Modelo 400
Required to operate a holiday rental in the Canary Islands — and to apply for a VV License.
What is the Modelo 400?
The Modelo 400 is an agreement with the Canarian government that commits you to charge and pay IGIC — the Canarian equivalent of VAT. IGIC is levied at 7% (compared to 20% UK VAT or 21% mainland Spanish IVA).
A VV License (Vivienda Vacacional) cannot be applied for without a Modelo 400.
Important change from January 2024
Before 2024, non-resident owners with revenue under €30,000 did not need to charge IGIC. From 1 January 2024, this exemption no longer exists. All bookings must now include IGIC regardless of revenue. Once a Modelo 400 is issued, you are legally required to pay IGIC quarterly via Modelo 420. Speak to your Spanish accountant before proceeding — this is a serious financial commitment.
Non-Resident Tax in the Canaries
EU fiscal residents
Fiscal residents of EU countries (including Iceland, Norway, and Liechtenstein) can deduct eligible expenses and pay 19% of net profit in tax.
Non-EU fiscal residents
Fiscal residents of non-EU countries cannot deduct any expenses and pay 24% of gross income.
Deductible Expenses (EU residents only)
Expenses are deducted pro-rata based on the proportion of nights rented in the calendar year. For example, if you rented 182 out of 365 nights, you can deduct 50% of your eligible expenses.
- Costs associated with repairs and conservation of the property
- Interest on a Spanish-registered mortgage loan
- Council tax (IBI/SUMA)
- Utility bills (water, electricity, etc.)
- Personal services (cleaning, property management, etc.)
Worked Example (EU resident)
60 nights rented out of 90 in Q1. Revenue: €1,000. Total eligible costs: €200.
Rental proportion: 60 ÷ 90 = 66.67%
Deductible costs: €200 × 66.67% = €133.34
Taxable income: €1,000 − €133.34 = €866.66
Tax due (19%): €866.66 × 19% = €164.67
Note: This example does not include any IGIC owed.
Quarterly Modelo 420 Deadlines
Once you have a Modelo 400, you must file Modelo 420 quarterly via your Spanish accountant.
| Rental period | Filing deadline |
|---|---|
| Oct – Dec | 1–6 January |
| Jan – Mar | 1–6 April |
| Apr – Jun | 1–6 July |
| Jul – Sep | 1–6 October |
Need help with your Modelo 400?
Villa Check In can apply for your Modelo 400 on your behalf. The service costs €150 + IGIC. Contact us to get started.