Model 179: Tax Office expands the mechanisms to control vacation rentals

Vacation rental effects

We start from the palpably negative effects in certain Spanish cities, which in recent years have caused the proliferation in the number of homeowners who have used their second homes, and even their usual homes,  for short-term temporary tourist use: gentrification, reduction in the demand for hotel accommodation and, therefore, a decrease in employment in these establishments, price increases, business closures, etc. All this is accompanied by the overcrowding of coastal and urban areas along with the depopulation of rural and inland areas.

What has led to the development of this trend in tourist use to the detriment of the second residence?

In response to the two sides, the owner and the client, the fundamental reasons that have encouraged owners to give these second residences use in tourism scheme are as follows:

-       Obtaining fast income.

-       Late payment elimination.

-       Better care of the house.

-       Flexibility in the use of housing.

-       Existence of platforms, such as Airbnb, that efficiently manage the advertising of real estate and the same reservations.

For clients who demand accommodation, the reasons that drive the search for tourist homes are, among others:

-       Lower price than hotels.

-       Flexibility: no schedules.

-       Comfort and charm, like home.

-       For families with children: cook 24 hours.

Now, behind this new scenario, we find that this new monetary flow has been insufficiently regulated by our authorities, causing the submerged economy to have been nourished in excess of this insufficiency.

Need to control the vacation rental

As a result of the boom in the transfer of housing for tourism purposes and the insufficient regulation of this activity, among other measures, the new information obligation for people or entities is created, in particular, the so-called “collaborative platforms”, mediate in said transfer of use. Obligation to be effective through the presentation of a quarterly information statement, model 179.

It is also important to highlight the obligation, established in Andalusia for the owners of these homes, to make a voluntary declaration of initiation of activity in the Andalusian Tourism Registry, where the property will be granted, after valuation by the Junta de Andalucía, a VFT identification code of registration (Housing with Tourist Purposes).

What data is sent through this model?

To meet the need for regulation of the yields obtained by the owners of the assigned housing, the Tax Agency requires, by the Order HFP/544/2018 of 24^th of May, that the following information is provided:

a)    Identification of the owner or holders of the dwelling, of the holder of the right under which the dwelling is transferred (if different from the holder of the dwelling) and of the assignee persons or entities.

b)    Identification of the property (complete address) with specification of the cadastral reference, in case it was assigned.

c)     Number of days of enjoyment of the house for tourism purposes.

d)    Amount received, where appropriate, by the transferor of the home use.

e)    Contract number under which the declarant intermediates in the cession of use of the house.

f)     Start date of the cession.

g)    Date of intermediation in the operation.

h)    Identification of the payment method used (transfer, credit or debit card or other payment method).

The information contained in letters e), g) and h) above is optional, in order to make transparent the operation related to the transfer of the property, which avoids potential information requirements by the Tax Administration aimed at knowledge of said elements relating to the transfer of these properties.

With this information, the Tax Agency is now able to cross the data declared by the intermediaries, through model 179, with those declared by the owners of the homes assigned for tourism purposes.

That is why those owners who have been enjoying the poor regulation and control of this activity of house cession become aware that the Treasury already has means to locate that tax fraud.