Letting the whole house: property income or a business
The first question is not which return you file but what you are for tax purposes. Letting a rural house can be property income — you declare takings and costs in your own income tax return and little else — or it can be an economic activity, with tax registration, quarterly returns, record books and instalment payments. The difference is decided neither by turnover nor by how businesslike the owner feels.
For a letting to be an economic activity the law requires, with nuances, at least one person employed under a full-time employment contract devoted to running it. And there is a second route that rural tourism tends to forget: if besides the accommodation you provide services typical of the hotel trade — meals, cleaning during the stay, continuous attendance — then what you are doing is no longer letting, it is lodging, and that is a business in itself whether or not you have staff.
Letting a dwelling is exempt under article 20.Uno.23 of the Spanish VAT Act, but the exemption falls away if you provide services typical of the hotel trade. Handing over keys and cleaning between one guest and the next is not enough to lose it; serving breakfast or making the beds every morning is. A flat 10 % on every stay of up to 30 nights, services or not, was in Royal Decree-law 26/2026, which Congress let fall on 2 October 2026: it is postponed with no date, and July 2028 is the last European deadline. We develop it in hotel services or not.
The house that belonged to your grandparents
A good part of rural tourism in this region sits on inherited property, and that carries two consequences nobody tends to mention at the moment of inheriting.
The first concerns depreciation: where the house came through an inheritance, the acquisition value used for depreciation is the one established for Spanish inheritance tax plus the costs and taxes paid, and the depreciation is computed excluding the value of the land. Getting that figure wrong is the error that makes us file the most amended returns. The second concerns the future: that same value is what will determine the capital gain on the day the house is sold. Accepting a low valuation in the inheritance in order to pay less then usually means paying more later.
Depreciation deserves a line of its own for a reader coming from another system: Spanish income tax lets you deduct an annual write-down of the building while it is let, even though nothing was spent that year. The price of that deduction falls due on the day of the sale, because it lowers the acquisition value used to work out the gain.
Inheritance and gift tax in this region
Spanish inheritance and gift tax is devolved to the regions, and Extremadura has reliefs and allowances of its own depending on the relationship and the circumstances of the heir or the recipient. We do not publish the percentage here: these rules are changed with each year's accompanying budget legislation, and a stale figure does more harm than none. What is stable is the rest of the map.
The deadline for an inheritance is six months from the death, extendable if the extension is applied for in time; for a gift, thirty working days. Competence is determined by where the deceased habitually lived during the preceding years or, for gifts of real property, by where the property is. And one thing always comes as a surprise: giving away a property during your lifetime also produces a capital gain in the giver, even though nothing was received. It is in inheritance and gifts and in the comparison giving in life or leaving it in the will.
Who writes to us from Cáceres
| Who | What has to be sorted out |
|---|---|
| Rural house let as a whole dwelling | Whether it is property income or a business, and whether the VAT exemption survives the services provided |
| Siblings inheriting the village house | The value taken for inheritance tax, future depreciation and the gain on the day of sale |
| Parents wanting to pass the property on now | Which regional relief applies, the thirty working days, and the gain arising in the giver |
| Farm with lodging attached | Two businesses living side by side under two different VAT regimes |
| Returning emigrant with a house here | Tax residence acquired on return, and which income now has to be declared in Spain |
Working with Cáceres, remotely
Remotely and in writing, which in a province this large is simply practical. We start by looking at the title under which you hold the house — purchase deed, inheritance, gift — because depreciation, the future gain and half the answers come from there. After that, the ordinary run of things: quarterly returns, the annual income tax return and whatever is outstanding.
If you have been letting for years without declaring it, you come forward before the demand arrives: the cost is set by article 27 of the Ley General Tributaria, the Spanish general tax act, and it is appreciably lower than the cost of an inspection. We will never tell you that an arguable position is a safe one; we will tell you what the risk is and what it is defended with.
Cáceres: the inheritance value decides the sale of the country house
An heir receives her parents' house in a village in the province and plans to keep letting it at weekends. The reference value set by the Catastro, the land registry's official figure, is 90,000 €; a valuation puts it at 140,000 €, which is what it is really worth. She has 3,000 € of inheritance costs and taxes, and the land makes up 35 % of the cadastral value. Suppose she sells it a few years from now for 180,000 € with 5,000 € of costs:
| Declares 90,000 € | Declares 140,000 € | |
|---|---|---|
| Depreciable base, excluding land | 60,450 € | 92,950 € |
| Maximum annual depreciation, at 3 % | 1,813.50 € | 2,788.50 € |
| Gain on sale, before depreciation | 82,000 € | 32,000 € |
| Savings-base tax on that gain | 17,740 € | 6,600 € |
| Inheritance tax | Whatever results after the Extremadura reduction in force on each base; it is worked out case by case | |
In Spain the value declared for inheritance tax becomes the heir's acquisition cost for the later sale, which is why the choice matters twice. Eleven thousand euros of difference on the sale, plus higher depreciation every year the house is let, set against whatever it costs to declare more for inheritance tax. Sometimes that cost is small thanks to the family reductions, and then declaring the real value is the obvious decision; sometimes it is not. So it is calculated before the inheritance is filed, not when the buyer turns up. The depreciation deducted in the meantime will later reduce that value on the sale, and the table leaves it out so as not to cloud the comparison. The valuation method is in valuing assets in an inheritance.
The calendar of a Cáceres inheritance with a country house
| Deadline | What falls due |
|---|---|
| First five months after the death | Request the extension for inheritance tax, if it will be needed |
| Six months | Inheritance tax before the Junta de Extremadura, the regional government, and the municipal plusvalía on death, extendable to a year if requested |
| While nobody has accepted | The rental income belongs to the undivided estate, not to each heir |
| April to June of the following year | First income tax return with the house in your name, with depreciation calculated on the declared value |
When several siblings inherit, each takes as acquisition value their share of the declared value, and that figure stays with them even if they later buy out the others: the inherited part and the purchased part have different dates and values, and that is how they are calculated on a sale. If the inheritance is still open and you would like us to look at the whole of it, start at tell us about the inheritance.
The province has many country houses let for years after a death without anyone having accepted the inheritance. Meanwhile, that income belongs to the herencia yacente, the estate awaiting acceptance, which is taxed under the income attribution regime: it needs its own tax number, its income is shared among those called to inherit, and it may have to file the annual information return. And the inheritance tax deadline runs from the death, not from the day the family reaches agreement. When the acceptance is finally signed, the usual discovery is several years of undeclared rent and a late inheritance tax return, with its surcharges.