Accounting and Tax Returns for Holiday Rental Owners in Spain

If you live in Spain and let a property to tourists without providing hotel-type services, what you earn is income from property, declared once a year in your income tax return. It becomes a business activity only if you provide services such as cleaning and linen changes during the stay, or employ someone full time to manage the lettings.

Two features set it apart from long-term letting:

• No rental reduction. The reduction for residential lettings applies only when the tenant makes the property a permanent home. Holiday income is taxed on the full net figure.
• Empty days count too. For the days the property was not let, a deemed income based on its cadastral value is added, and annual costs such as local property tax, community fees and insurance are deductible only in proportion to the days let.

Letting a dwelling is exempt from VAT. The exemption is lost when the owner provides services typical of the hotel trade during the stay. Cleaning before arrival and after departure does not count; cleaning and linen changes while the guests are there do. In that case the stay carries VAT at 10 % and quarterly returns are required. Letting the property to a company that operates it is different again: that rent carries VAT at 21 %.

There is a further point that catches owners out. Commissions charged by platforms established in another EU country arrive without VAT, and the owner is the one who has to account for it. That means a VAT identification for intra-Community operations and a return, even for an owner whose lettings are exempt.

Platforms report each host's income to the Spanish tax agency every year, with the owner's tax number and the property's cadastral reference. Since 2025, holiday lets advertised online also need a national rental registration number in addition to the regional tourist licence. A return that shows less than the platform reported is the quickest way to receive a letter.

What we do

• Read your platform statements and cost invoices, in whatever language they arrive.
• Apportion costs by nights let and calculate the deemed income for the rest of the year.
• Prepare the returns your case requires and send you a draft before filing.
• Keep a folder organised by year, quarter and tax.

The fee is €60 a month plus VAT per owner with one property, and €20 a month plus VAT for each further property. Set-up is €175, once.

If you own the property but do not live in Spain, the rules and the returns are different: see tax returns for non-resident landlords.

The line between a repair and an improvement is the one most often disputed. Replacing a broken boiler is a repair. Installing air conditioning where there was none is an improvement.

• The regional tourist registration, with its own conditions on equipment, minimum standards and, in many municipalities, zoning limits.
• The national rental registration number required since 2025 to advertise short lets online.
• Guest registration with the police for every stay.
• Tourist tax in the regions that charge it, collected from guests and paid over periodically.
• Community of owners rules. Since a 2025 reform, new tourist lets in a building generally need the express approval of the owners' association.

We do not handle licences, but they shape the tax position: income from a property let without the required registration is still taxable, and a registration cancelled mid-year changes what can be deducted.

• Declaring the net amount paid out by the platform as income, and then deducting the commission again.
• Deducting a full year of property tax and community fees for a flat let ninety days.
• Leaving out the deemed income for the empty months.
• Applying the reduction meant for permanent residential tenancies.
• Assuming VAT never applies, while the cleaner comes in twice a week during stays.
• Declaring everything in one spouse's name when the property is jointly owned.

Owners who moved to Spain after years of letting the property from abroad change regime in the year they become resident. Until then the income was declared on form 210, at a flat rate, sometimes with no expenses allowed. From then on it goes into the Spanish income tax return, at progressive rates, with expenses, alongside the rest of their worldwide income.

The year of the change needs care: which regime applies to the whole year, what happens to depreciation already taken, and whether property kept in the home country now has to be reported in Spain. If you are still non-resident, the right page is non-resident property owners.