Guide to Letting Property in Spain

The popularity of coastal holiday destinations in Spain such as Marbella, Estepona, Sotogrande and Cadiz, have led to increased interest from investors seeking buy-to-let properties. According to a recent report by Esade, Fevitur and Salvetti & Llombart, 14% of tourists visiting Spain in 2014 rented houses or villas, spending a total of €9 million on a rental. One third of visitors would not consider staying in a holiday destination that did not have available homes to rent. Hotels still attract the vast majority of tourists, but rental properties are growing in popularity, since many travellers seek a home away from home, where they can cook their own meals and enjoy the privacy a villa or apartment affords, especially during seasons of maximum hotel occupancy.

Why Rely on Winkworth International?

Winkworth International’s reputation for reliability and our many years in the real estate sector, combined with local knowledge of Spain’s most popular holiday rentals zones, mean that we can fast track you to the rental villas, apartments or countryside homes that are most in demand. We put our local knowledge to good use, to ensure your buy to let home is exactly what discerning tenants are looking for.

How Much Rent can I expect to earn for my Villa or Apartment?

The average long-term rental price in Spain amounts to €650 a month, while weekly rental rates stand at around €550. During peak season in premium areas like Marbella, Puerto Banus and Ibiza, tenants pay up to €60,000 a month or €40,000 per week, for luxury villas with sea views, infinity pools, and well maintained gardens.

Which areas are most popular?

There is a growing demand for long- and short-term rentals alike, both in major cities like Madrid and Barcelona, and coastal havens like Marbella, Estepona, Sotogrande and Cadiz. The south of Spain in particular has built a great reputation for combining luxury, safety and a great family atmosphere, with a host of facilities for kids and well rated international skills. English is widely spoken in these areas, which makes them a popular choice for holidaymakers and residents from the UK, Scandinavia, Russia and, to a lesser extent, China.

Legal Requirements

To ensure your rental contract is legal, you must register it with the housing department. When you rely on a real estate agency, the latter will add 18% VAT to the rent, which must be paid to the Tax Department. The agency will also expect a commission, which is usually set at around 15% of the rent. You will have to declare your rental income, and set aside 24% of the rent, to pay a monthly (or quarterly) withholding tax.

If you are a UK or German resident, you will need to declare this income to your home tax authorities. This way, you can claim back the amount you have paid in your home country, from the Spanish government. If you are a Spanish tax resident, you will have to declare your rental income in your yearly income tax declaration. Make sure to register your property as a tourist letting operation if you wish to deduct maintenance expenses from your tax payments.

Contact our Winkworth International team for further information about purchasing a buy to let property or letting a property in Spain, we would be glad to help you.

Interested in selling or letting in Spain?

Contact Winkworth International Admin or call us at +44 (0)208 299 2722