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The Spanish Tax Office is focusing on the owners of rental properties during 2015. How do they do it? They have collected the information contained on advertisements on different specialized web pages to check with the returns and see if the rental income is declared or not on the Annual Income Tax Return.

With the new system prepared for the Campaign of Income Tax 2015, some people will receive a message on the “Información Fiscal” which will say: “According to data in the Tax Agency’s power, you have placed property rental ads in various media, including the internet”.

This is to encourage people to declare any Rental Income as well as Pensions paid from other countries and Income produce by Assets overseas. (In part, the Overseas Asset Declaration –also called Modelo 720- is used to check all this undeclared income)

From 2012, Tax Office has other ways of checking those undeclared rental incomes as different utility companies (Electricity, Water and Telephone for example), have to report the consumption of all the properties. When a property is declared as empty but the consumption is regular during the whole year, an alarm sounds in the Tax Office and the investigation will not last to start.

Around 49% of rental income in Spain was not declared in 2008 but this percentage is being reduced every year thanks to the conscience of the owners. Government also implemented measures to reduce the taxation of rental incomes and, if a property is rented to be the main home of the tenant, only 40% of the profit will be taxed. The other 60% is tax free.

If you have any question about this or any other tax question please, do not hesitate to contact us on a comment below, sending an email to info@tacs4expats.es or calling into our office on (0034) 965 705 502.

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Hi! This is Manuel's Team at Tacs4Expats | Tax Advisors & Property Conveyancing Solicitors, can we help you with any tax or legal queries? Please let us know and we will get back to you as soon as possible!