Other expenses necessary to obtain returns

Regulations: Articles 23.1 a) 2 to 4 Law IRPF and 13 b) ag) Regulation

1. Taxes, surcharges and fees

   Non-state taxes and surcharges, as well as state fees and surcharges, are deductible, such as, for example, property tax, cleaning fees, garbage collection, lighting, etc., provided that:

   1. They affect the computed returns or the assets or rights that produce them.
   2. They are not of a punitive nature.

2. Amounts accrued by third parties as a result of personal services

   Amounts accrued by third parties as direct or indirect compensation or as a result of personal services, such as administration, surveillance, concierge, garden care, etc. ## are deductible.

   In particular, the fees of the community of owners when it comes to properties under a horizontal property regime.

3. Contract formalization and legal defense costs

   Expenses incurred by the formalization of the lease, sublease, transfer or establishment of the right and those of legal defense related to the assets, rights or income are deductible.

4. Doubtful debts

   Doubtful debts are deductible, provided that this circumstance is sufficiently justified. This circumstance is considered sufficiently justified:

   1. When the debtor is in a situation of bankruptcy.
   2. When more than six months have elapsed between the time of the first collection action carried out by the taxpayer and the end of the tax period, and no credit renewal has occurred.

   When a doubtful balance is collected after its deduction, it will be computed as income in the year in which said collection occurs.

5. Insurance contract premiums

   The premiums for insurance contracts, whether for civil liability, fire, theft, glass breakage or others of a similar nature on the assets or rights that produce the income are deductible.

6. Services or supplies

   Amounts used for services or supplies (water, electricity, gas, internet, etc.) are deductible.

   These expenses will only be deductible to the extent that they are effectively borne and paid by the lessor , such that if it were the lessee who pays and bears them, the lessor could not deduct any amount. However, it must be taken into account that, if the amounts of these expenses are passed on to the tenant, they will be computed as full income from the real estate capital, being in turn deductible from said income.

7. Other necessary tax-deductible expenses

   In addition to the concepts specifically listed above, any other expenses are considered tax deductible provided they are necessary to obtain the corresponding income.