We have already mentioned paying tax on your income, but just a quick clarification. At present, (summer 2018), anyone resident in an EU country pays tax on their rental income at 19% and anyone resident in a non-EU country pays at 24% in Spain. If you are a Spanish resident, then you would declare your income annually in your normal Spanish tax return and pay the tax at the same time as your other tax liabilities. If you are non-resident in Spain, then the rental income must be declared quarterly, and in the first two weeks following the close of each quarter. So, January to March must be declared in the first two weeks of April, and so on through the year. The tax is then payable immediately.
There are allowances that can be declared to reduce your tax liability, such as a percentage of your Community fees, a percentage of your Suma, certain cleaning and keyholding costs and we are also allowed some of the cost of the air conditioning service, insurances and professional fees, plus a few other sundry costs. Exactly how much is deducted will depend on how many days the property is rented out. Some of these costs have changed over the years so it is best to consult a professional to ensure you are claiming the correct expenses and therefore paying the correct tax. Our non-residents tax is reduced pro-rata by the number of days the property is rented.
You are also required to declare your rental income in your country of residence, which for us is the UK. This is declared annually from April each year. Now comes the tricky bit – both countries may want you to produce original receipts! We keep the receipts in the UK but can send scanned copies to Spain if required, and so far that has been ok. In the UK we can claim far more in the way of expenses against our rental income, so the net income from the rental declared in the UK is different from that declared in Spain! I pay someone to file my Spanish tax return quarterly and the cost is very reasonable. In the UK I have another business so have an accountant for that business and he checks over my booking keeping for the house rentals and then adds it onto our annual tax returns accordingly. Due to the dual tax agreement between Spain and the UK we rarely pay tax in the UK on the rental income, but we must still declare it.
Your keyholders are vital to a successful holiday rental. I can honestly say we have had good, not so good and excellent over the years. We even sacked one! But a professional company will take a pride in their work and we currently have both a professional and friendly keyholding company who make our guests feel very welcome. I view the keyholders as our partners in the business.
We do our best to ensure our guests are suitable for our community. Our target market is multi-generation families (grandparents, parents and children holidaying together) as this tends to mean the children of any age are always under adult supervision. Renters do sometimes flout the community rules – either because they haven’t read them or don’t think it matters, but we include a copy in the contract and display them on the back of the door, highlighting rules that are of particular relevance to them. All our neighbours have our telephone number and email address and have been asked to contact us directly if there are any problems. There have rarely been any issues over the years, but we have always acted promptly if told about anything. In fact, we are told when people on the community complain about holiday makers that they don’t mean our renters but the ‘other ones’! Neighbours have even become long-term friends with a couple of our guests! Returning guests are probably an owner’s greatest compliment and we are fortunate enough to have several who book from year to year or bi-annually, others have recommended our property to family and friends. The returning guests are a reflection of getting things ‘right’ and I must give credit to the keyholders as well for that.