The year begins and with it, a new obligation with the Spanish Tax Authorities. The new Form 179 for holiday lettings is here to stay and you should check whether or not you are bound to this newly released informative statement.
Companies or people who intermediate between the owner of a holiday rental home and a tenant who wishes to rent a house are obliged to inform about it for the first time. Pay attention because, if it is your case, you have until January 31 fill in Form 179.
What is a holiday rental property?
Spanish tax authorities consider the rental of a house for tourism purposes, the temporary use of a whole house or part of a furnished and well-equipped house, ready for immediate use and the objective of making profits.
The following cases are excluded from this concept:
- Long term rentals: habitable property whose primary purpose is to satisfy the permanent need for housing of the tenant.
- The tourist accommodations, which are governed by specific regulations. Therefore, hotels, accommodation in rural areas, hostels and tourist camps, among others.
*Only the housing for tourism purposes located in the Spanish territory should be included in Form 179.
Frequently asked questions about Form 179
At this point, there are three common questions about this tax obligation:
What happens if I rent a room for tourist use?
Well, you will not have to present the Model 179 and the intermediary, if any, will be obliged to do so.
If this figure does not exist and you are the one who is dedicated to the rental of the room, you will be obliged to declare the income obtained by the leasing activity but, in the Income Tax Return.
Am I obligated if I rent my vacation home?
No, because you would not act as an intermediary, you would be facing a lease contract between landlord and tenant. You would be excluded from Model 179.
But, be careful, that does not exempt you from the obligation to declare the income you have obtained in the Income Tax Return.
And what would happen if, without being the owner of the apartment and being under a lease contract, you decide to rent the house for tourism purposes?
In this case, you would not have to present the Form 179 either, since you would not be an intermediary. Once again, if there is a figure that connects you to the landlord and you, he would be the one obligated to this new obligation.
Who is considered an “intermediary”?
Form 179 must be completed by an intermediary who acts as a connection between the landlord (who has the possession of the home) and tenant (who will use it). They can be both individual and legal persons.
According to the Form 179 approved by RD 1070/2017 of 29 December, this new law obliges to the companies that intermediate to supply accommodation for tourist purposes such as Real Estates, Airbnb, Booking com, Homeaway to submit the Form 179.
On the other hand, owners who rent their houses in Spain are required to declare rental income through Form 100 or the Form 210 depending if the owner is a tax resident or not in Spain. In addition some autonomous communities in Spain require to register holiday lettings, such as the case of Andalusia.
Procedure and deadlines of Form 179
You have until January 31 to present Form 179 for the first time. And you will do it exceptionally, on an annual basis.
You must include the operations performed in each calendar quarter and submit it on the following dates:
First quarter: from April 1 to April 30
Second quarter: from July 1 to July 31
Third quarter: from October 1 to October 31
Fourth quarter: from January 1 to January 31
*The process to declare taxes on holiday lettings in Spain is electronic.
What information should be provided in the Model 179?
- Identification of the owner or owners of the property, or the holder of the right to lease the property and the people or entities renting the property.
- Identification of the property (full address) with a specification of the cadastral reference.
- The number of days in which the dwelling is rented for touristic purposes.
- Rental Incomes received by the owner of the property.
- Means of payment (transfer, credit or debit card or other means of payment) (optional).
Author: Rosana Tejada
Biographical Info: Rosana Tejada Crespo is a tax advisor holding a Master’s Degree in International Taxation. She specialises in companies and freelancers, tax regulations concerning foreign employees (Beckham Law), non-resident tax, inheritance tax and Spanish income tax. She is one of the founders of Tejada Solicitors which comprises a group of English speaking solicitors, economists and architects.
*The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.