Nuria rents an office for 1,000 € a month. The landlord sends her an invoice with VAT and no withholding, and says "it has always been done this way". As a general rule, Nuria must withhold part of the rent, pay it in through Modelo 115 and declare the annual summary on Modelo 180. The landlord does not freely decide whether the invoice carries withholding: it is only left off when a legal exception applies, and it is worth keeping the proof.
How the withholding works
The withholding in force is applied to the rent and the other items that form part of the consideration, excluding VAT. It is not calculated on the deposit. The landlord charges VAT where it applies and the tenant deducts the withholding from the money paid to the landlord.
Nuria's monthly rent
| Item | Amount |
|---|---|
| Rent of the premises | 1,000 € |
| VAT at 21 % | +210 € |
| Withholding at 19 % | −190 € |
| Transfer to the landlord | 1,020 € |
The landlord issues an invoice totalling 1,210 € and you transfer 1,020 €. You pay the remaining 190 € to Hacienda, the tax office, on the landlord's behalf. For you, the withholding is neither a discount on the rent nor income: it is a temporary debt to the tax office.
Modelo 115 and Modelo 180
Modelo 115 reports, quarterly or monthly depending on your period, the bases and withholdings on urban rents. Quarterly filers normally file it during the first twenty days of April, July, October and January, with the special rules on direct debit and the calendar of each year.
Modelo 180 is the annual summary. It identifies the recipients and the properties and must match the sum of the 115 returns. You also give the landlord the withholding certificate so that they can subtract the withholdings in their own tax.
You can send the contract, the invoices and the landlord's certificate through the self-employed form. The obligation is decided on those documents and the current situation, not on a sentence printed on the invoice.
The obligation is reported to the tax register on Modelo 036. If the contract starts or ends, check the date of registration or deregistration; simply stopping filing the 115 is not enough while the register still shows you as a withholder.
The exceptions in article 75.3.g) of the income tax regulations
No withholding is made, among other cases, when:
- a company rents a home for its employees;
- the rent paid by the same tenant to the same landlord does not exceed 900 € a year, excluding VAT;
- the landlord is registered under group 861 of the IAE (the Spanish business activity classification), or another heading that covers urban letting, and applying the group 861 rules to the cadastral value of their properties does not produce a zero tax.
The IAE exception is not the same as the landlord saying they are "registered". They must meet the tax requirement and can prove it with the specific tax certificate, which is valid for the calendar year as long as their situation does not change. Ask for an up-to-date certificate and keep it.
Nor should you confuse renting a home for an employee with renting an office, or with a home the self-employed person partly uses for work. In that last case, the contract and the business use may need analysing, as well as the rules for deducting working from home.
If you have gone years without withholding
The obligation to pay in falls on the tenant as withholder. The fact that the landlord declared all the rent does not automatically make the invoices correct or remove your formal obligations. Each period has to be reviewed: contract, invoices, payments and the recipient's returns.
The first step is to establish from when the obligation existed and whether a proven exception applied. Then quantify the missing 115 and 180 returns, the possible surcharges or penalties, and how to correct certificates and invoices. Putting things right voluntarily before a formal request usually receives different treatment from a failure discovered by Hacienda, but it is not wise to file figures that have not been reconciled.
Nor should you deduct all the old withholdings from a current month's rent without agreement and without reviewing the contract. The tax relationship and the civil debt with the landlord have to be dealt with in a coordinated way.
A monthly routine
File the contract, rent reviews, invoices, the exemption certificate if there is one, payment receipts, the 115s, the 180 and the annual certificate. Enter the invoice in the books of expenses and invoices received, separating base, VAT and withholding. If the invoice is wrong, ask for it to be corrected and see how a corrective invoice works.
Which items make up the base
The contract may separate rent, community charges, IBI passed on (the annual municipal property tax), services and other items. To calculate the withholding, taking the line called "rent" is not enough: the amounts paid to the landlord as consideration may form part of the base, excluding VAT. Genuine outlays require the payment to be made in the tenant's name and on the tenant's behalf, and to be documented.
Example: rent of 1,000 € and 100 € a month of charges passed on that form part of the consideration. If the withholding base is 1,100 €, applying 19 % only to 1,000 € leaves 19 € unpaid each month. The contract and the invoice have to be read to classify each item.
| Review | Risk if it is skipped |
|---|---|
| Full contractual base | Withholding lower than due |
| VAT kept separate | Wrongly withholding on the VAT |
| Date of payment or when the rent falls due | Declaring in the wrong period |
| Exemption certificate | Leaving out withholding with no proof |
Rent-free months and rent reviews
A rent-free period does not always mean there is no consideration. If the tenant carries out works in exchange, there may be rent in kind or a transaction that needs valuing. Nor should the old base be kept after an inflation-linked review or a renegotiation.
Review the invoices when the year changes and when the contract is amended. The landlord's exemption certificate refers to the calendar year and their situation; keeping an old one does not prove the exception indefinitely.
A nil 115 and the end of the lease
If during a quarter you are still registered as a withholder but pay no rent, the formal obligation that applies has to be established; do not copy a zero without checking the register. When the lease ends, file what is outstanding, include the recipient in the annual 180 and report deregistration if you will no longer pay rents subject to withholding.
The deposit returned at the end is not monthly rent, nor is it a withholding base merely because it is repaid. If it is applied to unpaid months or to compensation, the treatment depends on the agreement and must be documented.
Keeping in step with the landlord
The annual certificate must match what was actually paid in. If the landlord included in their return a withholding you did not pay, that discrepancy can lead to checks on both of you. Hand over the certificate after reconciling the 115s, not by copying the invoices without checking what was paid in.
At Salama Tax we can review the contract and the outstanding obligations of the self-employed tenant.
Before each 115, reconcile the rents due or paid with the invoices and transfers. If a month's rent is disputed, document whether it was paid, offset or left outstanding. The withholding follows its own timing and should not be adjusted just because the bank balance for the quarter looks lower.
Also keep the notices of rent reviews and the certificate given to the recipient. That chain lets you explain why the base changed during the year and makes the 180 match each quarter.