N) Navigating Vacation Rental VAT: Essential Insights for Landlords

Understanding the nuances of vacation rental taxation, including Value-Added Tax (VAT), is essential for landlords, particularly in countries like Spain. Accompany provides tailored support to ensure landlords comply with VAT requirements and effectively manage their vacation rental properties.

Introduction

Understanding the nuances of Value-Added Tax (VAT) in the realm of vacation rentals poses a significant challenge for landlords, particularly in jurisdictions like Spain. The pivotal question is not merely categorizing properties as standard rentals or hotel-like services, but rather discerning when a vacation rental qualifies for VAT inclusion. This determination hinges on whether the property offers hotel-like amenities and services. In this guide we delve into the criteria defining vacation rentals, the differentiation between typical rentals and hotel-like services and how Accompany aids landlords in comprehending and meeting their VAT obligations while efficiently managing their vacation rental properties.


What to know

If services specific to the hotel industry are provided, the rental of a tourist apartment will not be exempt from VAT and must be taxed at the reduced rate of 10% as a hotel establishment (art 91.uno .2. 2 LIVA).

In many countries, including Spain, vacation rentals can be considered a “hotel-like service” and may therefore impact VAT. But when is a property considered a vacation rental?

 

This occurs if you meet any of the following criteria:

  • Your property is owned by a rental company.
  • Your property is listed in advertisements (online or offline).
  • You offer additional services.

 

Tourist rentals should be distinguished between hotel and catering services. Lodging services are characterized by providing customer service beyond the provision of a property or part of it. In other words, accommodation services, in contrast to property rental, normally include the rendering of services such as concierge and continuous customer service in a designated space. Daily cleaning, changing of bed linen and bath towels, as well as other amenities like laundry, luggage storage, and accommodation booking, are also commonly provided. Sometimes, room service and catering services are also offered.

 

They are not considered complementary services typical of the hotel industry :

  • Cleaning services in the property provided at the beginning and at the end of the stay of each tenant.
  • Change of bed linen and towels in the property provided at the beginning and at the end of the stay of each tenant.
  • Cleaning in the building’s communal areas (hall, stairs and lifts) and the area in which it is located (green areas, gates, pavements and streets).
  • Technical support and maintenance services for repairs in plumbing, electricity, glass, blinds, locks and household appliances.

 

It’s essential for landlords of vacation rentals to understand the distinction between standard property rentals and hotel-like services, particularly regarding VAT implications. When a vacation rental provides specific services typical of the hotel industry, such as concierge services, daily cleaning, and provision of amenities, it falls under the reduced VAT rate of 10% as a hotel establishment. By complying with these regulations, landlords can navigate taxation requirements effectively while providing enhanced services to their guests.


How Accompany can help

Navigating vacation rental regulations and VAT obligations can be challenging for landlords. Accompany is here to help. Our experienced team offers expert advice to identify the correct classification for your accommodation, considering factors like services offered and tenant intention.

Additionally, we provide valuable services to streamline accommodation management, including accounting and personnel management. Partnering with Accompany ensures landlords meet VAT obligations and efficiently manage vacation rental activities.

We understand not all landlords have time to delve into complex rules. That’s why we offer tailored solutions to meet your needs. Whether you seek hands-off management or professional support, Accompany ensures compliance and peace of mind. Allowing you to enjoy additional income worry-free.

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The information contained herein is of a general nature, and subject to changes. Applicability to your specific situation should be determined through consultation with our tax or legal advisors.