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Tricks of the trade used by the Spanish Treasury to ensure rental properties are legal
All rental property in Spain must be registered with the Tax Agency
For some people who move to Spain, buying and renting out properties to tenants is a good way to earn money in the long term. However, it is vital to secure a fully legal tenancy or it could end up costing you dearly in time, money and hassle.
All property leases in Spain, whether residential or commercial, must be declared by owners in their 2023 Income Statement, and any revenue generated has to be included in the Personal Income Tax (IRPF).
How does the Spanish tax agency monitor rental properties?
Treasury inspectors rely heavily on regional governments to keep track of deposits paid for rental homes, but the Tax Agency also requires landlords to submit a property’s energy efficiency certificate when a lease is signed, so the authorities can quickly flag owners that haven’t correctly paid their taxes.
In addition, the Treasury also analyses the aid granted for works to improve the energy efficiency of homes, together with the list of cadastral reference numbers to which they refer.
Also, inspectors can cross-check the electricity supply or water consumption in a supposedly empty house or apartment; if the utilities are being regularly used, this is clear evidence of an illegal lease.
But it doesn’t stop there. One of the ways inspectors work is through the surveillance of real estate websites, through which they can also monitor irregular tourist rentals.
In fact, this is an area where rental fraud has grown the most in recent years. To keep track of holiday homes, the main source of information for the Treasury is through the ‘Modelo 179’ form, which should be submitted on a quarterly basis for all rental properties by the intermediators in operations (such as Airbnb, etc.) not by the owners of the touristical apartments rented.
This document includes fundamental information, since it must state the owner of the property being rented, its cadastral reference, the number of days it has been rented to tourists, as well as the amount of rent received.
The latest data from the Treasury Technicians (Gestha) indicate that in Spain there are close to 1.28 million irregular leases, which makes up an astonishing 40.8% of the total. That means that four out of every 10 rentals are not declared.
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Abad & Asociados Abogados y Economistas, S.R.L. is a firm of English-speaking lawyers and accountants founded in 1996 in Murcia by Isaac Abad, winner of the “Best Lawyer 2022” award in Tax Law in Murcia granted by “Best Lawyers”.
The Abad Abogados Murcia law firm specialises in offering innovative legal solutions to its clients, prioritising quality, satisfaction and success. With offices in central locations in Murcia city, Los Alcázares and La Zenia in Orihuela Costa, Alicante, it is easy for expats and foreign citizens abroad in Spain to access the legal services they need.
The team at Abad can help you with any issues relating to Real Estate and Property law, Taxation, Litigations and Commercial law in Spain. From getting a NIE number in order to 
be able to undertake official paperwork in Spain, to completing your residency and visa requirements, they are there to ease every step of the move to Spain for people wanting to come and live in the country.
be able to undertake official paperwork in Spain, to completing your residency and visa requirements, they are there to ease every step of the move to Spain for people wanting to come and live in the country.They can also handle any resident and non-resident tax declarations in Spain, including property taxes and issues surrounding double taxation across international borders, as well as inheritance tax and wills.
Whether you want to formally register your own business in Spain, take someone to court or face being taken to court yourself for whatever reason, Abad & Associates will be by your side.
Their unqualified successes in helping clients navigate these issues have made Abad Abogados one of the leading firms of Lawyers and Accountants and Tax Advisors in the Region of Murcia and in Alicante province.
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