We tell you how the holiday rental in Fuerteventura is taxed: taxation in the IRPF and IGIC.
Tax issues always tend to be the ones that generate the most doubts and worries for the owners of holiday homes.
Fortunately, the Canary Islands offer certain tax advantages compared to other regions of Spain.
If you have a property in Fuerteventura that you wish to monetize by means of holiday rentals, you have to take into account that the income you receive from it will be subject to these two taxes:
- Personal Income Tax: Personal Income Tax
- IGIC: Canary Islands General Indirect Tax
Below we explain how you will have to pay each of these taxes and how much you will have to pay for each of them.
Taxation of holiday rentals in Fuerteventura in the IRPF (Personal Income Tax).
The IRPF is a tax that all citizens residing in Spain must present annually.
The income from the rental of a holiday home in Fuerteventura must be included in the IRPF, however, its classification will be different depending on the circumstances in which the rental takes place.
Income from real estate capital
The most common is to include the profits obtained from vacation rentals in the income from real estate capital.
This will be the case as long as no person is employed and no services are rendered that are considered to be those of the hotel industry.
Income from economic activities
On the other hand, if you employ at least one full-time employee (for example, at the reception desk) or offer services typical of the hotel industry (for example, leisure activities, meals…), the income received from the vacation rental of your property will be taxed as income from economic activities.
Neither the cleaning of the property upon arrival and departure of guests, nor the regular change of sheets and towels will be considered as services of the hotel industry in order to be taxed as income from economic activities.
Taxation of vacation rentals in Fuerteventura in the IGIC
However, in the Canary Islands VAT is replaced by IGIC ( Impuesto General Indirecto Canario), a tax that works practically the same as VAT, with the only difference that the amounts to be paid are much lower, namely 7%.
That is to say, a holiday rental in Fuerteventura will be taxed at 7%.
This will be the case regardless of whether or not they provide services considered as part of the hotel industry.
In addition, the Canary Islands have a great advantage over the rest of the Spanish regions, and that is that they do not apply a specific tourist tax on holiday accommodation.
Holiday homes in Fuerteventura will be taxed at 7% in the IGIC and, in addition, will not have to be taxed by any specific tourist tax.
What if I hire a vacation rental company?
At Destiny Home we offer short and long term rental services, maintenance and comprehensive administrative management of the properties. If you are going to rent a tourist property with Destiny Home or any other management company, you will need to sign a rental contract like this one in which the conditions of the agreement are established.
The terms and conditions under which the agreement will take place will be established in the lease contract.
If the owner complies with the conditions to benefit from the Special Regime for Small Entrepreneurs and Professionals (REPEP), the contract will specify that he will be in charge of the payment of the IGIC.
In addition, the company in charge of managing the vacation rental will be responsible for paying the IRPF to the Agencia Estatal de Administración Tributaria (AEAT), a 19% tax if the owner is resident or European.
How to bill guests
The company in charge of managing the vacation rental will be responsible for invoicing the guests directly.
At the end of each calendar month, the company will provide data on the total amount of reservations made and charged for the current month.
In this way, the owner will be able to prepare the invoice for this amount with the corresponding IGIC (7%).
*All these tax issues, as well as the rights and obligations of both the management company and the owner, are specified in detail in the Destiny Home Vacation Rental Contract Model.
If you have a property in Fuerteventura and you would like to start making it profitable through tourist rentals, do not hesitate to contact us. In addition to taking care of all the documentation and tax aspects to avoid problems with the tax authorities, we will also take care of its dissemination and marketing so that you can ensure maximum occupancy and thus maintain a regular extra income.
Questions and Answers about vacation rentals in Fuerteventura
Managing a vacation rental from afar involves considering aspects such as the management of reservations, arrivals and departures, legal regulations and the handling of any incidents that may arise. It is crucial to have a good organization and the support of a specialized agency to ensure an efficient and profitable management.
Pricing should be based on market demand and seasonality. Consider hiring a tourism management agency that can help you adjust prices dynamically to maximize occupancy and profitability.
It is essential to be aware of local laws and comply with all the necessary documentation to register your property as a legal tourist accommodation. Working with a local agency can make this process easier, as they can handle all the paperwork and ensure that you are in compliance with current regulations.
Having the support of a rental management agency can be very beneficial in handling incidents. They can take care of urgent problems, such as utility failures or damage caused by weather conditions, ensuring that your property is always ready to receive guests.
