Letting by Residents.
Residents who engage in tourist related business activities are eligible for privileged treatment under the ‘Simplified Regime’. If you let out furnished accommodation to tourists on a short-term basis, you are only taxed on 20% of your invoiced income and enjoy an 80% exclusion.

Beware, however, that there are additional requirements, such as IVA reporting (when income exceeds €610,000 per annum!) and social security deductions from the second year of business. All in all, although there are a few hurdles to overcome, this mode of business operation can be highly advantageous and being fully compliant usually means only a very modest tax burden.

Furthermore, recent legislation states that anyone earning income from rented property must hold a Rental Licence to do so. There are different licences to be obtained, based on size, number of rooms, and frequency/type of occupation, for example, whether the property is rented on a long-term basis, is in a tourist complex for short-term rentals or is a guest house. Whilst this recent issue has caused concern amongst some property owners, you should note that you will in fact be better off than before; after a one-off expense for obtaining the licence, annual tax savings could be thousands of Euros each year. Unfortunately, as this law is in the early stages, the local town halls do not yet have the procedure in place to issue licences, but you must be aware that this will no doubt soon come into effect.