A landlord’s guide to renting in Spain
Letting your property
Before you let your property
You should be aware of the taxation laws for both non Spanish residents and existing Spanish residents.
At ChicRoom Properties we screen potential tenants to make sure they will be the perfect tenant for you. You may also be asked for a reference.
By law, you must have an energy performance certificate for the property. You should also have an inventory of all the furniture and fittings, make sure the tenant signs it before they move in. This can help settle any queries when it comes to the returning of the damage deposit. Once the tenant arrives, the tenant should transfer all the utility accounts in to their name if it is the tenant that will be responsible for bills. You should also take meter readings just before the tenant moves in. It is also advisable that the landlords seek building insurance to cover any damage to their property. In addition to this, before the tenant moves in, the property must be cleaned to a high standard.
At ChicRoom Properties, we charge an agency fee of 10% of the annual rent + VAT, which must be paid in full upon singing of the contracts. The agency fees vary depending on the length of your stay. These fees are as follows:
- Long term contracts (more than one year): 10% of the annual rent + VAT
- Temporary contracts (from 6 to 11 months): 1 months fee + VAT
- Temporary contracts (from 2 months up to 5 months): 50% of one month's rent + VAT
- Temporary contracts (1 month): 25% of one month's rent + VAT
By law, upon signing the tenancy agreement, the tenant is obliged to give a minimum of one month's rent to the landlord as a deposit to insure against possible damages to the property. The Landlord can legally ask for a minimum of one month deposit but for more expensive property, the landlord can ask for additional guarantee that could be up to 6/8 months extra deposit. This is returned after the tenancy period and after the owner has 30 days to inspect the property. The landlord should allow for normal wear and tear of the items and the property.
During the rental period: it might also be a good idea to leave any appliance manuals or instructions in the property and leave instructions to anything that they might need help with. You should also leave contact information and emergency contact numbers just in case. You also will need to explain the use of any safety equipment that is in the property, for example a burglary alarm.
During the rental period
The tenant will be expected to pay for the utilities unless otherwise stated. However, the landlord is responsible for maintenance that results from normal wear and tear of the property.
It is important to note that upon letting your property, you are losing possession for an agreed period of time in exchange for regular income. This means you are no longer able to access the property without seeking permission of the tenant beforehand. You are not allowed to enter the property for any random 'inspection/routine checks', however, it is possible to arrange these between the landlord and the tenant, as long as permission is granted from the tenant you can enter the property.
Taxation: the rental income of non-Spanish residents should still be declared in Spain as well as the country where you are a tax resident. You are able to claim one of them back so that you are not being taxed twice.
ITP Tax: this is a property transfer tax that is paid by the tenant. It is 0.5% of the total value of the contract, for example, if your monthly rent is €2,300 for 3 years contract (36 months), the ITP tax would then be €414. The tax payment can be done in any bank which collaborates with the revenue collection of Generalitat de Catalunya or alternatively, you can pay online through the virtual tax office. You have up to 30 days after signing of the contract to pay the tax. Upon paying, you need to have the tax accompanied by the 600 tax model and a copy of the rental agreement.
As a landlord, you might want to think about rental insurance or rental bank guarantees. Both of these protect the landlord against the tenant defaulting. With the rental bank guarantee, if the tenant defaults the landlord can claim the money from the bank and then the bank would claim the same amount from the tenant. These schemes can be expensive but some landlords wish to do it to ensure security of payments.