--- title: "Holiday Rental Tax in Lanzarote: The Complete Guide for Property Owners (2026) | Accounting Spain" description: "Everything non-resident landlords need to know about Modelo 210, IGIC, EU vs non-EU rates, the annual filing deadline and the Canary Islands-specific rules that mainland guides miss." canonical_url: "https://www.accountingspain.com/en/blog/holiday-rental-tax-lanzarote/" last_updated: "2026-06-02" --- [Home](/en/) / [Blog](/en/blog/) / Holiday Rental Tax in Lanzarote: The Complete Guide for Property Owners (2026) Property owners # Holiday Rental Tax in Lanzarote: The Complete Guide for Property Owners (2026) EN Property 2026 edition · 12 min read If you own a property in Lanzarote — whether it's a villa in Puerto del Carmen, an apartment in Playa Blanca, or a house in the rural interior — and you rent it out to holidaymakers, you have tax obligations in Spain. Many owners are unaware of the full picture. Some believe that because they don't live in Spain, Spanish tax doesn't apply to them. ## The Basic Rule: All Rental Income from Spanish Property Is Taxable in Spain It doesn't matter where you live. Whether you're based in London, Amsterdam, Berlin, or Dublin, if your Lanzarote property generates rental income, Spain has the legal right to tax that income. This is governed by the **Non-Resident Income Tax (IRNR — Impuesto sobre la Renta de No Residentes)**, and the filing is done through **Modelo 210**. **Key point:** Platforms like Airbnb and Booking.com now report your rental income directly to the Spanish Tax Agency (AEAT) via Modelo 179. There is no hiding rental income. The authorities already know about it. ## Your Tax Rate Depends on Where You Live The rate you pay on Lanzarote rental income depends on your country of residence: ResidencyRateExpense DeductionsEU/EEA resident (Germany, Netherlands, France, etc.)**19%** on net income✅ Yes — deduct eligible costsNon-EU resident (UK post-Brexit, USA, Canada, etc.)**24%** on gross income❌ No deductions permitted This difference is significant. A British owner earning €20,000 in annual rental income pays 24% on the full €20,000 (€4,800). A German owner earning the same amount can deduct eligible expenses first — reducing their taxable base considerably. **Important 2025 update:** A July 2025 ruling by Spain's Audiencia Nacional found the 24% gross income treatment of non-EU residents potentially discriminatory under EU law. The case is under appeal, but if upheld, non-EU owners may be entitled to deduct expenses retroactively. **Keep all your invoices for maintenance, management fees, cleaning, and repairs.** ## What Expenses Can EU Residents Deduct? If you are an EU/EEA resident, you can deduct expenses **proportional to the number of days the property was rented out**. Common deductible expenses include: - **Property management fees** (the agency taking a percentage of your rental income) - **Cleaning and laundry costs** - **Repairs and maintenance** (not capital improvements) - **IBI (local property tax / rates)** - **Building insurance** - **Mortgage interest** on a loan used to purchase the property - **Depreciation** — 3% of the acquisition cost of the building (excluding land value) - **Utilities** (electricity, water, internet) if paid by the owner The proportional calculation works like this: if your property was rented for 90 days out of 365, only 90/365 (24.7%) of annual costs are deductible. ## The Canary Islands Difference: IGIC Instead of IVA This is where Lanzarote rental owners frequently get caught out. On the Spanish mainland, short-term holiday rentals involving hotel-like services (cleaning on departure, linen changes, etc.) are subject to IVA at 10%. In the **Canary Islands, IVA does not apply**. Instead, the local equivalent is **IGIC (Impuesto General Indirecto Canario)**. For holiday rentals in Lanzarote that include services: - **Standard IGIC rate: 7%** (significantly lower than mainland IVA) - You must register as a taxable person for IGIC purposes - You must file quarterly **IGIC returns (Modelo 420/421)** - You must include IGIC in your advertised prices or add it separately If your rental is "passive" — that is, you simply let the property without providing any services, and a management agency handles everything — you may not need to charge IGIC. However, the line between "passive letting" and "service provision" is not always clear, and the AEAT is increasingly scrutinising this. ## The Annual Filing: Modelo 210 Since 1 January 2024, non-resident landlords no longer file quarterly Modelo 210 returns for rental income. The process has been simplified to a **single annual return**. **Key dates:** FilingDeadlineRental income from previous year (Modelo 210)**1–20 January** of the following yearIf using direct debit payment**By 15 January**Imputed income (if property not rented / vacant periods)**By 31 December** of the following year **Example:** Rental income earned during all of 2025 must be declared and paid by 20 January 2026. ### What if the property is empty for some months? Even during periods when your property is not rented out and not in personal use, you still owe Spanish tax. This is called **imputed income tax (renta imputada)** and is based on 1.1% or 2% of your property's cadastral value (valor catastral), depending on when the cadastral value was last updated. The resulting imputed income is then taxed at your applicable non-resident rate (19% or 24%). ## The Tourist Licence: A Legal Requirement Before You Rent You cannot legally rent your Lanzarote property to tourists without first obtaining a **Tourist Rental Licence (Vivienda Vacacional)**. In the Canary Islands, this is regulated at the regional level. Requirements include: - The property must meet minimum habitability standards - It must be registered with the Canary Islands Tourism Registry - It must be assigned a registration number displayed on all platforms Since 2024, there is also a new national requirement to register short-term rentals in the **Registro Único** (National Rental Registry) before listing on platforms like Airbnb or Booking.com. Renting without a licence exposes you to fines from regional tourism authorities, which can be substantial — and platforms are now increasingly required to verify licence numbers before allowing listings. ## The IBI and Basura: Annual Local Taxes Regardless of whether you rent your property or not, as a property owner in Lanzarote you must pay two annual local taxes: - **IBI (Impuesto sobre Bienes Inmuebles):** The equivalent of council tax in the UK. Based on the cadastral value of your property. Paid annually. - **Basura (waste collection tax):** A contribution to local rubbish collection services. These are billed by the local ayuntamiento (municipality — Arrecife, Tías, Yaiza, etc.) and are typically collected via direct debit if you have a Spanish bank account. Non-payment accumulates surcharges and can eventually lead to enforcement action. ## Capital Gains Tax When You Sell When you eventually sell your Lanzarote property, you will be subject to **Capital Gains Tax (CGT)** on any profit. - **Rate for non-residents:** 19% on the gain (regardless of EU or non-EU status) - **At the point of sale:** The buyer's solicitor typically withholds **3% of the sale price** and pays it to the AEAT as an advance payment of your CGT - After the sale, you (or your advisor) calculate the exact amount owed. If the 3% withholding exceeds your actual liability, you can claim a refund. If it falls short, you pay the balance. The gain is calculated as: **sale price minus purchase price**, adjusted for documented improvement costs, purchase taxes paid, and selling costs (agent fees, legal fees, etc.). ## Common Mistakes Made by Lanzarote Property Owners **1. Not filing at all** The AEAT now receives rental data directly from Airbnb, Booking.com, and other platforms. Non-filers are increasingly identified and pursued. **2. Only filing for months the property was rented** You must also file for periods when the property was vacant (imputed income). Many owners are surprised to receive tax demands years later. **3. Not registering for IGIC** Owners providing even basic services (cleaning at changeover, fresh linen) may be required to register for and charge IGIC. **4. Missing the January 20 deadline** Late filing attracts immediate surcharges of 5–20% plus interest, even if the underlying tax is modest. **5. Assuming the management agency handles everything** Property management companies handle bookings and maintenance. They do not file your Spanish tax returns. That remains your responsibility (or your tax advisor's). ## How Accounting Spain Helps Holiday Rental Owners We specialise in the full fiscal management of holiday rental properties in the Canary Islands, for owners based anywhere in the world. Our services include: - **Modelo 210 preparation and filing** — annual rental income declarations - **IGIC registration and quarterly returns** — where applicable - **IBI and basura monitoring** — ensuring local taxes are paid on time - **Tourist licence guidance** — connecting you with the right regional process - **Capital gains calculation and filing** — when you sell - **Retroactive regularisation** — if you haven't been filing and need to catch up All services are delivered in English, 100% online. No need to visit an office in Lanzarote or Spain. ## Frequently Asked Questions Does Airbnb pay my Spanish taxes for me? No. Airbnb deducts its service fees and pays you the rental income. It also reports your earnings to the Spanish Tax Agency. You are still personally responsible for filing and paying your Spanish tax. I'm British — does Brexit affect my tax rate? Yes. Since Brexit, UK residents are treated as non-EU residents and pay 24% on gross rental income (no expense deductions). EU residents pay 19% on net income. A pending court ruling may change this, but for now the difference stands. What if I've been renting and haven't filed anything? It is possible to regularise your position voluntarily. The AEAT has become increasingly active in pursuing non-filers, so proactive disclosure is always better than waiting. Contact us for a confidential assessment of your situation. Do I need a Spanish bank account? It is not legally required, but it makes managing local taxes, IBI payments, and utility bills significantly simpler. We can advise on this as part of our onboarding process. Get started ### Your taxes, *handled in English.* First consultation is free, with no commitment. Tell us your situation and we will map your obligations and identify your savings. [Request free consultation](/en/lanzarote/#contact) This article is for general informational purposes only and does not constitute personalised tax or legal advice. Tax rules change frequently. Always consult a qualified advisor for your specific situation. Free consultation ### Your taxes, handled in English First consultation free. We respond within 48 hours. [Book consultation →](/en/lanzarote/#contact) In this article - The Basic Rule: All Rental Income from Spanish Property Is Taxable in Spain - Your Tax Rate Depends on Where You Live - What Expenses Can EU Residents Deduct? - The Canary Islands Difference: IGIC Instead of IVA - The Annual Filing: Modelo 210 - The Tourist Licence: A Legal Requirement Before You Rent - The IBI and Basura: Annual Local Taxes - Capital Gains Tax When You Sell - Common Mistakes Made by Lanzarote Property Owners - How Accounting Spain Helps Holiday Rental Owners Related guides [ExpatsComplete Tax Guide for Expats](/en/blog/expat-tax-guide-lanzarote/)[BusinessBusiness & Freelance Setup](/en/blog/freelancer-business-setup-lanzarote/)[PracticalHow to Get Your NIE Number](/en/blog/nie-number-lanzarote-guide/) Tax alerts Get notified when new guides are published and receive key Spanish tax deadline reminders. No spam. Unsubscribe anytime. ~2 emails/month. 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