La Herrada Holiday Home Owners - Beware

johnzx

why would coincidences ever concern you?

Maybe you had taken a step towards Synchronisity

A thought

All Coincidences Have Meaning – Nothing Happens by Chance

why would coincidences ever concern you?

Probably in the same way that they always amaze you Tadd.

'Coincidence is God's way of remaining anonymous' - Quote by Albert Einstien

IMHO (and I am biased^^) One cannot cherry pick what Laws they think apply to them and ignore those that they dont. Neither can we expect the "authorities" to do the same, we should expect equal application for all. Earning rental income and deciding not to pay income tax to the Spanish Tax Office is evasion and subject to sanction. If you have bought a property without an LFO you cannot legally rent it or sell it to anyone, that fact that it happens or everyone else is doing it is not an acceptable excuse for not paying rental income tax or any other tax in Spain (and outside). Regarding property management companies or keyholders, before you hand over the keys make sure they have a provable track record and personally recommended, if not, dont take a chance with your home. If in doubt, and an agency has your keys, cancel and arrange to change the locks.

Lets just clear up the tax obligations on non residents renting out their holiday homes. A non resident holiday home owner will/should pay 'renta'  modelo 210 non resident tax on their properties - this is their only obligation to the tax man in Spain. Any rental income derived from renting out the property should be declared in their country of residence.

Any Spanish agent/keyholder etc acting for the non resident landlord should be declaring their commisson in Spain as income

Team GB I think you are wrong about where one pays the tax. (as do:-   http://www.advoco.es/advice/8-personal-tax/75-taxation-of-rental-properties-in-spain.html)

Even  people, who are tax resident in say Spain, pay income tax on lettings in the UK under the Double Taxation Agreements, albeit that they may also pay a ‘top up tax’ in Spain too ,  and vice versa.

When I did let many years ago, I set up a business, which included the rental, flights and insurance, which I declared to the Inland Revenue.  All my income on my apartment was generated and paid in UK,   I thus paid the tax on that in UK.  I am not saying that was 100% correct but the IR never said otherwise, although of course I would not rely on that to say what I was dong was correct.

I know few people here in Spain who do declare their income on rental property and both tax resident and non-resident pay in Spain on their Spanish property.  Again their gestors have not said that is wrong, but again I do not rely on that as proof of correctness.

PS I believe of one declares rental income in Spain there is some allowance against their liability for the 210 (2^nd home) tax.

Many of the privately let property owners have web sites with property details, letting callenders, email addresses, and phone numbers, it would be relatively easy for the revenue to check them out. 

John

Your Advoco link dosen't work for me but I have quoted them many times before, they are very good accountants/lawyers.

I do stand corrected on this - again from the Advoco site.

Non-residents who rent out their property declare the income by submitting a Form 210 quarterly and also paying the 24.75% tax (24% in 2015) quarterly. Owners that are tax resident in another EU country can make some deductions for allowable expenses and the tax rate will be reduced to 20% in 2015 (and 19% in 2016). To take advantage of this you must obtain a certificate of fiscal residence in your home country.

UK resident property owners need to declare the income on their tax returns and claim back through the double tax agreements

Many of the privately let property owners have web sites with property details, letting calendars, email addresses, and phone numbers, it would be relatively easy for the revenue to check them out. 

We all know how easy it would be if they were to put in the effort, but we do not know what resources they have or what those limited resources are already working on. 

The easiest way to discover tax dodgers would be to offer a reward for informers,  but many would find that distasteful.

Hacienda already have a fortune awaiting them in the estimated 95%  of tax residents who have not declared their assets, valued at 50,000 € + which they hold outside Spain. (see  www.ataspain.com/en/reporting-assets-outside-spain-form-720/ )  The penalties are astronomical, but I have only heard of one case where a Spaniard has been fined around  460,000€ for not declaring 350,000€ held in Switzerland   (the figures are approx.)

As an aside:  Many owners say how can Hacienda prove I was letting my property ?   It's esay,  ask the neighbours, they will know if the property was occupied at any given time.

An updated article dated 2nd July 2015 re holiday rental licences in Spain, region by region, may help to clarify the confusion re licences perhaps?

http://www.spain-holiday.com/rentalbuzz/holiday-rental-licences-in-spain-region-by-region

My wife's ex boss used to let us have his beach front apartment in Calpe for two 2 weeks holidays a year, he didn't charge us a penny, infact it cost him as he paid for a linen change. He also let his sister and her husband use it as and when they wished along with a couple of friends, to all intents and purposes it looked as though he was renting. We recall returning one October following leaving a half bottle of Soberano on the sideboard in May, it was still where we had left it, how does he prove that he isn't renting?  

Here we go again splitting hairs for the sake of an argument discussion.

It is specially written into the tax law that friends/family staying rent free creates no problems.

 I have no doubt that a person allowing a friend / relative to use his/her property could very easily prove who they are.  So no need to go chasing shadows !

It was many years ago, as I said I was just wondering how you can prove your case, no argument, not even a discussion as I was simply asking a question, not particularly of you.

The Tax Office will make an allegation and demand tax. The onus is on the Taxpayer to prove his case and disprove the allegations, else pay the tax.

Yes it's a lot easier to prove that you have done something than not isn't it? 

Duplicate 

johnzx is correct as in the UK it is very clear that if you are letting "connected" people (family friends etc) rent your property for free there is no tax obligation - however the landlord cannot offset any expenses incurred against a zero income

plenty of info on hmrc site

It's argarcia who is correct, just imagine convincing either the Spanish or UK revenue that all the folk that occupied your property were family and friends who didn't pay you a penny. 

I think you maybe jumping to the wrong conclusion.

Hacienda like HMRC are not out to get you at any cost. tThey are doing a job and nothing more. If one has nothing to hide they need have no fear.

I speak from expereience not from some idea I dreamed up  :-

Some years ago, Hacienda  wrote and asked me to make an appointment, as some one had told them I had failed to pay some taxes on a property I owned i.e. that I had been letting it but not declaring.

The interview was friendly and I was able to satisfy them that the allegation was malicious.  

At no time did they give me,  or threaten to give me, any tax demand.

I asked a question, not of you by the way, I didn't dream anything up, I thank argarcia for his answer.