Do you have a property on Airbnb or Booking and have you been wondering how to declare that income? You are not alone.
The regulations for holiday rental properties are not difficult to understand. The problem is that a great deal of contradictory information is circulating online:
- Whether you need to register as self-employed
- Whether or not VAT applies
- Whether the same deductions apply as for a long-term residential rental…
We therefore thought a concise guide would help you understand the framework governing holiday rental taxation in Spain:
- How it is classified for tax purposes,and when that classification changes
- Which expenses you can deduct and how depreciation is calculated
- Which tax forms must be filed and when
- What happens if you are not tax-resident in Spain
Therefore, if you are looking for information about Spanish personal income tax on holiday rentals, you will find it here. If you are still considering letting your property, we recommend first reviewing the pros and cons of holiday letting.
How is holiday rental income taxed under Spanish personal income tax?¿Cómo tributa el alquiler vacacional en el IRPF?
Most owners who let their property on a short-term basis through platforms such as Airbnb or Booking must declare that income for Spanish personal income tax. So far, so clear.
What causes confusion is how it must be declared, as the treatment is not always the same.
Income from property: the most common case
If you are an individual resident in Spain and let your holiday rental without providing additional services beyond the basics, the income is declared as income from property on Form 100, within the general taxable base.
What is meant by basic services?
- Cleaning at the beginning and end of the stay
- Changing bed linen at those same times
- Maintenance of communal areas
- Occasional minor repairs…
These are standard services in any tourist flat and do not change its tax classification.
When it becomes an economic activity
Holiday letting is treated as income from an economic activity when the two specific conditions in Article 27.2 of the Spanish Personal Income Tax Act are met:
- At least one person is employed full-time to manage the activity
- Hotel-industry services are provided.
What are hotel-type services?
- A reception or concierge service available 24 hours a day
- Regular cleaning during the stay,not only at check-in and check-out
- Catering or breakfast service
- Regular changes of bed linen during the stay…
If your management does not include any of these services, which is the usual situation, there is no reason to declare it as an economic activity.
Important: hiring a management company does not turn your activity into an economic activity. The determining factor is whether you have your own full-time employee dedicated to it, not whether you delegate to third parties.
Deductible holiday rental expenses
Income from property allows you to deduct all expenses necessary to earn that income, subject to certain rules that we will now examine:
What you can deduct
→ Interest on a mortgage or loans linked to the property. If the property is financed, the interest is deductible.
→ IBI property tax, waste collection charges and other local taxes. All municipal taxes and charges related to the property can be deducted from income.
→ Maintenance and repair expenses. Painting, plumbing, electrical work, replacing broken appliances and repairs in general. Improvements and extensions are not included.
→ Property insurance. Home insurance or public liability premiums linked to the property are deductible expenses.
→ Owners’ association expenses. Owners’ association fees are deductible.
→ Administration and management expenses. Airbnb or Booking commissions, management company fees and professional advisory costs are also deductible.
→ Legal defence. Legal fees related to the rental activity can also be deducted.
How to calculate property depreciation
The property can be depreciated at a maximum of 3% per year based on the higher of these two values:
- The purchase cost
- The cadastral value
In both cases, the value of the land is excluded.
Consider a specific example:
If you buy a flat for €200,000 and 20% of the cadastral value is allocated to the land, the depreciation base is €160,000. The maximum annual depreciation would therefore be €4,800.
You can deduct depreciation, but there is a limit: you cannot deduct more than the value of the building. If you later sell the property, the amount already deducted may increase the tax payable on the sale.
Apportionment by days let
This is another common source of confusion: days when the property is vacant generate no rental income, but they do not allow expenses to be deducted either.
Put simply, if the flat is let for 180 days a year, you only declare income and deduct expenses proportionately for those 180 days.
The owner’s tax obligations
The income tax return for a tourist flat
Net holiday rental income is included on the annual Form 100 under income from property,or economic activities, where applicable,and is declared in the general taxable base, not the savings base.
The tax year declared is always the previous year. Income earned in 2025 is therefore declared during the 2026 income tax campaign, approximately between April and June, and so on.
Bear in mind that holiday letting does not qualify for the well-known 60% reduction that applies to long-term residential rentals. We explain this in more detail below.
VAT on holiday rentals
Letting a property for tourist use is exempt from VAT when no accommodation services comparable to hotel services are provided. The owner does not charge VAT to the guest and does not have to keep VAT records or file quarterly returns.
However, if the activity includes hotel services, as mentioned above, the exemption is lost and VAT must be charged at 10%.
In that case, in addition to quarterly VAT returns, invoices must be issued and the corresponding records maintained.
IAE and Form 179
For the Spanish Tax on Economic Activities, tourist accommodation falls under heading 685, “Non-hotel tourist accommodation”. Individuals are exempt from paying IAE provided their net income does not exceed €1 million per year, which applies to practically all private owners.
Another obligation to bear in mind is Form 179, the information return on the transfer of use of properties for tourist purposes. The platform,Airbnb, Booking and others,submits this form to the Spanish Tax Agency with landlords’ details, so it is important to know that the authorities already have this information.
Special cases
If you are not tax-resident in Spain
If you own a flat in Spain but are tax-resident in another country, the tax treatment changes completely. The applicable regime is Non-Resident Income Tax, declared using Form 210.
The rate is fixed at 24% of gross income, with no possibility of deducting expenses, unless you are resident in another EU or EEA country, in which case the deductions permitted under Spanish law may be applied.
The 60% reduction and why it does not apply
Many owners confuse holiday letting with long-term residential letting and expect to apply the 60% reduction to net income. This is not possible.
The reduction provided for in Article 23.2 of the Spanish Personal Income Tax Act applies exclusively where the letting meets the tenant’s need for permanent housing. A weekend stay or a two-week summer stay does not meet that requirement.
If you let through a company
If the owner is a legal entity,a company,the rental income is subject to Corporation Tax rather than personal income tax.
This is a different regime with its own deduction rules and tax rates. It falls outside the scope of this guide, but we can discuss it with you in person or by telephone if you wish.
So, we would now like to ask:
Do you have questions about declaring your holiday rental income?
Home2Book provides comprehensive management for the owners of more than 600 holiday rental properties in Spain.
If you would like to delegate the management of your property and maximise your income without worrying about taxation, discover how we can help. Simply contact us by email or telephone and we will be delighted to assist you.
