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RENTAL TAX and PRIVATE RENTALS
Owners should have received a letter from Sr Castro at WimPen explaining the rental tax situation. WimPen have now received new legal advice, and we can now confirm that the tax situation on rental income is as follows:
NON RESIDENTS OF SPAIN
Income from rentals is taxed at 24% but this only applies to owners who own more than two weeks. Given the majority of these are residents of the UK, this is regulated by paragraph IV of the Protocol to the Agreement between the Kingdom of Spain and the United Kingdom, which establishes that no income may be attributed by virtue of timeshare contracts, when the taxpayer owns 2 or less weeks in a calendar year.
Rentals should only be arranged through WimPen and owners arranging a private rental, which would breach Spanish Holiday rental law as Wimpen is the sole licenced rental authority, do so at their own risk and remain liable for tax on any income received if more than two weeks are owned.
For 2024, any tax due will be withheld by WimPen from income due to owners on rentals arranged by them.
RESIDENTS OF SPAIN
Who would be subject to personal income tax (Impuesto sobre la Renta de las Personas Físicas, IRPF), the exemption could be applied to the rental income, provided that it does not exceed 900 euros, which is the limit set out in Article 75.3 g) of the Personal Income Tax Regulations. This would only apply to residents in Spain, given that they are taxed by IRPF, and it is a provision that is regulated in the IRPF regulations. The tax rate is 19%
OUTRIGHT OWNERS (SOLE PROPERTY OWNERS)
The relevant amounts will be withheld, for residents or non-residents as the case may be
TAX DUE FOR EARLIER YEARS
For the years prior to 2024, we wait until we receive any request of information from the tax authority, or if an inspection is initiated when WimPen will plan our defence.
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