Undeclared Apartment Renting fine announced

[Bongtrees]

From the news today,,,,,,,,,

The Spanish Conselleria for Tourism announced yesterday that it was intending to introduce a series of measures aimed at stopping the illegal renting of apartments, after discovering that almost 75% of all the rentals last season were made to undeclared apartments.

Under the measures that were made public yesterday, apartment owners who decide to rent their apartments without going through the correct legal registration procedures will be fined as much as 90,000 Euros.

It is currently believed that some 31,000 apartments are rented illegally each year, 19,000 of which are on the Costa Blanca.

[Alpujarra]

Can anyone tell me what one has to do in order to rent an apartment legally, apart from declaring the income tax?

Requirements and costs involved etc?

Thanks.

[Beachcomber]

You have to register the apartment with the tourist authority.

[Alpujarra]

Thanks Beachcomber.

[ashtondav]

How do you do that? Is there a website or address to get an application form? Is there anything more involved (regs etc?).

My lawyer has never mentioned any of this to me and i'll kill her if that has been negligence on her part.

[sunkissed]

I was always told if you rent out and declare all the income it is completely uneconomical to rent out as a holiday home fro non residents?

[Beachcomber]

You have to contact the tourist department of the Junta and they will give you a form to fill in.

If you are non-resident you have to pay 25% tax on the rental income on a monthly basis. As a non-resident you cannot claim running expenses against the tax. You pay the normal notional non-resident income tax on a pro-rata basis annually together with the patrimonio. You also have to pay VAT.

It is certainly true that it is not a viable proposition for non-resident to rent out an apartment.

It is easier for a resident because he just declares his rental income in his annual tax return and he is also able to claim various allowances.

[ashtondav]

It is certainly true that it is not a viable proposition for non-resident to rent out an apartment.

That's true if you view it has a business. If you view it as paying your costs and you have an apartment anyway its not.

I pay tax of 25% on all rent. In addition all my other costs come to 30% of the rent. I am therefore left with 45% of the revenue as profit. That more than pays my several airfares and many weeks of car hire.

Like i say, you're absolutely right in terms of a business proposition as the "net" profit is less than you'd get in a building society.

[Marina]

Beachcomber, what if you are a resident and not paying tax? Or what if the resident non taxpayer, jointly owns the rental property with a non resident?

[Beachcomber]

I'm no expert on resident taxes. I know how to make my own declaration through experience. Sid may be able to tell you exactly but this is my suggestion.

I always suggest that residents go to an asesor fiscal and make a tax return of some kind, even if it is a negative one, in order to enable them to obtain a certificate of fiscal domicile should they need one.

In your case it would also show that the proceeds from your apartment rental, when added to your other income, does not take you above the threshold at which you pay tax but you should bear in mind that your low income must be reflected in your lifestyle.

As far as joint ownership is concerned you would each declare your own portion of the income whether resident, non-resident or a mixture of both.

I reiterate that this is only my own interpretation on the situation.

[Marina]

Thank you Beachcomber.

[Nicks]

Can I sort out the tax issue without using a solicitor and from the UK? Is is just a case of getting the right forms and filling them out? Ditto with the forms from the tourist office? Anyone got any contact address/tel no/email to be able to do this?

[Nicks]

Anyone?

[ashtondav]

Hello

It would be nice to know the address of the local tourist office but i can't find it by googling. maybe one of the locals can help. I have asked my solicitor for advice and will ost if no one else does when i hear from her.

On the tax front the forms can be downloaded from Aeat.es. You need form 215 for rental income, and you declare it quarterly and for each person if the place is in joint names. There are a couple more for own use tax and wealth tax but these aren't due for a few months (June for 2006) so don't worry.

The problem is that you can't just fill in the form and send it to the tax office. You also need to stick pre-printed individualised bar code labels on the forms and insert them in special envelopes. To obtain sticky labels and envelopes you will need to go to your local tax office with your NIE certificates. Try as i might i can find no place for ordering them over the internet - especially for UK delivery.

For your first return i would use a solicitor. After that just get your labels and envelopes, download the forms, complete them copying what your solicitor did, and send them to your bank with an instruction to pay the amount owing. It takes me about 30 minutes each quarter

[Beachcomber]

Are you getting resident and non-resident status mixed up?

If you are declaring as a non-resident your own use tax and patrimonio is paid on form 214 but you declare the renta content pro rata to the number of days for which you are paying tax on actual income.

This can be done at any time during the year following that for which it is payable. As far as I am aware this is so whether you declare actual rental income or not.

The tourist office is administered by the Junta de Andalucía and the procedure has changed since I registered my apartment as have the telephone numbers but you could try 901 200020 or, failing that, 902 505505 which the main enquiries number.

As I have often said, if you are not going to do it yourself you should use an asesor fiscal rather than a lawyer.

You can order sticky labels on the internet but only for delivery to the address in which you are registered. Gestores and asesores fiscales have a special code which enables them to enter a private area of the AEAT web site and they can print out lables using their own computer.

[Nicks]

Thanks for this - thhis gives me a good idea of where to go with this!

[ashtondav]

The form for declaring rental income from 3rd parties is 215. This has to be completed by all non residents who receive rental income, whether from Spain, UK or wherever. This is completed and paid quarterly. Sliding scale surcharges apply for each late submission.

Form 210 is for own use (effectively)

Form 714 is for wealth tax.

Thanks for the telephone numbers.

[Beachcomber]

Yes, the 210 and 714 are for renta and patrimonio respectively and these must be submitted between the 1st May (although the AEAT web site says 1st January) and 30th June but only if you are resident or are non-resident with more than one property.

If you only have one property but you rent it out you pay the rental income on the 215 and (I am pretty certain but not 100%) your own use taxes on the 214 which can be submitted at any time during the year.