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V2261-24 22 October 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · arrendamiento turístico

Tourist rentals without hotel services are VAT exempt and taxed as investment income

A query was raised regarding whether the tourist rental of two properties without hospitality services is subject to VAT and how it is taxed for Income Tax purposes. The DGT has determined that such rentals are exempt from VAT and the income is classified as income from immovable property.

The question raised

The issue concerns the possible liability for and, where applicable, exemption from Value Added Tax of said leases, and the classification of the income received for Personal Income Tax purposes.

The DGT's ruling

The leasing of housing for tourist use is exempt from VAT if the lessor does not provide complementary services typical of the hotel industry. For Personal Income Tax purposes, as no hotel services are provided and no person is employed under a full-time employment contract, the income is classified as income from real estate capital and not as economic activities.

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