What tax implications does the rental of holiday apartments abroad have?
October 11, 2023 | 40,00 EUR | answered by Petra Höfer
Dear tax advisor,
My name is Emma Jensen and I am planning to rent out my holiday apartment abroad. Since I am not familiar with the tax implications of rental and leasing, I have some questions on this topic.
Current situation: I own a holiday apartment in Spain that I would like to rent out to generate additional income. I have no prior experience with property rental and I am unsure of the tax obligations and consequences that may apply to me.
Current status: The holiday apartment is fully furnished and ready for rental. I have already contacted some potential tenants and now want to ensure that I comply with all tax regulations and avoid any unexpected costs.
My concerns: I am concerned that I may have to pay taxes in Spain and do not know how to correctly declare my rental income. Additionally, I am wondering if I have any tax obligations in Germany and how I should report my rental income in my tax return.
My question: Could you please explain to me the tax implications of renting out my holiday apartment in Spain as a German citizen? Do I have to pay taxes in Spain and Germany, and how do I calculate the amount of taxes? Are there any specific forms or documents that I need to fill out to correctly report my rental income? I would greatly appreciate a detailed consultation on this matter.
Thank you in advance.
Sincerely,
Emma Jensen
Dear Ms. Jensen,
Thank you for your inquiry regarding the tax implications of renting out your vacation home in Spain. I understand your concerns and uncertainties about this topic, as tax regulations regarding rental properties can often be complex and confusing.
As a German citizen looking to rent out a vacation home in Spain, you do have tax obligations in both Spain and Germany. In Spain, you must declare the income from renting out your vacation home. Taxation in Spain is based on worldwide income, meaning all income earned worldwide must be taxed in Spain.
To calculate the amount of taxes owed, you must offset the income from renting out your vacation home in Spain with the corresponding deductible expenses. Deductible expenses may include maintenance costs, insurance premiums, management fees, depreciation, and loan interest. The remaining amount after deducting expenses will then be taxed at the applicable tax rate.
In Germany, you must report the income from renting out your vacation home in your German tax return. It is important to note that there is a double taxation agreement between Germany and Spain to avoid double taxation. Generally, you can offset the taxes paid in Spain against your German taxes.
To properly declare your rental income, you will need to apply for a tax number in Spain and submit regular tax returns. In Germany, you must report the rental income in the Anlage V of your tax return.
It is advisable to seek advice from a local tax advisor in Spain to ensure that you are complying with all tax regulations. A local expert can also assist you with preparing your tax returns and calculating taxes.
I hope this information was helpful to you. If you have any further questions or require more detailed advice, please feel free to contact me.
Best regards,
Petra Höfer
