The Treasury has already announced that it will closely monitor the correct statement of rental income. In this chapter, it will pay special attention to holiday homes, i.e. to the taxation of apartments on the beach, rural houses or flats that are rented to tourists on a seasonal basis. Its inclusion in the Income Tax Return has several points of interest that it is necessary to know in order to do it correctly.
In this note we will deal with the most common case: a private individual or couple of owners of a second home who rent for a few days, weeks or months without this meaning any professional activity in the field of hospitality.
This case includes the classic apartment rental on the beach, in the mountains, housing in the city, rural house, etc … from private to private.
The first thing to bear in mind when declaring is that two clearly differentiated periods must be declared in the same fiscal year:
The period during which the dwelling is rented (full income will be declared and the necessary expenses for renting can be deducted but only in proportion to the days rented).
The time that the house is free and at the disposal of the owners (it will suppose a rent imputed by the Treasury for owning a second house).
The first thing we need to know is that both must be declared.
How do I declare the days on which I rent my home?
It is very important to clarify that these leases do not apply all the advantages of renting for habitual residence and that complying with the Treasury does not exempt you from complying with the regulations of the Autonomous Community, which governs the requirements necessary to rent a house for vacation purposes after the recent change in the law. It is necessary to know that each Autonomous Community has its own regulations for renting a house and it is advisable to know them before renting a holiday home in order not to face possible sanctions.
Once we know that we are going to deal with the taxation of holiday homes without hotel services, we must know that the days on which the housing is rented should appear in the Income Statement as “returns on real estate capital.
The net return to be taxed will be the result of subtracting from the total income the expenses necessary to obtain them. Specifically, you can subtract the IBI, the mortgage interest, the rubbish rate, insurances that cover the risks of the house, community expenses, expenses made to achieve the rent such as that of mediating agencies or advertisements, amortization of the property or of the belongings in it as long as they respond to an effective depreciation and even the expenses of electricity, water, gas, etc.
But watch out, not all the expenses can be imputed in their totality but only in the proportional part to the time in which the property has been rented. In other words, if the property has been rented for a quarter of the year (3 months), we will have to divide all these expenses by four. If it has been 30 days in total, then we can deduct the twelfth part of the expenses and so on depending on the period rented.
There is an exclusion at this point and are the costs of an intermediary agency or advertisements made to achieve the rental, which would be deductible in full.
Let’s see an example of the calculation of the net yield of a holiday rental property rented on the beach for 1,000 euros per month during the three summer months. The house had an acquisition cost of 120,000 euros, discounting the value of the land.
The above example is basic and could be added to it other duly justified expenses that are directly related to the rent that is declared, for example if the services of electricity, water and gas, are included in the rental price and therefore paid by the lessor, would also be deductible, or the legal costs of advice and drafting the contract, or some specific expense duly justified as the completion of a trip to sign the contract and make delivery of the keys.
Be careful with amortization because it is a point that is often forgotten but that means a significant savings. Amortization is considered to meet the effectiveness requirement when, each year, does not exceed the result of applying 3% on the basis of amortization which is the greater value of the following two: the acquisition cost or cadastral value.
It should be borne in mind that the deduction of interest and other financing costs as well as repair and maintenance costs is limited, as a maximum, to the amount of the full income obtained by the transfer of each property or right (amount of the lease), and the excess that cannot be deducted one year may be deducted in the following 4 years.