±JOIN OUR NEWSLETTER

Get useful expat articles, health and financial news, social media recommendations and more in your inbox each month - free!



We respect your privacy - we don't spam and you can unsubscribe at any time.

±Compare Expat Providers

Expat Health Insurance Quotes

Foreign Currency Exchange Quotes

International Moving Quotes

We're very social! Follow Expat Focus on Facebook, Twitter, Pinterest and Google+

Expat Focus Facebook PageExpat Focus on TwitterExpat Focus Pinterest PageExpat Focus Google+ Page

Notify me when new content is added about a country

±Expat Focus Partners

Property Letting

Spain - Property Letting


Many people choose to buy a property as an investment with the plan to move permanently into it upon retirement. Letting out the property in the meantime is a good way to create income enough to support the maintenance of the home. It is also a good idea as it means the home is not left standing empty for long periods.

Anyone who is buying a property for it to be rented out to holiday makers must be registered with the local tourism board (Consejeria de Turismo de la Comunidad Autonoma) if it will be let out more than once a year. Each region has different requirements and arrangements can be made by contacting the tourism board local to the area where the property is located.

However, there are several things you can do as a landlord for both your own and your tenant’s peace of mind, and these are standard requirements throughout Spain. A written agreement should always be in place between tenant and landlord. If you wish to you can have a formal agreement drawn up by a notary or solicitor, but the agreement should be signed by both parties to show that any terms and conditions set out in the contract are understood and will be adhered to. Those terms and conditions should include who is responsible for utility bills on the property, when and how rent should be paid, for example on the 1st of the month to be collected in cash, or to be paid into a bank account. It should also state who would be responsible for damage to the property. As a general rule of thumb the landlord will be responsible for general maintenance of the home and any damage caused by reasonable wear and tear. All other damages either caused by the tenant or friends of the tenant visiting the property will be the responsibility of the tenant. A full inventory of items in the property (if it is being let fully furnished) should also be included.

A credit check of the potential tenant is also a good idea if this is possible to do so. It is not unreasonable to ask the tenant to provide references from other landlords they have rented form also. You will be renting your home to a complete stranger and you need to ensure that you are covered for any potential none payment of rent. Someone with checkable references or a good credit rating is less likely to default on the monthly payment.

The Urban Leases Act of 1994 now regulates all urban properties to be let out in Spain. The act covers holiday and seasonal lettings as well as domestic and commercial lettings. There are several important items covered within the act and one of those is the early resolution of the contract with low penalties, another is the automatic extension of the lease duration. Any landlord with an urban property should have a copy of this act to ensure their agreement does not violate any laws as set out in it. There are also region specific rules including that for the Canary Islands. The rules state that anyone leasing a home as tourist accommodation should use a registered agent. The professional agent must hold an official licence. Any homeowner not complying with the rules will face very heavy fines.

Any rental income is subject to tax. This amount can vary between 25% and 35% depending on if the landlord is classed as a permanent resident of Spain or not. The tax is paid by the tenant, which may appear odd to those from other countries as this is not a standard practice. They deduct the tax from the rental payment before making it to the landlord. As a landlord you must insist on proof that the tenant is paying the tax, and ensure the amount being paid is correct. Non-residents pay 25% tax regardless of whether the property is being rented or not. Even if the property is not occupied an assumed amount of 2% of 20% of the property’s official value will be subject to tax. Those who are resident in the UK will need to pay income tax on any rental income paid for their Spanish property; however the Spanish taxes can be offset against this.

Finding a tenant is usually really easy particularly during the summer months. You need to decide if you want to rent long term, meaning all year round, seasonally meaning just for the tourist season (summer months) or as a holiday let meaning you would charge on a weekly basis. Once you have decided on the terms you can get the word around about your property just by telling people that you have one available. You can use the services of a property management company but there will be fees to be paid if you choose this option. Sometimes these fees can be high.


Read more about this country



Expat Health Insurance Partners


Aetna

Our award-winning expatriate business provides health benefits to more than 650,000 members worldwide. In addition, we have helped develop world-class health systems for governments, corporations and providers around the world. We want to be the global leader in delivering world-class health solutions, making quality health care more accessible and empowering people to live healthier lives.

Aviva

Health is your number one priority. At Aviva we understand this, which is why we’re focused on helping you and your family access high quality healthcare at home or overseas. Our award winning medical insurance will help you get the treatment you need or simply provide guidance and advice wherever you are, 24/7.

Bupa Global

At Bupa we have been helping individuals and families live longer, healthier, happier lives for over 60 years. We are trusted by expats in 190 different countries and have links with healthcare organisations throughout the world. So whether you're moving abroad for a change of career or a change of scene, with our international private health insurance you will always be in safe hands.

Cigna

Cigna has worked in international health insurance for more than 30 years. Today, Cigna has over 71 million customer relationships around the world. Looking after them is an international workforce of 31,000 people, plus a network of over 1 million hospitals, physicians, clinics and health and wellness specialists worldwide, meaning you have easy access to treatment.