Income Tax on Spanish rentals

For topics that are specific to Spain, please go here.
User avatar
joddle
Posts: 766
Joined: Mon Feb 22, 2010 11:56 am
Location: Valencia

Income Tax on Spanish rentals

Post by joddle »

Hi good people. My mother is just about to present my income tax for Quarter4 2017 - she has to do so quarterly as she is a UK resident. However she finds she has a lot of tax to pay because although there was virtually no occupancy in the quarter she received quite a lot of rental payments, two in arrears from the Q3 and 2 in advance for early 2018. According to our Spanish accountant this means that virtually nothing was allowed against tax for the quarter.

As rentals are almost always paid in advance this is a problem which we experience regularly i.e. we get almost all of our Q3 rentals in Q2 but have virtually no occupancy in Q2 so have huge tax bills as we cannot offset the expenses; then in Q3 we have large occupancy and no income so have huge expenses which cannot be offset against any tax as there is then little or no income!

How do other manage this situation as I imagine many people will have the same types of issue? Is there a way of properly accounting for expenses for each rental without getting stung like this?
I don't profess to own anything here apart from my own opinion.
-Chris-
Posts: 12
Joined: Mon May 13, 2019 12:27 pm

Re: Income Tax on Spanish rentals

Post by -Chris- »

joddle wrote:Hi good people. My mother is just about to present my income tax for Quarter4 2017 - she has to do so quarterly as she is a UK resident. However she finds she has a lot of tax to pay because although there was virtually no occupancy in the quarter she received quite a lot of rental payments, two in arrears from the Q3 and 2 in advance for early 2018. According to our Spanish accountant this means that virtually nothing was allowed against tax for the quarter.

As rentals are almost always paid in advance this is a problem which we experience regularly i.e. we get almost all of our Q3 rentals in Q2 but have virtually no occupancy in Q2 so have huge tax bills as we cannot offset the expenses; then in Q3 we have large occupancy and no income so have huge expenses which cannot be offset against any tax as there is then little or no income!

How do other manage this situation as I imagine many people will have the same types of issue? Is there a way of properly accounting for expenses for each rental without getting stung like this?
Hi Joddle, fully aware this is from last year, but did you find an answer to your question please?
User avatar
joddle
Posts: 766
Joined: Mon Feb 22, 2010 11:56 am
Location: Valencia

Post by joddle »

I still don't have the full answer but I understand that the accountant can make an amendment over a four year period once all quarters have been submitted. Its not happened yet but I await with interest to see how this is going to work out. If true we should get a rebate but I'm not holding my breath at the moment.
I don't profess to own anything here apart from my own opinion.
-Chris-
Posts: 12
Joined: Mon May 13, 2019 12:27 pm

Post by -Chris- »

joddle wrote:I still don't have the full answer but I understand that the accountant can make an amendment over a four year period once all quarters have been submitted. Its not happened yet but I await with interest to see how this is going to work out. If true we should get a rebate but I'm not holding my breath at the moment.
Brilliant, please keep us posted.
Post Reply