Taxation and Licensing of Short Term Rental Properties
Homeowners who regularly rent their property on a short-term basis (ie for several nights or up to several weeks at a time), more specifically as a business venture (for profit), are now required to register as “self-employed”, and pay VAT on all rental income on a quarterly basis.
Although it can be tricky to distinguish between the occasional rental and a serious business, usually if the rental includes linens, towels and a cleaning service (much in the same way as the hotel industry), then it is classed as a “Vivienda de Uso Turístico”, and thus as a business. Property rentals through websites such as Airbnb fall under this category if the duration of individual rentals is less than 31 days.
If the rental activity doesn’t fall under this category (although most do tend to), owners may declare any income generated on their basic Spanish tax return (declaración de la renta de las personas físicas) each quarter, or in the case of non-resident owners, a “Modelo 210″ form.
If the owner is a resident in Spain (for over 183 days per year), they will be required to register as “Autónomo” or “self-employed” and pay Social Security contributions. These fixed monthly payments can be costly if the apartment is not rented regularly and worth taking into consideration (approximately €280 per month). All holiday rentals are subject to 10% VAT (IVA) which is frequently added to the rental tariff, and must be shown in all invoices and accounts.
“Autonomo” businesses must submit their accounts every 3 months and pay Personal Income Tax on all profit from the apartment rental. As of 2015, the current flat rate for income tax in Spain ranges from 24% up to 45% depending on total annual income.
We strongly recommend seeking the advice of a professional tax advisor (known as a “gestor”) or accountant with comprehensive knowledge of current tax regulations in Spain.
The license system or H.U.T (Habitatge dús turístic), was initially implemented in 2012 in response to increasing volumes of international visitors to the city of Barcelona and beyond. Though the regulations vary from district to district.
Who Needs a Licence?
If an owner wishes to let their property for periods exceeding 31 days, this falls under the category of a long-term rental, and no specific licence is required.
If the property is rented out consecutively for periods of less than 31 days to tourists, you have to register the property in your corresponding town hall as accommodation for tourist use (or risk being liable to fines). This process is relatively straightforward, though must be done either in person by the owner or by an authorised representative.
How to Register for a Rental Licence
In order to obtain a H.U.T number (Habitatge d’ús turistic or Licence for Touristic Use), the owner (or a suitable representative) must present a “Cèdule d’habitabilitat” certificate, which specifies the number of occupants in the property. At this stage they must provide up to date contact details for a person who would be available to assist occupants of the property in an emergency situation, as well as a dedicated contact for any maintenance issues that may arise. There is a small administration fee and a municipal licence tax, both of which are variable from district to district. All applications are submitted to the “Direcció General de Turisme”, the governing body responsible for approving the application and designating a unique H.U.T number.
Once processed, owners are given access to an online platform, where they must register the contact information, passport number and duration of stay for all individuals renting the property. These details are automatically registered with local police.
Owners (or property managers) must collect a daily tourist tax from each guest over 16, payable to the Generalitat via self-assessment tax (this is currently set at €0.65 in Barcelona or €0.45 in wider Catalunya, and should be paid up to 7 days). This does not have to be collected personally from the tourist, and can be included in the overall rental fee.
The property itself must meet a series of requirements, determined by the local town hall, including (but not limited to) fixed air conditioning in each room (ie not a portable fan), a fixed heater in each room for rentals from October to April (again, this cannot be a portable unit), rooms must have adequate furniture and there must be a full cleaning service prior to each new rental.
Other rules state that official complaint sheets must be made available to any guests in residence, and that the licence registry number and emergency contact must be clearly visible and available at all times. A first aid kit and fire extinguisher must also be available.
Any agency marketing and managing short-term rental properties must comply with local regulations requiring a series of permits, guarantees and comprehensive insurance. The properties that they let must also be inspected by a representative of the town hall.
Restrictions in Barcelona Old Town
It is important to note that Barcelona City council are currently no longer granting any further licences within the Gothic Quarter / Barrio Gótico / Ciutat Vella districts, so purchasing a property which has already been awarded a licence, or buying a licence from someone who already has one, is the only option for those looking to establish a short-term rental business in the city’s old town.
Although we endeavour to always offer the most up to date information on Spain’s property market, regulations and the buying process, we advise always seeking professional advice from both a lawyer and a local tax adviser.
Read the full 2012 tourist rental laws on the official Generalitat de Catalunya website (in Catalan) here.