Whether you purchased a property in Spain as an investment and always intended to rent it out or have just simply decided you don’t spend enough time there and could use some extra income, in this guide you will find some basic information all Spanish landlords need to know before renting out their home.
What do I need to include in the description of my property when advertising?
The first thing you should decide when renting out your property is if you are interested in long or short term rentals. Whilst long-term rentals will guarantee you a stable income, depending on where your home is located a holiday rental could result in much higher earnings. Bear in mind though that even though holiday rentals can seem like a great way to earn quick money, they do come with much more hassle and management. Also, holiday and short term rentals require a license but long-term lets do not. Always try to check that the area has nearby suppliers such as pharmacies, restaurants, supermarkets, beauty centers or hairdressers.
A typical advertisement for a property for rent in Spain will include the price per month, the size of the property in square meters, if the property is furnished or not and the legally required Energy Efficiency Certificate. Newer houses will generally have been built using the latest techniques and materials and therefore be more energy efficient, while older ones will be more costly to heat.
Long-term rentals
In Spain a rental agreement may be verbal or written. Both are valid however for obvious reasons it’s a good idea to have everything in writing for future reference, if needed.
Tenancy contracts typically will last 12 months, with option to renewal annually for three years. Here are a few other things you should know as a landlord in Spain:
- If you or a family member intends to occupy the property then you will need to give notice to the tenant at least 2 months in advance.
- To end the contract either party must give at least 30 days’ notice before the end date. If notice is given before the end of the initially agreed period, the equivalent of however many months’ rent is left to pay must be given to the landlord as compensation. However if a minimum of six months has passed then the tenant may simply give 30 days’ notice.
- Security deposits in Spain must be held by a third party. In Andalusia, the Junta de Andalusia requires you to register the lease contract and pay them the deposit to hold for you. The deposit will usually be the equivalent of one or two months’ rent.
- If the tenant fails to pay the rent by the seventh day of the month, the landlord has ground to commence legal proceedings.
- The landlord may increase the rent if improvements are made to the property, but only up to 20% overall.
Holiday Rentals
If you are looking to rent out your property short term to holiday-makers, then be sure to treat this as a serious business and invest in the necessary items to ensure the satisfaction of your guests. By doing this, you will have guaranteed success and can earn a very decent income if your property is in the right location.
As previously mentioned, you will need a license to offer your property as a holiday home. You can apply for this permit at the regional Tourism Registry by filling out a “declaration of responsibility” form and proving that the property contains basic installations such as air-con/heating systems, a First-Aid kit, furniture, a complaints book, electricity and running water and so on.
You will need to declare your holiday home every quarter using the 210 Form in the first 20 days of the month after every quarter. As for taxes, residents in Spain can declare this income as part of their annual tax return, whilst non-resident Europeans will have to pay foreign IRNR tax with a few deductions such as the property tax, home insurance, mortgage interests and so on. Are you a non-EU resident? Then you will be required to pay full IRNR tax with no deductions applicable.
2018 Spanish rent law changes
As of 2018 Spanish law now offers greater veto powers to homeowners with holiday rentals, and more protection to long-term tenants. The basic changes can be summarized as follows:
- No price cap, no matter the area. This is completely up to the landlord.
- Longer leases. The average lease will now last around 3 to 5 years.
- No more than two months’ of rent as a deposit is to be required, unless the contract lasts longer than 5 years.
- Owners of apartment buildings will now be able to decide through the Community of Owners Association in their building if they will allow one of the units to be used as a holiday home by calling a vote.
- Property owners will be exempt from paying Property Transfer tax and Stamp Duty if they register the tenancy contract properly.
If you are considering purchasing a home in Spain and need a lawyer, the Premier Law team would be happy to help. Please contact us at info@premierlaw.net or +34 952 764 483.
