Hi, just found this site recently - great stuff!
I´m about to start renting a house for extra income. I´m already employed and pay my tax, social security. I guess I need to employ a gestor, right? Anyway I wanted to know what expenses can be offset against any income achieved...e.g. pool/garden maintenance, cleaning, breakages, linen etc. Can anyone help?
Thanks in advance
expenses allowable against tax
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Mountain Goat
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Wow - what a question, and welcome to LMH.
Lots more information would help - which country is property in? Where are you resident? Where do you work? Do you have a manager (gestor?)? Mortgage on your property?
All the items you've mentioned would normally be allowable against your rental income in most countries I would have thought.
MG
Lots more information would help - which country is property in? Where are you resident? Where do you work? Do you have a manager (gestor?)? Mortgage on your property?
All the items you've mentioned would normally be allowable against your rental income in most countries I would have thought.
MG
subject
Your question is very simple.
If you are a non Spanish resident, you are not allowed any expenses to write off against your Income.
If however if you are a Spanish resident all expenses that you mentioned are allowed.
This is an unfair distinction buy the Spaniards another way to milk non Spaniard. The Taxes, VAT on illegally built properties was not enough for them. Perhaps the Spanish Government with a million unsold properties will realise that by treating people equally and improving the working of their legal system there would be more investments into Spain.
In the past residents paid 18% capital gains Tax & non resident 35%. Spain was taken to EU & last year they equalised the rates.
If you are a non Spanish resident, you are not allowed any expenses to write off against your Income.
If however if you are a Spanish resident all expenses that you mentioned are allowed.
This is an unfair distinction buy the Spaniards another way to milk non Spaniard. The Taxes, VAT on illegally built properties was not enough for them. Perhaps the Spanish Government with a million unsold properties will realise that by treating people equally and improving the working of their legal system there would be more investments into Spain.
In the past residents paid 18% capital gains Tax & non resident 35%. Spain was taken to EU & last year they equalised the rates.
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Mountain Goat
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Camel, I don't understand:
If you are a non Spanish resident, you are not allowed any expenses to write off against your Income.
Maybe this is true with the Spanish authorities (not a clue, seems unlikely), but if one was resident in the UK, then there's loads of expenses to put against the income as far as the UK Inland Revenue are concerned, and that income has to be declared.
MG
If you are a non Spanish resident, you are not allowed any expenses to write off against your Income.
Maybe this is true with the Spanish authorities (not a clue, seems unlikely), but if one was resident in the UK, then there's loads of expenses to put against the income as far as the UK Inland Revenue are concerned, and that income has to be declared.
MG
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Ben McNevis
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I think you're right, Goat.
There's a flat 25% income tax for non-residents and no expenses can be allowed against it. However, if you're a tax payer in a country such as UK which has a double-taxation agreement with Spain, then you simply declare on your tax return the income tax you have paid in spain and that is deducted from your tax due in the UK. On your UK tax return, you declare both income and expenses according to the UK tax rules, so the net effect is that you pay tax according to the UK tax rules, even though some of that is paid to the Spanish hacienda instead of HMRC.
As I have mentioned a few times on here, it rather depends which part of Spain too. In the canaries, you can't declare any rental income from a holiday property unless the property is managed by a company authorised by the tourism ministry. So, private lets are outlawed (theoretically - not in practice) and no tax can be paid! The words "foot", "in", "shooting" and "yourself" come to mind.
There's a flat 25% income tax for non-residents and no expenses can be allowed against it. However, if you're a tax payer in a country such as UK which has a double-taxation agreement with Spain, then you simply declare on your tax return the income tax you have paid in spain and that is deducted from your tax due in the UK. On your UK tax return, you declare both income and expenses according to the UK tax rules, so the net effect is that you pay tax according to the UK tax rules, even though some of that is paid to the Spanish hacienda instead of HMRC.
As I have mentioned a few times on here, it rather depends which part of Spain too. In the canaries, you can't declare any rental income from a holiday property unless the property is managed by a company authorised by the tourism ministry. So, private lets are outlawed (theoretically - not in practice) and no tax can be paid! The words "foot", "in", "shooting" and "yourself" come to mind.
Cheers, Ben
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subject
"If you are a non Spanish resident, you are not allowed any expenses to write off against your Income."
YES.
Ben, posted
"There's a flat 25% income tax for non-residents and no expenses can be allowed against it.
AGREE
However, if you're a tax payer in a country such as UK which has a double-taxation agreement with Spain, then you simply declare on your tax return the income tax you have paid in spain and that is deducted from your tax due in the UK.
ONLY ALLOWED TO DEDUCTED, IF YOU HAVE INCOME FROM PROPERTY RENTALS IN UK, EITHER AS NORMAL LETTING OR HOLIDAY LETTING. YOU WILL NOT BE ALLOWED TO OFFSET AGAINST YOUR PAYE OR SELF EMPLOYED TAX BILL. AS MOST RENTAL INCOME DO NOT GENERATE SURPLUS, THE 25%TAX DEDUCTED IN SPAIN WILL NOT BE REFUNDED.
On your UK tax return, you declare both income and expenses according to the UK tax rules, so the net effect is that you pay tax according to the UK tax rules,
WHERE THERE IS NO SURPLUS OF INCOME I.E. NO TAX TO PAY IN UK, THE 25% PAID IN SPAIN WILL NOT BE REFUNDED.
even though some of that is paid to the Spanish hacienda instead of HMRC."
YES.
Ben, posted
"There's a flat 25% income tax for non-residents and no expenses can be allowed against it.
AGREE
However, if you're a tax payer in a country such as UK which has a double-taxation agreement with Spain, then you simply declare on your tax return the income tax you have paid in spain and that is deducted from your tax due in the UK.
ONLY ALLOWED TO DEDUCTED, IF YOU HAVE INCOME FROM PROPERTY RENTALS IN UK, EITHER AS NORMAL LETTING OR HOLIDAY LETTING. YOU WILL NOT BE ALLOWED TO OFFSET AGAINST YOUR PAYE OR SELF EMPLOYED TAX BILL. AS MOST RENTAL INCOME DO NOT GENERATE SURPLUS, THE 25%TAX DEDUCTED IN SPAIN WILL NOT BE REFUNDED.
On your UK tax return, you declare both income and expenses according to the UK tax rules, so the net effect is that you pay tax according to the UK tax rules,
WHERE THERE IS NO SURPLUS OF INCOME I.E. NO TAX TO PAY IN UK, THE 25% PAID IN SPAIN WILL NOT BE REFUNDED.
even though some of that is paid to the Spanish hacienda instead of HMRC."