Tax and accounting in Toledo

Many visitors, few nights: what that does to the numbers

Real occupancy for a holiday flat in the old town is short and uneven: weekends, long weekends, feast days and not much midweek. The classic mistake is to work out the yield on the nightly rate and forget how many nights there genuinely are. In tax terms that gap has a name: the days on which the property is not let are not neutral, they are imputed.

That imputed figure is computed on the valor catastral of the property and appears in your return even in a month when nothing came in. So the sum to do in Toledo before deciding anything is a sum of days: how many you let, how many you keep for yourself, how many the flat simply sits shut. From that same count come both the income you declare and the share of costs you may deduct.

For a reader coming to this from another country, imputed income is the piece that most needs explaining. Spanish law treats a property you keep available for yourself as producing a notional income, worked out from its rateable value, and that figure goes into the return even though nobody paid you a thing. It is not a fine for leaving the flat shut, and it does not go away because you never advertised it that month.

When holiday letting does not pay and season lets appear

With weekend-only occupancy, many owners end up putting the flat to another use: students during the academic year, workers posted here for a few months, season contracts. It is a reasonable decision, but it is not merely a change of tenant: it changes the whole regime.

Letting a dwelling without hotel services is exempt from VAT under article 20.Uno.23 of the Spanish VAT Act, and in income tax the profit may qualify for the reduction granted to lettings used as a home, whose scope depends on the type of contract and on the situation of the property after the last reform. We give no percentage here: it is checked with the contract in hand, because it is not the same in every case and getting it wrong shows up in the bill. You have it in the comparison holiday let or season let.

The second home of someone who works in Madrid

The other half of what reaches us from Toledo is not tourism at all: it is people with a house here and a working life in Madrid, or the other way round. Two questions follow. First, where your tax residence sits, which is not settled by the padrón municipal register but by days of presence and the centre of your economic interests, with all that this implies for the regional slice of income tax. Second, what happens to a property that is not your main home: imputed income for as long as you hold it, and a capital gain on the day you sell without the reinvestment relief, which protects only a main home.

Anyone thinking of selling and buying something else should look at this before signing, not after: the conditions for the relief are either met at the moment of the transaction or they are not, and there is no retrospective repair. It is developed in reinvesting in a main home.

Who writes to us from Toledo

Who	What they usually bring
Owner of a holiday flat in the old town	Weekend occupancy, costs apportioned by days, and imputed income for the days it is shut
Owner letting to students during term	Season contract, VAT exemption and whichever reduction of the profit applies
Family with a house here and work in Madrid	Effective tax residence, and which region collects their slice of income tax
Guide, craftsman or shop in the old town	Tax registration, quarterly returns and brutally seasonal cash flow
Heir to a property in the province	Inheritance tax, the reference value and imputed income while the house waits for a buyer

Our way of working in Toledo

With no office for you to visit and no papers to print. You leave whatever reaches you in your folder, or forward it by email; we put it in order and hand you the figures before anything is filed, so that you can see where each number came from. If what has arrived is a letter from the tax office, the deadline comes first and the substance second: answering the tax office in time avoids half the trouble we see.

We write in Spanish, English and French, and we work as lawyers: we tell you what is solid, what is arguable and what will not stand up, even when the comfortable answer would have been another one.

Selling the Toledo house that was not your main home

A family living in Madrid bought a house in Toledo in 2009 for 150,000 €, with 9,000 € of notary, land registry and purchase taxes. It was let on a long-term contract from 2015 to 2019, and 2,700 € of depreciation was deducted in each of those five years. In 2026 they sell it for 240,000 € and pay 7,000 € between the estate agent's commission and the plusvalía municipal, the town hall's tax on the increase in land value. This is how the figure to declare is worked out:

Step	Amount	Why
Transfer value	233,000 €	Price less the costs of the sale
Acquisition value	159,000 €	Purchase price plus its costs and taxes
Depreciation for the let years	−13,500 €	5 × 2,700 €: they reduce what the house cost
Adjusted acquisition value	145,500 €
Capital gain	87,500 €	Savings income base, with no rollover relief
Tax if the house has one owner	19,005 €	19 % up to 6,000 €, 21 % up to 50,000 € and 23 % on the rest
Tax if it belongs to both spouses in equal shares	18,135 €	Each declares 43,750 € and runs through the lower bands separately

Spain taxes gains in a separate "savings" base with its own progressive bands, which is why splitting ownership lowers the bill. The house was bought in 2009, so the old reduction coefficients that shelter part of the gain on long-held property do not come into play. And because the sellers are resident in Spain, the buyer withholds nothing: the 3 % of Modelo 211 applies only to non-resident sellers.

Had they made a loss instead, because they bought at the top and sell at a bad moment, the loss is not thrown away: it is set against other savings gains of the same year and whatever is left over in the following four. For anyone holding funds or shares they intend to sell, that decides which year is the right one to do it.

The Toledo sale, month by month

Moment	What is due
Signing at the notary	Keep the 2009 purchase deed, the invoices for the costs and those for improvements: without them the acquisition value falls short
Thirty working days from signing	Plusvalía municipal before Toledo town hall, using whichever calculation method gives the lower figure; how it is filed is checked in the local by-law
April to June of the following year	Income tax return with the gain
By 30 June	First instalment, 60 %, if payment is split in two
By 5 November	Second instalment, the remaining 40 %

If the tax does not fit into those two instalments, a deferral can be requested within the voluntary period, which is cheaper than waiting for the enforcement surcharges. And if you would like us to check the plusvalía figure before paying it, the form is at work out your plusvalía.