Holiday homes, tax issues

Summary of the correct way to tax for single-family homes with valid or provisional license registered in the Ministry of Tourism of the Balearic Government.

First, we must consider that the rent and sale of housing is in principle exempt from VAT. However, section “e'” of article 20.1.23ºb of the LIVA establishes that this exemption will not be effective in the case of leases of apartments or furnished homes when the lessor is obliged to provide any of the complementary services of the hotel industry, such as restaurant, cleaning, laundry or other similar. In these cases, the person who gives the house to the user has the obligation to issue VAT invoice, even if only one is the service provided.

The aspects to consider are the following:

  • -You must make the quarterly VAT declaration at 10%.
  • – You can deduct all direct expenses of the property such as: IBI, garbage, supplies, insurance, community expenses and real estate commission
  • -You must invoice the final customer with an IVA of 10%.
  • -The real estate or intermediary company charges its commission plus 21% VAT.
  • -The owner must not make model 130.
  • -The owner must declare the annual benefit in the section: Real estate capital yields of his annual income
    – It is not necessary to register in finance under the heading: Leases of business premises.

At Ripoll & Mateu Solicitors Mallorca we advise, defend and represent our clients at all levels. Our greatest asset is an infrastructure of professional leaders in each field of action, especially Real Estate and Tax and Tourism Law   as well as our international vocation and multilingual capacity.

Our team is committed to providing the best work processes to provide our customers with the best results, in a constant quest for professional excellence. We establish external collaboration when circumstances require and are firmly committed to transparency and honesty in our actions.


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