Home renting and tax deductions in the 2018 tax declaration

In April, Spanish taxpayers have to file their tax declarations. Regarding home renting, if you rent your home, remember that most autonomous regions of Spain (all in fact, except for Murcia) offer tax relief to tenants.

A state tax deduction is also available if the lease was signed before 1 January 2015. This deduction is 10.05% of the amount paid in rent, provided the taxpayer’s taxable income is below 24,020 euros.

Returning to the tax deductions offered by Spain’s autonomous regions, we provide details of some of these below:

1. Tax deductions | Madrid

The tax deductions established by the autonomous region of Madrid for the 2018 tax declaration are:

• Tenants below the age of 35 can deduct 30%, capped at 1,000 euros, provided they earn less than 25,620 euros a year or 36,200 euros if they file a joint tax return.
• Tenants older than 35 but younger than 40 can also benefit from these tax credits, provided they have been registered as unemployed for at least 183 days and have at least two family members in their care.

The amount payable in rent must exceed 20% of the taxpayer’s income. Also, the tenant must lodge a deposit with the corresponding regional body and record the landlord’s tax identification number in box 1122 of the tax declaration form and, if there is a second owner, their tax identification number in box 1125.

2. Tax deductions for home renting | Catalonia

In Catalonia, the tax deduction for the 2018 tax declaration is 10%, with a limit of 300 euros a year, always provided the following requirements are met:

• The tenant must be younger than 32 years old, and have annual income of less than 20,000 euros (30,000 euros for a joint tax return).
• The tenant must has been unemployed for at least 183 days in 2018, have a level of disability of over 65% or be a widow/er of 65 years old or older.
• The rental payment must exceed 10% of the taxpayer’s income.
• The landlord’s tax identification number must be provided in box 1122 of the tax declaration form, and if there is a second landlord, their tax identification number in box 1125.

The annual maximum limit is 600 euros, always provided that on the date of accrual of the tax the taxpayer has at least three children.

3. Tax deductions for home renting |Galicia

In Galicia, the deduction established by the regional government for the 2018 tax declaration amounts to 10% of the rent paid in 2018, with a cap of 300 euros per year and lease.

If the tenant has at least two minors in their care, the maximum amount increases to 600 euros with a 20% deduction. Also, if there is any disability, the amounts are doubled.

The conditions that must be met in order to apply this deduction are:

• One of the tenants must be 35 years old or younger.
• The lease must have been signed subsequently to 1 January 2003.
• A deposit must have been lodged with the Instituto Gallego de la Vivienda y Suelo (regional housing and land authority).
• The sum of the general and savings taxable income less the personal and family minimum must not exceed 22,000 euros, either in individual or joint tax payments.
• The landlord’s tax identification number must be provided in box 1122 of the tax declaration form, and, if there is a second landlord, their tax identification number in box 1125.

4. Tax deductions for home renting | Valencia

This autonomous region establishes different tax deductions depending on the tenant’s characteristics. The general deduction is 15% of the amounts paid in rent with a limit of 550 euros, in addition to the deductions outlined below, always provided the following requirements are met:

• A deduction of 20%, up to 700 euros a year, for persons younger than 35 or with a 65% physical or sensory disability or an intellectual disability of 33% or more.
• A deduction of 25%, up to 850 euros a year, for persons younger than 35 with a 65% physical or sensory disability or an intellectual disability of 33% or more.

However, there are a number of other requirements such as the lease must be for at least a year and must have been signed after April 1998; the property must be for habitual use; the deposit must have been lodged with the corresponding regional authority; none of the tenants can be the real or beneficial owner of a property less than 100 kilometres from the rental property; and the tenant must not obtain tax deductions for investment in their habitual home.

Also, the sum of the general and savings tax payable must not exceed 30,000 euros in individual tax payment or 50,000 euros in joint tax payment (consult boxes 0500 and 0510 of page 15 of the tax declaration form filed in 2019) and the tax identification number of the tenant must be included in box 1122 of the tax declaration form. If there is a second landlord, their tax identification number must be recorded in box 1125.

Also, there is a different deduction for tenants renting a property for carrying out an activity, on their own behalf or on behalf of a third party, in a different municipality. This deduction is for 10% of the amount of rent paid with an annual limit of 204 euros.

In order to benefit from this relief, the property must be over 100 kms from where the tenant lived immediately before renting it, a deposit must have been lodged with the corresponding authority, the rent must not be paid by the company, and the sum of the general and savings tax payable must be no more than 30,000 euros or 50,000 in the event of a joint declaration.

Testa Residencial, home renting expert, hopes this information has been useful and, if you are thinking of changing your rental property, why not take a look at our offer?

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