Where taxpayers get caught out
Rental platforms share data with the Spanish tax agency, and the tax agency cross-checks it with owners' returns. Owners who declared nothing, or declared only part of the income, are being contacted with assessments covering several years.
The taxes on a holiday rental
| Tax | Who | How |
|---|---|---|
| Income tax on rent | Owner | Residents: annual IRPF; non-residents: quarterly modelo 210 |
| Tourist tax (ITS) | Collected from guests | Per person and night, varying by season and type |
| VAT | Only if hotel-type services are provided | 21% or 10% depending on the case |
| Local taxes | Owner | IBI and waste tax, sometimes higher for tourist use |
Income tax and deductible expenses
Residents include the rental result in their annual income tax return. Non-residents file quarterly: EU and EEA residents pay 19% on the net result, others 24% on the gross income. Deductible expenses include IBI, community fees, insurance, utilities paid by the owner, repairs, management fees, interest and depreciation, proportionally to rented days. See rental income tax for non-residents.
The tourist tax
The Balearic sustainable tourism tax is charged per guest and night and must be collected and paid to the Balearic tax agency. See the tourist tax in the Balearics.
Licences and legality
Paying tax does not make a rental legal: a holiday rental licence is required. Our lawyers at Castell check licences for buyers and owners.
An illustrative example
Based on situations we commonly see; not a specific client. A British couple let their villa near Pollença through two platforms and an agency, and had declared only the agency income. We reconstructed three years from platform statements, filed complementary returns with all deductible expenses before any notice, and set up quarterly filing going forward.
This page is published by Castell.tax, the tax practice of Castell.law in Palma de Mallorca. It is general information; tax rules and rates change, so check your case with us before filing.
Not sure what you owe? Ask before the deadline
Send us your situation or the letter you received. A tax adviser will tell you what applies, what it could cost and what to file.
Questions about holiday rental tax
Do platforms report my income to Hacienda?
Yes, platforms report rental income to the Spanish tax agency.
Can I deduct expenses as a UK resident?
No, non-EU non-residents pay 24% on gross income; EU and EEA residents can deduct.
Who pays the tourist tax?
It is charged to guests, but the owner or operator must collect and pay it.
Do I need a licence as well as paying tax?
Yes, holiday rental requires a valid licence regardless of tax.