Your guide to renting out your home while you’re away
It’s a great way to supplement your income—but there are some rules and regulations you’ll need to keep in mind.
4 min read
Who doesn’t love a little extra money in the bank? Renting your home while you’re traveling is a great way to boost your bank balance, but there are some confusing laws and tax regulations you’ll have to understand first. In this guide, we’ll go over all the requirements for renting your house or flat, the kinds of taxes you’ll need to pay and when, and much more. Let’s get started!
How to legally rent out your home
Platforms like Airbnb and HomeAway have made it easy for individuals to sublet their homes for short periods of time. But while it might seem as easy as downloading an app and sending a few emails, there’s a lot more to it than that. The Spanish Tax Agency has a series of requirements you’ll have to follow in order to rent out your home legally. Any income you earn from your short-term rental is subject to tax, so that means everything needs to be recorded and reported. Failure to do so can result in fines ranging from €3,000 to €600,000. Even if you don’t get fined, you could still lose the right to rent your home out in the future, so it’s best to stick to the rules from the start.
Requirements for renting out tourist accommodation
So, what are some of these requirements? If you’re planning on renting your place as tourist accommodation, there are some specific laws that will apply. These laws will vary in each of Spain’s Autonomous Regions, or might even be under the specific jurisdiction of a town or city (like in Barcelona). Start by doing a quick internet search for your local rules, or heading to town hall to find out in person. For the most part, you will likely have to show the following:
Certificate of Habitability or First Occupancy License. This isa document used to prove that your home is in a suitable state to be lived in (including floorspace, layout, fittings, minimum height and more).
Registration on the tourist accommodation register. Listing your home on this register will give you an identification number that’s absolutely vital if you want to legally rent your home out during the holidays. To get this registration, you’ll have to make a statement agreeing to comply with current regulations.
Limits on rental period. There is a minimum and maximum number of days you can rent out your home. This requirement also varies considerably from one Autonomous Region to another, so we recommend that you inform yourself before deciding to rent out your house while you’re away.
Inform the property administrator and your HOA. When you’ve made sure your home meets all the requirements, you'll need to inform the property administrator and the homeowners' association. The HOA might decide to raise its rates for apartments used as tourist accommodation, so it’s a really good idea to maintain a good relationship with your neighbors and give them your contact number should any problems arise with your tenants.
For example, if you illegally offer your home for vacation rent in Andalusia, you’ll be committing a serious crime that could lead to a fine of between €2,000 and €18,000. Depending on the degree of violation, more serious fines range from €18,000 to €150,000. In general, these kinds of fines are levied for those who don’t allow tourist accommodation inspections to take place, present false documentation, or repeat offenses.
Taxes on vacation home rentals
As we mentioned before, the tax rules applicable to home rental depends on which Autonomous Region your home is in. The income generated during the rental period, minus the money you invested to obtain it, needs to be included in your tax return as “real estate capital income” in the general income tax section.If, for example, we take a vacation cottage with a market value of €75,000 that you rent out at €500 per month, you’ll need to calculate your net income by subtracting the deductible costs from the rent income. See the table below:
Taxes on Vacation Home Rentals in Spain
There are additional taxes in some regions, like Catalonia, where the owner also has to pay the “vacation home rate” or Tax on Stays in Tourist Accommodation Establishments (IEET). This cost varies according to the type of house and its location. While in Barcelona this tax can reach €2.25 per person per stay, in the rest of Catalonia it’s just €0.90.
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