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 essential to note that these earnings must be correctly 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 guide to Taxation of tourist dwellings.

• Know your tax obligations

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

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

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 essential 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, as long as 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 the Tax Office

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

• Keep accurate records

It is essential to keep accurate records of your income and expenses related to Airbnb rentals. Keep all receipts, invoices, and bank statements to support your declarations. In addition, Airbnb provides a tool called 'Income Summary' that you can use to obtain a monthly summary of your earnings on the platform.

• Calculate your income and expenses

Before submitting 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 that you could deduct include maintenance expenses, public services, supplies, Airbnb fees, insurance, and other expenses related to the management of your property.

• Include your income in the income tax return

When the time comes to submit your income tax return, you must include your Airbnb income in the corresponding section. Use model 100, which is the official form for personal income tax returns. Make sure to clearly indicate that this income corresponds to real estate capital gains.

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

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

• Tax benefits and deductions

It is essential to note that there are some tax benefits and deductions available to property 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 renting out the property, known as the "Housing Rental Reduction".

• Pay the corresponding taxes

Once you have submitted your income tax return and calculated the corresponding taxes, it is essential to ensure that you pay the taxes owed on time. In Spain, real estate capital gains are subject to Personal 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 Airbnb income in your annual income tax return and pay the corresponding taxes according to the tax scale established by the Tax Agency. The exact amount to be paid will depend on your total income and other factors such as applicable deductions and tax benefits.

In the case of non-resident owners, you will also have to submit a tax return and pay the corresponding taxes on the NRIT. 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 a tax advisor to ensure that you comply 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 bear in mind that tax regulations may vary from country to country, so it is advisable to consult 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. Public services expenses: Payments made for services such as water, electricity, gas, heating, telephone, Internet, and other basic services may 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, the mortgage interest paid could be considered deductible. It is essential to bear in mind that tax regulations may vary regarding deductible interest, so it is necessary to consult the specific regulations in your country.
4. Insurance: Payments made for home insurance, civil liability, and any other insurance related to the rented property could be considered deductible.
5. Municipal taxes: Local taxes, such as Property Tax (IBI) or Waste Tax, for which the owner is responsible, 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 vacation rentals, such as professional photography, brochure design, online advertising, could be considered deductible.
8. Cleaning and laundry expenses: Expenses for cleaning and laundry services related to vacation rentals 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 fiscal year of the declaration.

If your expenses exceed this amount, you will be able to deduct the excess over the next four years, as long as the total amount of deductions does not exceed the amount of income corresponding to each year.

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It is important to note that failure to comply with your tax obligations may result in 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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