Orihuela - 5 posts
How Spain has changed in 10 years....??!!!! - 73 posts
GC Resorts / Silverpoint / Las Canarias. Advise please - 8 posts
Wanted koi carp - 1 posts
De-registering a Spanish Mortgage - 0 posts
Spanish gas boiler legislation in a rental property. - 3 posts
Non resident tax form certificate charges at Sol Bank - 3 posts
Water usage - 6 posts
cam mortgage - 8 posts
Calls from 1004? - 6 posts

Number of posts in this thread: 9

DISCLAIMER:  All opinions posted on these message boards are the opinion solely of the poster and do not necessarily reflect the opinion of Eye on Spain, its servants or agents.


1 |
Our Weekly Email Digest
Name:  
Email:
   


This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x