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Form 100. Personal Income Tax Declaration 2019

7,3,6,5. Reduction of irregular returns

The net returns on real estate capital will be reduced by 30 percent when any of the following circumstances occur:

  1. When they have a generation period of more than two years, as long as they are attributed to a single tax period.

    The income that was received in fractions prior to 1-1-2015 with the right to reduction according to the regulations in force as of 12-31-2014, can apply the reduction to each of the fractions that are imputed from 1-1-2015 provided that the quotient resulting from dividing the number of years corresponding to the generation period, computed from date to date, by the number of tax division periods, is greater than two. If these are income derived from commitments acquired before 1-1-2015 that were scheduled to begin to be received in installments in tax periods that begin after that date, the conversion of the payment in installments to a single payment allows apply the reduction whenever the generation period is greater than two years.

  2. When they are legally classified as obtained in a notoriously irregular manner over time.

    The following are exclusively considered income from movable capital obtained in a notoriously irregular manner over time, when they are imputed in a single tax period (art. 15.1 Rgl.):

    • Amounts obtained from the transfer or assignment of the lease contract for business premises.

    • Compensation received from the tenant, subtenant or assignee for damages or defects to the property.

    • Amounts obtained from the constitution or transfer of rights of use or enjoyment of real estate for life.

     This reduction will only be applied to the amount of net income that does not exceed 300,000 euros.

Normally the reduction must be recorded without any sign. However, when the reduction affects a negative net return, it will be preceded by a minus sign (-).