Leasing of tourist accommodation as an economic activity

Leasing of tourist accommodation as an economic activity

From a tax point of view, it is very important to know whether the letting of a holiday home is considered an economic activity or not. This is especially important from a VAT point of view.

If the tourist rental is considered an economic activity, any VAT paid on the purchase of the property can be deducted, as well as the VAT on any invoices for expenses related to the rental.

In recent years there has been an increasingly significant increase in the use of private accommodation for tourism, which is known as tourist rental and must be differentiated from the services provided by the hotel industry.

The Directorate-General for Taxation points out that the concept of “complementary services typical of the hotel industry”, the LIVA gives as examples restaurant, cleaning, laundry and other similar services.

In addition to the aforementioned, cleaning services of the interior of the flat, as well as linen change services in the flat, both provided on a regular basis, are considered to be complementary services typical of the hotel industry.

The following services are NOT considered to be complementary services typical of the hotel industry:

– Cleaning service of the flat provided at the entrance and exit of the period contracted by each tenant.

– Linen change service in the flat.

– Cleaning service for the communal areas of the building (entrance hall, stairs and lifts) as well as the urbanisation in which it is located (green areas, access gates, pavements and streets).

– Technical assistance and maintenance services for eventual repairs of plumbing, electricity, glass, blinds, locks and electrical appliances.

Consequently, it could be interesting for an owner who rents out properties for tourist purposes to consider converting it into an economic activity.

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