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V3418-20 25 November 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Holiday rentals without additional services are VAT exempt and taxed as income from real estate assets

A property owner sought clarification regarding the taxation of a holiday rental provided without additional services. The DGT has ruled that such leases are exempt from VAT if intended for residential use, and the income is taxed as income from real estate assets under Personal Income Tax (IRPF).

The question raised

Information is requested regarding how the aforementioned operation is taxed under Personal Income Tax, specifically concerning the possibility of deducting the mortgage loan for its purchase and the expenses for utilities, insurance, and local taxes. It is also requested to know whether Form 130 must be filed and how it should be taxed under Value Added Tax.

The DGT's ruling

The lease of housing for vacation use without hospitality services is exempt from VAT if the lessee is a natural person and intends it for residential use. For Personal Income Tax purposes, this income constitutes income from real estate capital, allowing for the deduction of financing interest, utilities, insurance, and depreciation in proportion to the rental days. It is not necessary to file Form 130.

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