Tax Obligations Touristic Apartments

Tax Obligations if you are planning to Rent your property for Touristic Purposes

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If you are planning to rent your property for Touristic Purposes, bear in mind this simple bit of advice which will save you the payment of the VAT tax.

According to a recent binding consultation with the General Tax Management Services last October, in the event that you, as a physical person, plan to rent out your property for touristic purposes, you must be aware that, by fulfilling a series of requirements, you will be able to avoid the payment of the VAT.

On the principle, the rental of touristic dwellings is subject to the VAT, with a payment of 10%, always when the actual rental includes services related to the hospitality industry, such as breakfast service, laundry, room cleaning, etc., as well as in the cases where they are used as offices or professional premises.

For this reason, in order to avoid paying the VAT, it is important to dedicate the rental exclusively to the purpose of housing and that no sub-rental be involved. Meaning that it may not be rented to juridical persons as this would entail that it is not dedicated to housing.

In this sense, the purpose of the rental is of crucial importance: the real dedication as housing with no services related to the hospitality industry given by the landlord. The General Tax Management Department does not consider as hospitality services the change of bed linen and towels, as well as the cleaning of the apartment as long as this is executed before and after the rental.

In these cases, the rental, although still subject to the VAT, will be exempt from payment, with a 0% tax rate, according to the regime of rental of usual dwelling, despite the use of an intermediary channel, such as internet platforms which will only charge the landlord a commission for the services rendered.

We recommend prior Tax Advice with the aim to plan the profitability of a real estate investment targeted to the touristic or temporary rental.

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