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V1706-24 11 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Tourist rentals without hotel services taxed as income from real estate capital in Personal Income Tax

A taxpayer inquired about the taxation of income from an apartment used for tourism and the deductible expenses available. The Directorate General for Taxes (DGT) ruled that, as no hospitality services are provided and no staff are employed, the income is classified as income from real estate capital rather than income from economic activities.

The question raised

Question posed - For the purposes of Personal Income Tax, the taxation of income derived from leasing and the deductibility of incurred expenses such as cleaning, community fees, waste tax, home insurance, utilities, etc.

The DGT's ruling

Income from tourist rentals is considered real estate capital income if services typical of the hotel industry are not provided and no person is employed under a full-time employment contract. In this case, expenses necessary to obtain the income, such as interest, repairs, taxes, insurance, and utilities, are deductible. Regarding VAT, the leasing of housing for vacation use is exempt if it is intended exclusively for housing and no complementary hospitality services are provided. The acquisition of a building following rehabilitation is considered a first delivery and is taxed at the reduced rate of 10% if it is suitable for housing.

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