Landlord guide · Rental income and Spanish tax
Rental income tax deductions in Spain for landlords
The rent you receive and the amount you are taxed on are not the same. Find out which expenses you can deduct, which reduction applies to your tenancy agreement and how to work out the figures.
For individuals who are tax resident in Spain and declare rental income as income from property under Spain’s common-regime personal income tax system (IRPF).
01 · Start with the figures
First deduct your expenses. Then apply the reduction.
When people talk about rental tax deductions, they often combine two different concepts. Deductible expenses are used to calculate your net rental income. The residential rental income reduction, if you qualify, is then applied to that positive net income.
A 60% reduction leaves 40% of your net rental income subject to tax. It does not mean the tax authority refunds 60% of your rent or that your tax bill falls by that same percentage.
Some building works may also qualify for deductions from your IRPF tax liability. These are calculated separately, as explained in the section on additional benefits.
Source: AEAT: net income after reductions.
02 · Check your receipts
Which rental expenses can you deduct?
Gather invoices, receipts and supporting documents for each property. Expenses must relate to the rental and be properly documented.
| Expense | What to bear in mind |
|---|---|
| Interest and financing costs | Costs linked to buying or improving the property. The part of a loan repayment that repays the principal is not deductible. |
| Repairs and maintenance | For example, painting or repairing installations to keep them in working order. Extensions and improvements are treated differently. |
| IBI, local charges and community fees | Amounts attributable to the rental, including IBI property tax. Penalties are not deductible expenses. |
| Insurance | Premiums linked to the property and to earning rental income from it. |
| Management and tenancy agreements | Fees for managing the rental, drawing up the agreement and legally defending rights associated with it. |
| Utilities | If you bear and pay the costs yourself. If you then charge them to the tenant, also include that amount as income. |
| Depreciation | Tax depreciation of the property and the furniture let with it. You do not need to have incurred that cash outlay during the year. |
Source: AEAT: deductible expenses and other rental expenses.
Interest and repairs share a deduction limit
The total of interest, other financing costs, repairs and maintenance cannot exceed the gross income from that property for the year. Any excess can be deducted over the following four years, subject to each year’s limit. Any eligible amounts carried forward from previous years are applied before those incurred in the current year.
Source: AEAT: deduction limit for interest and repairs.
What if the property was not rented out all year?
Annual expenses such as IBI, insurance, community fees and interest, as well as depreciation, are apportioned to the days the property was rented out. Periods when it is available for your own use may give rise to imputed property income.
Repairs carried out before letting follow a specific rule: they may be deductible if they are solely intended for a future letting and you can demonstrate that purpose. You should not automatically apportion them in the same way as an annual bill.
Source: AEAT: annual expenses and periods without a tenant and repairs before letting.
03 · An expense that is often overlooked
Depreciation: calculate the property and furniture separately
The property
The maximum annual rate is 3% of the higher of the eligible acquisition cost and the cadastral value, excluding land in both cases. The acquisition cost includes the relevant purchase expenses and taxes.
Adjust the amount to the days the property was rented out and respect the limit on cumulative depreciation.
The furniture
Items let with the property that last more than one year follow their own depreciation table. For furniture and household items, the maximum annual rate is 10%.
Keep invoices and an inventory. Do not apply the property’s 3% rate to furniture.
Source: AEAT: property depreciation and depreciation table.
04 · The agreement date matters
Rental income reductions under IRPF: 50%, 60%, 70% or 90%
Start with the signing date and the actual purpose of the tenancy. These percentages concern homes let to meet the tenant’s permanent housing needs.
Agreement signed before 26 May 2023
60%The previous rules continue to apply to these agreements, provided their requirements are met.
Agreement signed on or after 26 May 2023
50%This is the general reduction. A higher rate may apply if the tenancy falls within one of the following categories.
Source: AEAT: reductions by agreement date.
A new agreement with a rent cut of more than 5%
The same landlord signs a new tenancy agreement for a home in a designated stressed housing market area (zona tensionada) and reduces the initial rent by more than 5% compared with the final rent under the previous agreement, after applying any relevant annual rent adjustment.
A reduction of exactly 5% does not meet this requirement. If the comparison rent is €1,000, the new rent must be below €950.
First letting to young tenants or certain social lettings
One route requires the owner to let that property for the first time, for it to be in a designated stressed housing market area, and for the tenant to be aged 18 to 35. If there are several tenants, the reduction applies proportionately to those who meet the requirements.
Another route covers lettings to public authorities or certain non-profit organisations for social purposes, and homes included in public programmes with capped rents, on the terms set out in law. Letting directly to a vulnerable person is not sufficient on its own.
Qualifying rehabilitation completed in the previous two years
If no higher reduction applies, this rate may be available where work completed in the two years before the tenancy agreement meets the tax definition of rehabilitation under Article 41.1 of the IRPF Regulations.
Replacing windows, painting or renovating a kitchen does not automatically meet this requirement. The scope of the work and its legal classification must be checked.
Source: IRPF Law, Article 23.2, AEAT requirements and tax definition of rehabilitation.
If the property is in Barcelona
Barcelona’s designation as a stressed housing market area took effect on 16 March 2024, with an initial three-year term. Location alone does not qualify you for 70% or 90%: all the requirements and the agreement date must be checked. Failure to comply with Article 17.6 of Spain’s Urban Leases Act (LAU) prevents these reductions from applying.
Source: designation published in the BOE and conditions in Article 23.2.
05 · Catalonia and other benefits
What additional tax benefits may landlords qualify for in Catalonia?
Regional tax deductions: distinguish between landlords and tenants
If you are tax resident in Catalonia, there is no general regional tax deduction for income from an ordinary residential letting. Catalonia’s deduction for rent paid on a main home is for the tenant who meets its requirements.
The regional rehabilitation deduction requires the property to be the taxpayer’s main home. Nor do specific deductions for rural municipalities make renovating a rented flat in Barcelona eligible for a deduction for its owner.
Source: ATC: Catalonia’s regional tax deductions and AEAT list of deductions.
Energy efficiency work can benefit landlords
These deductions apply nationwide, including in Catalonia. The 20% and 40% deductions may be available for a home you own that is let, or intended to be let, for residential use. The 60% deduction concerns work on predominantly residential buildings.
| Rate | Improvement and maximum eligible expenditure |
|---|---|
| 20% | Reduce the home’s combined heating and cooling demand by at least 7%.Maximum eligible expenditure: €5,000 a year. |
| 40% | Reduce the home’s consumption of non-renewable primary energy by at least 30%, or improve its energy rating to A or B.Maximum eligible expenditure: €7,500 a year. |
| 60% | Carry out energy rehabilitation work on the building and demonstrate a reduction of at least 30% in that consumption, or an improved rating of A or B.Maximum eligible expenditure: €5,000 a year and €15,000 in total.Amounts above the annual limit may be carried forward to the next four tax years. |
Sources: AEAT requirements for 20%, 40% and 60%. For the applicable deadlines, see Additional Provision 50 of the IRPF Law.
What to check before starting the work
You need correctly issued and registered energy performance certificates from before and after the work. The earlier certificate must be no more than two years old when work begins. Use bank payment methods, keep invoices and deduct any grants from eligible expenditure. Cash payments and fossil-fuel equipment are excluded.
For the 20% and 40% deductions, the work and payments must fall between 6 October 2021 and 31 December 2026, with the post-work certificate issued before 2027. If the home was intended for letting, it must be let before 31 December 2027.
For the 60% deduction, the deadline for work and payments is 31 December 2027, with the post-work certificate issued before 2028. You cannot claim all three deductions for the same work.
BOE: requirements and deadlines for energy efficiency deductions.
In Barcelona, check IBI property tax relief too
The City Council provides for 95% relief on IBI property tax in qualifying social rental cases, such as homes included in the municipal Rental Housing Pool or other city programmes that meet the conditions. You must apply for it; letting a flat at a capped rent in a stressed housing market area is not enough.
There is also relief for certain voluntary solar installations. These are municipal benefits that reduce IBI, not regional deductions from IRPF.
Source: Barcelona City Council: IBI relief and applications.
06 · A worked example
You charge €1,200 a month. How much is taxable?
Assume the home is rented out all year, has one owner and is not let to a relative. All the expenses in this example are allowable and properly documented.
First, calculate net rental income
- Income: €1,200 × 12 months
- €14,400
- Interest and repairs
- −€1,800
- IBI, community fees and insurance
- −€1,200
- Depreciation calculated for this example
- −€2,400
Net rental income before the reduction
€9,000Then apply the relevant reduction
If the 50% reduction applies
€4,500€9,000 − €4,500 reduction.If the 60% reduction applies
€3,600€9,000 − €5,400 reduction.These figures are income after the reduction, not the tax payable. That income forms part of your general IRPF tax base. Your tax liability depends on your tax return as a whole.
Source: AEAT: calculating net rental income and net income after reductions.
07 · Try your own figures
Rental income calculator
Enter annual income and expenses that you have already checked. Select a reduction after reviewing its requirements in the previous section.
Your calculation results
- Interest and repairs deducted
- Net rental income
- Reduction applied
Rental income after the reduction
The starting figures come from the worked example. This simulation covers one property and one reduction category, with no expenses carried forward from previous years or special rules for relatives or usufruct. It does not calculate your IRPF tax liability, apply energy efficiency tax deductions or validate your expenses.
08 · Frequently asked questions
Questions that come up when preparing your tax return
Do I lose the reduction if I let to a relative?
Not simply because you are related. The reduction can apply if the requirements are met. However, a minimum declarable income applies when the tenant is your spouse or a relative up to the third degree, including relatives by marriage.
The result after reductions is compared with the applicable imputed property income. If it is lower, you declare that minimum instead. Allowing someone to use the property free of charge requires a separate assessment.
Does a temporary letting qualify for the same reduction?
No. The residential rental reduction requires the letting to meet the tenant’s permanent housing needs. Temporary and holiday lettings do not qualify. Allowable expenses may still be deductible under the relevant rules; having no reduction does not mean you are always taxed on all gross income.
Do I only declare rent the tenant has paid?
As a general rule, rent is declared when it becomes due, even if it has not yet been received. Unpaid rent may qualify as a deductible doubtful debt if the conditions are met: for example, the debtor is in insolvency proceedings, or more than six months have passed between the first collection attempt and the end of the tax year, with no renewal of the credit.
If you deduct that debt and later recover it, include it as income in the year you receive payment.
Can I deduct my entire mortgage repayment?
No. Repayment of the loan principal is not a rental expense. Interest and other financing costs linked to buying or improving the property must be assessed and are subject to the combined limit with repairs.
What happens if expenses exceed income?
First apply the limits for each expense. Net rental income may be negative once allowable expenses are deducted. In that case, the residential rental reduction does not apply. Excess interest and repairs have their own carry-forward treatment for the following four years.
AEAT: net rental income and reductions on positive net income.
How is income declared if the property has several owners?
Each owner declares the amount corresponding to their share. If a usufruct exists, the income belongs to the usufructuary—the person entitled to use the property and receive its income—not the bare owner. Check the title deed before allocating income and expenses.
Can I apply a different percentage to each property?
Yes, if the tenancy agreements and circumstances qualify for different reductions. You do not choose one rate for your entire property portfolio or add several reductions to the same income. If agreements or qualifying conditions change during the year, separate the relevant periods and amounts.
09 · Get your paperwork ready
What to keep for an accurate calculation
- Agreement and dates: start date, changes of tenant, rent due and days rented out.
- Expenses: invoices, community fee receipts, IBI, insurance, professional fees and a bank interest statement.
- Depreciation: acquisition deed, expenses and taxes, the cadastral breakdown between land and buildings, an inventory and furniture invoices.
- Reduction: previous agreement and updated rent, tenants’ ages where relevant, and documents for qualifying rehabilitation or the relevant social programme.
Also keep your depreciation history and details of expenses still to be deducted: they may affect later tax years.