DEDUCTIBLE EXPENSES VIVIENDA VACACIONAL
WHAT ARE THE TAX DEDUCTIONS FOR THOSE WHO HAVE A VACATION HOME WITH A REGULAR VIVIENDA VACACIONAL LICENSE IN THE CANARY ISLANDS?
There are many people who ask me this question during telephone or presidential informational interviews, so I decided to summarize them below for clarity.
MISCELLANEOUS UTILITIES.
Expenses incurred for utilities for your Vivienda Vacacional business may be deducted as essential operating costs for your business. These expenses typically include electricity bills, water bills, costs related to internet connection….but not only.
ORDINARY COSTS OF BUILDING ADMINISTRATION
Condominium administration expenses that may include maintenance of the building in which the property is located, maintenance of the gardens and swimming pool if present, and maintenance of the accounts by the administrator who in Canaria is very often represented by a company.
CLEANING FEES
Cleaning expenses, if carried out by specialized firms or contractors, can also be taken as a deduction.
In fact, when professional services are used to clean the dwelling, wash linen and maintain it, the related expenses may be considered deductible.
COMMISSION OF BOOKING AND MANAGEMENT PORTALS
Of course, you will then be able to deduct all the invoices related to commissions from the various tourist booking portals, such as Booking, Airbnb, VRBO, and others that in order to provide you with visibility require you to pay a percentage of your rental income in return.
This percentage will also be required of you by the eventual agency or person, company in charge of the management of your vivienda vacacional (checkin, checkout, assistance to the property and the tourist, emergency response, supervision cleaning service and property maintenance) and will also be tax deductible.
INSURANCE PREMIUM
The Vivienda vacacional law requires you to take out a specific insurance policy that covers any damages caused by tourists, to third parties, atmospheric or to the contents of the property for any eventuality.
The annual premium you pay for this insurance will be deductible, according to the Personal Income Tax Law , from your taxes for the year in question.
EXPENSES FOR EQUIPMENT OR ENDOWMENT OF THE BUILDING
When you own a vacation home there are numerous details to take care of to ensure a pleasant experience for your guests.
From the bathroom and bedroom linens that are always in excellent condition, unstained and of good quality, the small appliances such as mocha coffee maker, water kettle, various sized cookware and kitchen utensils that are neither ruined nor rusted.
All purchases made for your business can make a difference on your income and are tax deductible.
PROMPT ACTION AND MAINTENANCE
Also eligible for the deduction are all expenses incurred for emergency work performed by professionals such as electricians, plumbers or similar, as well as minor maintenance work such as painting walls or repairing locks by a carpenter.
THIRD-PARTY SERVICES
To run your business you may need professional third parties such as accountant, lawyer, real estate agency…all fees of these professionals inherent in your vacation rental are tax deductible.
TAXES
Property taxes, such as the Urban Property Tax (IBI) and garbage collection fee (Basura), which are own municipal taxes and cover the costs associated with ownership and waste management, can be deducted from personal or business taxes.
TIP
To ensure accurate management of your expenses, you should keep invoices from service providers.
However, it is important to keep in mind that the ability to deduct these expenses is limited based on the number of days you had guests.
So be sure to keep a copy of all invoices from service providers to the property and professionals who operated during the time you hosted your clients or otherwise in reference to a booking that occurred at your vacation rental.
FOR MORE INFORMATION PLEASE FEEL FREE TO CONTACT ME
