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Renting your property out to holidaymakers

With many Costa del Sol property owners now looking at ways to help with the operating costs of their property, holiday and long term rentals are a hot topic at the moment. So, if you want to use your Spanish home during certain times of the year and earn rental income the rest of the time when it’s empty, today’s post is especially for you.

With many Costa del Sol property owners now looking at ways to help with the operating costs of their property, holiday and long term rentals are a hot topic at the moment.

Rent our your Costa del Sol property
Rent our your Costa del Sol property

So, if you want to use your Spanish home during certain times of the year and earn rental income the rest of the time when it’s empty, today’s post is especially for you.

Let’s start with the issue of tax.

Well, as with all sources of income, various tax issues will arise related to the short-term rental of your property in Spain, depending on your circumstances.

So it’s a good idea to speak to a financial adviser to clarify your personal tax situation before you rent your Spanish property out.

If you use a rentals management company they should be able to provide you with regular and detailed rental statements which you can give to your accountant for tax declaration purposes.

Now, another major factor you should bear in mind before renting out your property to holidaymakers is that with the worldwide recession biting hard, the holiday rentals market on the Costa del Sol is not quite as buoyant as it used to be.

The numbers of tourists on the Costa del Sol have been down in recent years and, what’s more, the local market is saturated with good quality apartments to let, making it highly, highly competitive.

That means, unless you’re very lucky, your property probably won’t be booked as often as perhaps you’d like.

The good news is that there are some steps you can take to improve your chances of attracting holidaymakers to rent your home, and more often.

If you really want to do things properly, we recommend you find a professionally-run holiday rental company with experienced bi-lingual staff and the expertise and resources to market your property correctly and help you maximise your potential holiday rental income.

A first-class rentals management company will offer both long-term and holiday rental services, so you have a choice and they’ll help you decide your financial objectives from the outset by advising you about the number of weeks per year you can realistically expect to rent out your property to holidaymakers.

The easiest way to find companies offering comprehensive holiday rental services is to go online and do a search through Google, check around the area closest to your property, or ask friends and neighbours for recommendations.

The holiday rentals company you select should be fully geared up to handle the whole business of renting out your property to holidaymakers – from providing appropriate insurance and comprehensive legal and practical safeguards to protect you, your property and the rental clients, to taking bookings and payments online, then being there for guests 24/7 during their stay, and finally paying your fees directly into your bank account.

Britons with holiday homes in Spain get significant tax breaks

Alistair Darling may not have wanted to draw too much attention to it, but some positive tax news for owners of holiday homes in Spain was buried away in the small print of his most recent Budget – and we think you’d lshould know about it!

Alistair Darling may not have wanted to draw too much attention to it, but some positive tax news for owners of holiday homes in Spain was buried away in the small print of his most recent Budget – and we think you’d lshould know about it!

The Budget stated that Britons with an unprofitable holiday home in an EU country outside of the UK (such as Spain) are now able to offset losses on their property against their earned income.

Until now, no British Spanish holiday home owners have been able to do this, but HM Revenues and Customs have at last admitted this discrepancy may have been unlawful, and are therefore allowing owners to offset losses going back 5 years.

However, you must act fast, as this tax break will be banned completely by the UK government in April 2010.

Apparently, you’ll be eligible to claim back your losses if you’ve had your property available to rent out for more than 140 days of the year, and have actually achieved 70 days worth of rentals in that year.

Another good thing to bear in mind is that if you use a property management company, all the payments you have ever made to them for their services  should be claimable as legitimate expenses, provided you’ve been issued with legal invoices.

If you feel this situation directly affects you, and would like more information about it, we would urge you to contact your UK accountant or financial advisor as soon as possible.

Good luck and hasta luego!

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