Welcome back to Two-Minute Tuesday! This week, Keith and Sophia from Target Property Spain tackle an essential question for anyone planning to rent out their Spanish property:
“How much tax do I have to pay on my holiday rental income?”
The answer depends on where you live—and the difference can be significant.
🇪🇺 If You’re an EU Resident:
Good news! You’ll pay 19% on your net income. That means you can deduct allowable expenses such as:
- Cleaning and laundry
- Property management fees
- Utility costs
- Maintenance and repairs
This structure allows for much more flexibility and typically results in a lower overall tax bill.
🌍 If You’re a Non-EU Resident (including UK post-Brexit):
Unfortunately, the rules are stricter. You’ll pay 24% on your gross income—and you can’t deduct any expenses.
So even if you have regular costs like management or cleaning, none of that can be written off.
Why It Matters
This tax difference could significantly impact your rental yield. For non-EU residents especially, it’s important to factor this into your financial planning when purchasing a property with holiday letting in mind.
📺 Watch the full video above for a quick and clear explanation—and don’t forget to subscribe or check back next Tuesday for more expert advice from the Costa del Sol!