If you have been thinking about investing in property, the Spanish buy to let market has become a hugely profitable place to buy in recent years. Holiday homeowners can make a good income from renting out their Spanish properties – Spain had 71.6 million international tourists visit last year and they all needed somewhere to stay!
As with any investment, there is plenty to consider before taking the leap of becoming a landlord in Spain. Here are 5 things to consider before buying a holiday let in Spain…
Location
The most important thing to consider when you start your Spanish property search is the location. If you want your property to appeal to tourists and achieve a good rental income you need to make sure that you are close to amenities such as supermarkets, bars and restaurants, as well as tourist attractions and places of interest. It’s also a good idea to be close to the airport, so towns in the South of the Costa Blanca are ideal locations since they are approximately a 30-minute drive from Alicante-Elche Airport.
Tourist license
The tourist license in Spain is compulsory for homeowners who want to rent out their property for short term or long term rentals.
The requirements vary per region, so it’s important to speak with the team at Benigest on how to apply via us for a tourist license and what conditions you will need to meet.
Once registered your property will receive a license number and location code which you must use within all promotional advertising.
Some locations have restrictions on tourist licenses, so make sure you speak to the team at Benigest first before you begin your property search.
Community owners by laws
Properties within gated communities are often popular choices for holiday homes but by purchasing one of these properties you will become part of what is known as a ‘community of owners’. In March 2019 new laws were passed in Spain to allow communities of owners to ban or restrict holiday rentals. If you are looking at a property within a community, this is something you need to check as if the location allows a tourist licence the community may not. Benigest can find out this information for you.
Hiring a management company
There are many costs involved with owning a holiday rental, and one you cannot do without is a management company to look after the property for you. A management company will take care of cleaning between rentals, maintenance, key holding, and being the point of contact for tenants.
Landlord tax
As you would expect, landlords in Spain are subject to tax. If you are a Spanish resident the full rental income for the tax period must be declared on your yearly tax declaration. Non-residents must submit quarterly tax declarations.
The amount of tax you will be required to pay depends on your residency status and is applied in the same way as regular income you earn from employment.
- Tax rates for residents in Spain range from 19%.
- EEA non-residents in Spain will pay 19% on net rental income, i.e. after deducting the expenses.
- Non-EEA non-residents in Spain will pay 24% on the gross rental income, not allowing for the deduction of any expenses.
If you would like to know more about landlord tax, get in touch with Benigest´s Accountancy & Taxation team.
As you can see there is a lot to consider before buying a holiday let in Spain, but with the help from the team at Benigest it is possible for it to be a good investment.
Ready to start your property search? Take a look at our list of properties here.
