How to declare Airbnb income in Spain in 2023

In recent years, Airbnb has become a popular platform for short-term rentals in Spain. Many owners have found a profitable way to earn additional income by renting out their properties through this platform. However, it is important to note that this income must be properly declared to the Spanish tax authorities. In this article, we will analyze how to declare Airbnb income in Spain in 2023. You can download the Tourist Housing Taxation guide.

• Understand your tax obligations

The first thing you should do is familiarize yourself with your tax obligations as a homeowner who rents out a property through Airbnb. In Spain, this income is considered real estate capital income and must be declared in your income tax return. This means you must include the income generated by renting out your property in the corresponding section of the declaration.

For several years now, Airbnb and other similar platforms have been required by law in Spain to share with the Tax Agency the tax data of accommodations and their owners advertised on these platforms, using the well-known Form 179.

Owners who offer accommodation services through Airbnb must register their property in group 685 of the Economic Activities Tax (IAE), which refers to "Extra-hotel tourist accommodations." This category includes businesses that, although not considered hotel establishments (which are in group 68 of the IAE, with the exception of group 685), provide lodging services.

It is important to note that, although IAE legislation does not specifically mention it, registering a property under this tax implies a change of use, from residential to tertiary. Therefore, while the property is registered in the IAE census, it cannot be used as a private residence.

However, it is good to know that if your Airbnb accommodation is open to the public for less than 8 months a year, the IAE fee is reduced to 70% of the original fee. This means you can save some money on taxes.

• Register with Hacienda

It is essential to register as a short-term rental property owner with the Spanish Tax Agency, known as Hacienda. You must apply for Form 036 or 037 to register in the census of entrepreneurs, professionals, and retainers. Through this registration, you will obtain a tax identification number (NIF) that you will need for your tax declarations.

• Maintain accurate records

It is essential to maintain accurate records of your income and expenses related to Airbnb rentals. Keep all receipts, invoices, and bank statements to support your declarations. Additionally, Airbnb provides a tool called "Earnings Summary" that you can use to get a monthly summary of your earnings on the platform.

• Calculate your income and expenses

Before filing your income tax return, you must calculate your net income. This involves subtracting deductible expenses from your gross income. In the case of Airbnb rentals, some expenses you could deduct include maintenance costs, utilities, supplies, Airbnb fees, insurance, and other expenses related to managing your property.

• Include your income in your tax return

When it's time to file your income tax return, you must include your Airbnb income in the corresponding section. Use Form 100, which is the official form for individual income tax declarations. Make sure to clearly indicate that this income corresponds to real estate capital income.

Hosts are obliged to declare their Airbnb income, except in cases where the taxpayer's capital gains during the fiscal year do not exceed €1,000.

Income generated from organizing Airbnb Experiences is classified as income from economic activities, and the fees charged must also include Value Added Tax (VAT), which you must remit to the Tax Agency within the established deadlines.

• Tax benefits and deductions

It is important to note that there are some tax benefits and deductions available for owners who rent out their properties in Spain. For example, if you meet certain requirements, you could benefit from a 60% reduction in the net income generated by residential rentals, known as the "Housing rental reduction."

• Pay the corresponding taxes

Once you have filed your income tax return and calculated the corresponding taxes, it is important to ensure you pay the taxes due on time. In Spain, real estate capital income is subject to Individual Income Tax (IRPF) and Non-Resident Income Tax (IRNR) in the case of non-resident owners.

If you are a tax resident in Spain, you must include your Airbnb income in your annual income tax return and pay the corresponding taxes according to the tax scale established by Hacienda. The exact amount to pay will depend on your total income and other factors such as applicable deductions and tax benefits.

In the case of non-resident owners, you must also file a tax return and pay the corresponding IRNR taxes. The applicable tax rate may vary depending on your country of tax residence and the double taxation treaty between Spain and your country of origin. It is advisable to consult with a tax advisor to ensure compliance with all tax obligations.

Deductible expenses in a vacation rental

In a vacation rental, there are several expenses that can be considered deductible for tax purposes. It is important to note that tax regulations may vary by country, so it is advisable to consult with a tax advisor or tax professional in your specific jurisdiction.

1. Maintenance and repair expenses: Expenses necessary to keep the property in good condition, such as structural repairs, plumbing, electricity, painting, among others, could be considered deductible.
2. Utility expenses: Payments made for services such as water, electricity, gas, heating, telephone, Internet, and other basic services can be considered deductible to the extent that they are directly related to the rented property.
3. Mortgage interest: If you have a mortgage on the property you are renting out, the mortgage interest paid could be considered deductible. It is important to note that tax regulations may vary in relation to deductible interest, so it is necessary to consult the specific regulations of your country.
4. Insurance: Payments made for home insurance, liability insurance, and any other insurance related to the rented property could be considered deductible.
5. Municipal taxes: Local taxes, such as Property Tax (IBI) or Garbage Tax, which are the responsibility of the owner, could be considered deductible.
6. Platform commissions: If you use a platform like Airbnb to manage your rentals, the commissions or service fees you pay to the platform could be considered deductible.
7. Advertising and promotion expenses: Expenses related to the promotion and advertising of the vacation rental, such as professional photographs, brochure design, online ads, could be considered deductible.
8. Cleaning and laundry expenses: Expenses for cleaning and laundry services related to the vacation rental could be considered deductible.

All the expenses mentioned above are deductible up to a certain limit, which corresponds to the amount of total income obtained in the tax year of the declaration.

If your expenses exceed this amount, you can deduct the surplus over the next four years, provided that the total amount of deductions does not exceed the amount of income corresponding to each year.

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It is important to emphasize that non-compliance with your tax obligations can lead to penalties and surcharges. Therefore, it is essential to be diligent and comply with all tax regulations established by the Spanish authorities. Remember that it is advisable to seek professional advice to ensure proper compliance with your tax obligations.

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