Spanish Treasury focuses on tax evasion by non-resident rental owners

According to a recent article in Spanish newspaper El Día, foreigners who own a home in Spain and who are renting it for holiday use have to pay a tax.

Income tax


The Spanish Treasury – La Hacienda - has wanted to tackle the situation which they feel is beginning to get out of hand. Until now, for residents outside of Spain, it was very easy to avoid paying taxes for the homes they owned, and for which they were making a profit through vacation rentals.

This is now coming under scrutiny, as indicated by the professional sector of non-resident counselling (Oremfi by Aserpro, Spanish non-resident tax), the Treasury has implemented different mechanisms, such as the inspection of the electricity consumption of homes, in order to detect the non-payment of the tax.  

Additionally, holiday rental platforms are now legally obligated to provide details of all properties and owners that offer their properties for holiday rentals.

Violators face significant penalties, as well as the possibility of the seizure of their bank accounts.

Hacienda puts the holiday rental industry in its crosshair

Hacienda knows that many owners who rent out their property in Spain are not paying taxes on the income, especially if they are paid directly into an overseas bank account. For this reason, they have set up a more detailed follow-up, for which they come to cross data on the consumption of electricity in homes, in order to be able to find those second homes that are being rented. Non-residents are not being targeted specifically, but it is about following up the holiday rental homes owned by both residents and non-residents.

In January 2018, the Treasury launched a tool called Common Reporting Standard (CRS) to reduce tax evasion, in which more than 100 countries participate. Countries that use this tool can cross reference fiscal data more easily. From now on, if a foreigner receives income from a rental of a property of his in Spain, he will have to pay his taxes in Spain based on the agreements reached in this agreement of the CRS.

Fines and Penalties

All property owners who are obtaining an economic return for the vacation rental of their home, and who do not declare that income, penalties and important fines are expected in case the Treasury detects it.

In addition, fines are expected to be high due to the exemplary nature that the Treasury wants to show in these situations.