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Renting out your own home in Spain

If you have a property in the south of Spain that you don't live in all year round, there is a great opportunity to earn extra money by renting out your property. As well as making another family happy to live in your beautiful Spanish home, you don't have to worry about your property being empty when you're not there.

However before you start looking for properties for sale on the Costa del Sol, there are several things you need to be aware of.

First and foremost, there are tax issues, but also all the administrative aspects of renting out your property. You can read more about the costs of owning a home in the south of Spain here.

Finally, you need to prepare yourself mentally for the fact that there will be strangers living in your home. Here you also need to take care of your insurance and give them a beautiful and clean experience in your home. And you need to avoid the thought that something might go wrong.

We want to help you with the most necessary steps when renting out your home for the first time. It's not nearly as difficult as you might think.

Registering your property and important things to remember

When renting out your property short term, it is important that it is registered with your local tourist office. In the past, there were several restrictions that made it difficult for homeowners to register their property for rental.

Now, thankfully, it's much easier, which is reflected in the number of people who choose to rent out their property.

However, there are a few requirements that the property must meet. The kitchen must have all the necessary utensils. This means a working oven, a fridge, a hotplate, a kettle, various utensils and not least cups, plates and cutlery.

In addition, clean bed linen and towels should be ready for guests when they arrive. Also make sure you have an instruction manual for all electronic equipment in your home. There's no guarantee that others will know how your state-of-the-art TV works or how to turn on the air conditioner.

It is very important to have a first aid kit and a fire extinguisher in the house. This is for obvious safety reasons. You never know if something might catch fire. It could be anything from a drought to forgetting to turn off a light.

That's why it's so important to have a fire extinguisher in the house. At the same time, it's also essential to have a first aid kit in case you get hurt. It's important to make sure your first aid kit is always up to date when you return to your home.

Your home should also have natural lighting in all bedrooms, proper ventilation and you should make sure you know if there are stairs and/or a lift. It's important for your customers to know if it's handicapped or elderly friendly.

Air condition, or similar, with cold and hot air is also a requirement in all bedrooms and in the living room.

Remember to ask for permission first

Your holiday home must have a permit for renting out, which you can get from the local council office. There should also be clear contact details for you, so that your tenants can always get hold of you in case of complications.

There should also be a compulsory complaints book in your home so that your tenants can write down what they have been unhappy about.

Once your holiday home meets the above requirements, you can get permission to rent it out.

Initially, you will be given a temporary registration number. With this number, you can now rent out your property on various websites and in newspapers.

Nowadays, most people find their holiday accommodation online, so it's a good idea to advertise your accommodation mainly there. Remember to keep the temporary registration number visible until you get the official registration number.

It is compulsory to register your accommodation if you are not renting for a long period of time with the same tenant.

These rules are those that apply to public housing landlords, and other types of holiday accommodation have several different and stricter requirements for the housing landlord.

If you have bought a property on Costa del Sol and need help with the permits, our real estate agents will be happy to guide you further in the process.

Insurance

When renting out your property, we recommend that you get good housing insurance.

You never know if your tenants will break something, and it would be a shame to be left with the bill. At the same time, you can't know if your home will be robbed. Fortunately, this is rare, but it's always good to be prepared.

In Spain, most home insurance costs between €200 and €1500 a year.

It is also important to make good agreements with your neighbors. Make sure they have a key so they can lock themselves in if they see anything suspicious.

It's also a good idea for them to have a key in case your tenants throw away the key you gave them. Then they can always be let in by the neighbor and borrow the neighbor’s key until they must go home.

When your tenants need to be registered

Any short accommodation must always register its guests with the Spanish Ministry of the Interior, also known as the Registro de Huéspedes.

If you rent your accommodation through an agency, they will usually take care of the registration, but if you rent privately, you must register yourself within 24 hours. Registration is usually done at the local police station.

A representative can also be sent if you are not in the country. At the police station, you will need to bring documents proving that this is your holiday home. These include your registration number, NIE number and residencia, if you have one.

At the police station you will be given a code which you can use on the Ministry of the Interior website.

With the code, you log on to the Home Office website, record the names of the adult guests, their passport numbers, the expiry date of their passports and, most importantly, how long they intend to stay in your accommodation.

The tax aspect

When you rent out your home, there is of course tax on the income you receive from renting out your property.

If you are resident in Spain, tax is paid on the profit you make from renting out your property. This is done through the Spanish tax return, which must be filed annually.

The tax is treated in the same way as general salary income, and you are taxed according to Spain's tax rules.

You report what you have earned to the Spanish tax authorities.

In the Spanish tax return, you can deduct water, landlord's fees, insurance and electricity, which your tenants can use.

The commission paid to the agency, if you have one, and not least the advertising, can also be deducted from your tax return.

If you are not resident in Spain, the tax is paid via a quarterly statement. However, you are still entitled to the same deductions as a person resident in Spain.

All rental income for non-residents is taxable, whether you rent out your property. However, tax can be deducted during periods when your property is rented out to non-residents.

At the end of December, non-residents must report their tax for the previous year, so in December 2023 you must report tax from December 2022. The whole process can seem advanced at first, especially when you don't necessarily know the language.

If you are unsure, you can always contact a lawyer who can help you through the whole process and translate for you.

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