# Can you offset furnishing costs/mortgage/renovation costs against short-term rental income tax for a house you are sometimes resident in?



## freakofnature (Oct 18, 2021)

I'm terribly confused about something, but maybe someone who is more knowledgable can help me out.

The situation is that I'm normally resident in Germany (pay income taxes there, spend most of the year there) but with a property in the countryside in Spain where I spend a few months a year (I have an NIE) and that I plan to rent out when I'm not there (e.g. over AirBnB).

As far as I know, I'm required to pay taxes on the rental income of that property to the Spanish revenue office. My question then is whether I can counter-balance this tax bill by offsetting the costs of furnishing the house for AirBnB or the costs my interest payments on the mortgage, or the costs of renovation etc.

Thanks in advance.


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## 255 (Sep 8, 2018)

@freakofnature -- I do not know, first hand, the tax regime in Spain. But assuming this property is a business (preferably in an entity for liability protection,) the normal situation is that gross receipts minus expenditures equals net income, which is the number you are usually taxed on.

A tax accountant, in Spain, could surely put you on "the straight and narrow." Furnishings may be able to be deducted in total or you may have to depreciate them. Interest costs of your mortgage should also be allowable, along with any licenses or fees required. Renovation costs may be deductible or they may only be used to adjust your basis in the property, depending on scope.

Maybe someone with Spanish experience, in this area, will post -- but personally, I'd have a talk with an accountant, in Spain, that has experience in short term real estate rentals. The cost of the consult should also be deductible. Good luck! Cheers, 255


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## Moulard (Feb 3, 2017)

Like 255 I have no Spanish experience, but to expand on the point, don't forget that there is the added complicating factor in the mix is that you say that you use the property part of the year. 

At the very least, you should expect that this component of personal use would have to be factored into both the depreciation of assets, as well as any deductions related to the mortgage and other expenses associated with maintaining the property. 

Its also entirely possible that certain expenses, or depreciation or assets would be treated as personal because of the mixed use nature of the property.

I don't think I have seen anyone with Spanish experience post in expat tax forum recently, but you might have better luck in the Spain Forum









Spain Expat Forum for Expats Living in Spain


The Spain Expats forum is a dedicated community of people who have moved to Spain, or who are planning to. This is the place for Expats to meet and discuss anything about moving to, & living in, Spain.




www.expatforum.com


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## Nomoss (Nov 25, 2016)

I understand that nationals of EU countries, plus Iceland and Norway, can offset charges on a property against rental income.
Information on this is included in the link below,
Maybe someone else will come along to explain the intricacies, but in the meantime I suggest you seek advice from a gestor who deals with tax issues, and study the law regarding income tax for non residents *HERE*


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## freakofnature (Oct 18, 2021)

Thanks everyone for the advice so far.

To clarify my situation, I will be doing this in my personal name, instead of as a business. But I plan on keeping a separate bank account to make things cleaner.


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## Bevdeforges (Nov 16, 2007)

You may want to check on what the tax rules and laws are in Spain in this area. I know here in France, it's possible to declare rental property income on your regular income tax declaration - albeit with a somewhat limited range of expenses that you can claim against the revenue - without having to set up a business. However, as someone who is not resident in Spain, that may or may not be do-able. Plus, the fact that you will be occupying the property on an occasional basis may complicate matters - at least to the extent of having to apportion some expenses between your personal use of the property vs. your rental use of the property.


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## Nomoss (Nov 25, 2016)

Bevdeforges said:


> You may want to check on what the tax rules and laws are in Spain in this area. ............................................


Sorry, it was't evident without opening it, but my link above was to information provided by the Spanish tax authority 

I forgot I wasn't posting on the Spain forum, maybe it would be a good idea to move the discussion there.


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## freakofnature (Oct 18, 2021)

thanks @Nomoss I wasn't aware there was a specific Spain forum. I cross-posted there: Can you offset furnishing costs/mortgage/renovation...


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## Nomoss (Nov 25, 2016)

freakofnature said:


> thanks @Nomoss I wasn't aware there was a specific Spain forum. I cross-posted there: Can you offset furnishing costs/mortgage/renovation...


I suggest you open the link I posted above and read the information on it. Click on the word "HERE" to open it.


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