How to declare Airbnb's income on your tax return

Airbnb, founded in 2008, is a company that offers accommodation to particulars and tourists, connecting through its internet platform, people who offer their homes for rent, with people looking for temporary accommodation.

Currently, the legal situation of holiday rental, is a controversial issue, which administrations, are still specifying and defining the rules, to which this holiday rental must conform, and therefore, the company Airbnb, has signed an agreement with the Spanish Association of Tax Advisors, in order for, the hosts to resolve their doubts about how to declare the income obtained.

In this section, we comment the most important points, in relation to the taxation of the rental of these properties, through this online platform:

a) Who must declare the income?

The host who offers the house, must declare the income in his or her income tax return but, may deduct from the income, any expenses he or she has incurred, such as the Airbnb commission, cleaning costs, or repairs that are entirely deductible.

On the other hand, the gross income is not subject to a fixed tax rate but, will depend on the total income of the taxpayer in the year, the total of his tax return and, his personal circumstances.

b) Types of yield:

1. Rental of a main residence: the rental of a main residence, by periods or by rooms, generates income from real estate capital.

2. Other properties at the disposal of the owner: Properties that are at the taxpayer's disposal and, that are not rented or assigned to economic activities, excluding the habitual residence, generate real estate income imputation.

The imputed amount will be 1.1% of the cadastral value, if this value has been revised in the last 10 years. If it has not been revised within this period, the applicable rate is 2%.

3. Tenant who rents a property: When the host is the tenant of the property, it generates income from movable capital.

c) Who pays taxes in Spain on the rental income they obtain?

  • Tax residents in Spain pay tax for all the income they obtain, so the resident pays tax on the rents they obtain, from AIRBNB for properties located in Spain.
    When the property is located abroad, it is also subject to taxation in Spain, since all global income must be declared, taking into account the taxes paid, in the country in which the property is located, within the limits of Spanish law.
  • Non-residents who obtain rental income, from properties located in Spain by AIRBNB, must pay tax on the income tax of non-residents.

d) Deduction of primary residence

In cases where, the deduction for primary residence is being applied, the rental of the residence for a long period of time, could affect the application of this deduction, because the tax consideration of main residence could be lost.

e) VAT taxation

If the renter provides complementary services such as catering, cleaning, laundry... it would be necessary to pay VAT, in accordance with Law 27/1992 of the Value Added Tax.


B Law & Tax
International Tax & Legal Advisors

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Tags: spanish tax return, Residence, rental income