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Letting in Spain

Published 05/05/2010

Letting in Spain

Letting in Spain: rules, regulations and guidance for those considering  letting  property in Spain

So, you’ve bought a house in Spain but you’re not quite ready to retire. In the meantime you might want to let it out. Lots of people are
letting in Spain and it’s a good way of making your property pay for its keep until you want to use it for yourself or sell it on.

In today’s climate with houses more difficult to sell, many people are choosing the letting option. It can give people thinking of moving into an area time to try it out first and gives them flexibility of location. But you might have some reservations about allowing strangers to live in  your home. These can be magnified when you’re not only unfamiliar with your tenants but the country and its laws too.

In this article we consider some of the main issues which potential landlords in Spain should consider when making the decision: to let or not to let.

The good news

There is good news for landlords who are
letting property in Spain.  Until now, there has been no allowance made for any services that you, as a landlord, might pay for. So, you would pay 24% tax on the total (gross) income from your Spanish rental, irrespective of how much you pay in community charges, electricity, water and council tax. 

This is changing. Now, when
letting in Spain  you can claim the same benefits as a resident and deduct these costs from the rental income. From now on the tax you’re charged is only on the profit you make. So when you declare your rental income for the last quarter there may well be a difference.

This isn’t the only change for the better. The Ley 19/2009, has increased landlords’ rights so that a
tenant in Spain can be removed from a property if they are in breach of contract or in case the landlord needs the house for himself or his children. However, it is important to note that the Courts are overloaded with work so prevention of problems is the best approach to take.

Preventing problems

The advice is common sense. Preparation and a little research can make all the difference to the success of your Spanish rental.

So you should:

make sure that you have an agreed rental contract with your tenant in Spain  from the beginning

find out as much as you can about them – where they work, what their contact details are, where they have lived before

make an inventory before the tenant moves in and attach this to your rental contract

at the end of the rental period, meet with your tenant in Spain if you can  to check that everything is OK and to collect the keys

Follow these precautions and it is likely that letting in Spain will be relatively trouble free and a bit more lucrative. However, there will always be some tenants who are more difficult than others – no matter how careful you are.

If it still goes wrong

If you are unlucky enough to have a tenant who has breached the contract you should denounce him/her at court. This will then start a process that could ultimately lead to the tenant being evicted. Not a fast or easy process but one that is now possible.

Also, if your situation changes and you decide that you or your children want to live in your property in Spain you can now ask your tenant to leave.

Tenants have rights too

You need to be aware that once a tenant is
renting your property in Spain you are not allowed to enter the premises without their permission. It’s also important to realise that if there is a difficulty with the terms of the rental contract you cannot change the locks or turn off the electricity or water.

But the good news is that it is faster and easier to remove a tenant if you need to. Hopefully that need will never arise.

Just a reminder…

If you are
letting Spanish property it is important that you pay tax on any rent you receive. This is separate from the Spanish council tax (IBI) that you must pay. As things stand at present, you need to declare your Spanish rental income every quarter on form 215:

1st Quarter: January to March - tax payable before 20th April

2nd Quarter: April to June - tax payable before 20th July

3rd Quarter: July to September - tax payable before 20th October

4th Quarter: September to December - tax payable before 20th January

The amount of tax you pay will be dependent upon your catastral – the value that your property has been given for tax purposes. Ábaco Asesores will be happy to help you make sure that you’re taxes are up-to-date and help you with your rental contract.


Marina Lorente

Marina Lorente

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