Tax

[Graham]

As I understand it, you can only reclaim expenses for when the property was actually let

i.e, If rental income was 20k and your expenses were 20k, but the property is only let for 50% of the year you can only claim 50% of expenses against your tax - meaning you actually have a taxable profit of 10k despite the reality of just breaking even. Is this correct?

Graham

[LICY]

I guess that sounds like it could be right. However to a certain extent does not seem right. The electric for example will be used much more during the rental periods than any other time, thus that consumption should not be pro rota, bet it is though. Water would be the same too.

[Graham]

It's the gas that gets me - I am seriously considering not renting from Nov-Mar as it is almost impossible to break even

[LICY]

It's the gas that gets me - I am seriously considering not renting from Nov-Mar as it is almost impossible to break even

To be honest I tend to agree with you. We had someone who wanted to rent for 10 weeks from December. They seemed to be put out being asked to pay £300 per week plus electric. We have a quality product, but. more to the point she was adamant she could rent for that all in as she had before. good luck because I would worry about heating costs and feel it would be very risky to charge so little. Hope who ever she booked with last time and probably has booked 10 weeks again managed to make some money to cover the overheads during that period.

[Bruce Wallis]

Last year we made a decision not to do winter lets.
The return doesnt even cover costs if the client is running the heating all the time.

I have agreed to rent this winter, only if electricity is charged seperately, or the client pays a £100 weekly excess on the rental.

[LICY]

Last year we made a decision not to do winter lets.
The return doesnt even cover costs if the client is running the heating all the time.

I have agreed to rent this winter, only if electricity is charged seperately, or the client pays a £100 weekly excess on the rental.

Does that mean you are forgoing your long stay?

[biffa]

In our experience and handling tax returns for many clientes, summer lettings rarely give any profit but rather simply defray the annual running expenses.

[LICY]

In our experience and handling tax returns for many clientes, summer lettings rarely give any profit but rather simply defray the annual running expenses.

We would be only too happy to break even on the basis that we have free stays, rather than make money.

[Sheila]

You can deduct IVA (VAT) from almost everything related to your business .....the government will return you 100% of the deducted IVA every 3 months; not sure about exactly what is included on the deduction list because theyv changed the rules but I think it depends on the business: i.e; any kind of hardware (computers, tonners, cellphones...) diesel, cellphone call invoices, office supplies and furniture (not sure), company diesel vehicles, among others.

You need an accountant and he/she helps you save money or gives you the right advice.

Furthermore, you have the IRS deductions (health and pharmacy, etc etc etc)

Surely you have to be registered for IVA to get it back, what is the registration limit?

[EMM]

10,000 euros, but will you not have to charge iva to your renters costing them another 23% ???

[Sheila]

10,000 euros, but will you not have to charge iva to your renters costing them another 23% ???

I guess. Is registration optional or compulsory at that level?

[EMM]

If your turnover is 10,000euros or more then I think, as it is compulsory !!

[RichardHenshall]

Isn't IVA, if charged, 6% for accommodation etc provided under an Alojamento Local licence?

[ron5000]

Isn't IVA, if charged, 6% for accommodation etc provided under an Alojamento Local licence?

Correct. My accountant says all the the house owner has to do is buy a book of government recognised receipts from a stationers store then give the receipt inclusive of 6% IVA and with fiscal number to the renter or agent renting the house on their behalf. Simple but no one does it

[pato]

I just pay tax in the UK, I give everything to our accountant and say fix that, hope I'm right.