If you’re renting your property in Spain through platforms like Airbnb or Booking.com, you have to be aware of your tax obligations.
This comprehensive guide covers everything you need to know about IGIC and Modelo 210.
Understanding your tax obligations as a Host
Renting out your property to tourists places you under specific tax regulations in Spain. Key taxes applicable are:
- IGIC (Impuesto General Indirecto Canario) if your property is located in the Canary Islands.
- Modelo 210 (Non-resident Income Tax) if you do not reside permanently in Spain but generate income here such as renting a house.
IGIC for holiday rentals in the Canary Islands
If your rental property is in the Canary Islands, you must comply with the IGIC rules, which are distinct from mainland Spain’s VAT.
When must you register for IGIC?
- When you rent your house.
- You must submit Form 400 (“Alta Censal”), declaring your business activity to the Canary Islands Tax Agency.
How to declare and pay IGIC
- Submit quarterly IGIC returns (Modelo 420).
- Maintain accurate records of your rental income and expenses to facilitate quarterly reporting.
Modelo 210: Non-resident Income Tax
If you’re not permanently residing in Spain, the Modelo 210 applies directly to you.
When and how to file Modelo 210
- The return could be submitted on Annually basis
- Clearly report income and applicable deductible expenses.
Tax rate and deductions
- Non-EU residents: taxed at a flat rate of 24% on gross rental income (no deductions allowed).
- EU residents: taxed at 19%, with allowable expenses deductible (maintenance, utilities, community fees, agency commissions).
Steps to compliance: Getting started
Step 1: Census registration (alta censal)
- Submit Modelo 036 or 037 (for mainland Spain) or Modelo 400 for the Canary Islands.
- Essential for obtaining your tax identification number and starting your rental business legally.
Step 2: Quarterly tax submissions
- Stay timely with your quarterly submissions for IGIC (Modelo 420) and Modelo 210.
Step 3: Annual declarations
- Review and submit annual statements ensuring all income and expenses are accurately recorded.
Ready to simplify your rental tax compliance? Contact with IGIC tax advisor.
Contact VAT Green Tax Services now for a professional assessment tailored to your property rentals.
