Anyone own second property in Spain and rent it out?

[HolidaysQueen]

My husband and I have finally found a property in Spain that we want to buy after lots of years of saving and searching! We would look to rent it as a holiday rental for as much of the year as possible so that we could broadly cover our costs. I'm struggling a little with understanding the best way of doing this, although thinking that we might need to set up a Spanish company to do it. Has anyone got experience of this? Any recommendations of accountants/IFAs in the UK who may be able to help us sort out what we need to do?
Thanks!

why would you set up a spanish company?

seriously, don't do that unless you really have to: it's very complicated and expensive. You should be able to just pay the tax on your Spanish income as a non resident, and get a spanish accountant to submit your tax return once a year. can the estate agent not put you in touch with an english speaking local asesor? even if they're on commission, you'll still save a lot of money if your other option is a uk ifa.

(but if you're dead set, you will need a spanish lawyer, not a uk one to set up a spanish company and it costs about 3k euros to set up, plus ongoing fees for submitting your quarterly returns. you also need to see a notary and pay him or her lots of money every time you want to wipe your arse).

it's so we can offset the maintenance costs and mortgage costs against it - don't think we can do that through normal tax return as you can only put income on it rather than the profit.

i guess i wanted to talk to an ifa here first so i had a sense of the broad things i need to consider but having problems finding one. i will def talk to the estate agent and our lawyer about an english speaking asesor in the area - thanks!. my spanish is good but not good enough for tax complexities unfortunately!

I don't know if you can offset mortgage costs under spanish law. but strongly suspect that any offset against tax would be more than eaten up by the costs of running a spanish company. remember you're highly unlikely to be anywhere near fully booked in the first year anyway.

we did look for a uk accountant who knew about spanish tax law a few years ago but also didn't find one (well, we didn't find one who charged less than about £200 an hour). think the spanish route is your best bet.

You want to speak to Mrsspoon she has a flat in Spain.

Thanks Senora - already had our first experience of a notario and I'm expecting he's going to become a very well known face...

I have just discovered this (only just returned from Spain myself). seb1 is correct we have an apartment in Spain and run it as a bit of a business.

We have a company in Spain that looks after the apartment, cleans it, hands over keys to guests etc, the company is run by an English couple who have both English and Spanish staff (which is useful as the area of Spain we have our apartment in a very popular area for Spanish holiday makers). The company is registered with the Tourist Board which makes the rental of our property in Spain legit. This company is located in the Mar Menor/La Manga area of Spain www.holiday-in-la-manga.com/eng/index.html they have groups of similar properties within certain developments and have been able to place them with wholesale travel agents such as Late Rooms, Ryanair etc for extra promotion.

I do a lot of our own promotion, mostly through internet holiday advertising, Holiday Lettings, Holiday Rentals, Owners Direct etc, etc, it's worth having a look and picking one or two sites that appeal to you and advertising with them.

As far as tax goes, we have only had our apartment since April so haven't had to do anything yet but I understand that there is a form you have to get from a tobacconist (??? I'm not making it up, honest ???) however I didn't come across a tobacconist's shop during our last visit and think I will need to ask for help to find this form, apparently if you have a maximum of two properties in Spain that you rent out you pay a flat rate tax on the value of the property but you cannot off set any expenses against this. This is my understanding from reading the tax section in a magazine about Spain but it's not exactly clear to me either but I am hoping to find out for certain very soon.

Very wise to make sure you have a solicitor, I think this was one of our biggest (and stupidest) mistakes. We went out on a viewing trip with a local company and were assured that we were being looked after and they were providing legal representation for us and turns out we were just dumped and found ourselves out in Spain in April trying to arrange the completion of the deal ourselves (with two small children in tow of course), then found ourselves in the meeting at the notary sharing a solicitor with the builder , have since tried for some kind of resolution with the company who put us in this position without any result just for continuity this is their website here www.bravoscotland.com/ their service was a big let down and I would not recommend using them.

We have been booked more or less solid all summer but things have tailed off now and I suspect they won't pick up until the Spring, we also have already taken a few bookings for next summer and have had a fair few enquires too.

Hope something I've said is useful and if there is anything you want to ask just give me a shout.