Leasing of properties intended for housing
Regulations: Art. 23.2 Law Income Tax
Reduction 60%
In the case leasing real estate for residential purposes, the positive net income, calculated by the difference between the total gross income and the necessary expenses that are considered deductible in the terms discussed above will reduced by 60 , regardless of the age of the tenant.
Delimitation:
It is considered that this is a lease of a property intended for housing when, in accordance with the provisions of article 2 of Law 29/1994, of November 24, on Urban Leases (LAU), the lease falls on "a habitable building whose primary purpose is to satisfy the permanent housing need of the tenant."
For its part, it must be taken into account that article 3 of the LAU provides that "a lease for use other than housing is considered to be a lease that, falling on a building, has as its primary purpose a purpose other than that established in the previous article." He added that "in particular, this consideration will be given to urban property leases made for the season, be it summer or any other season." Therefore, in no case will the indicated reduction be applicable when the property is leased for a season, be it summer or any other.
The reduction will be applicable to the net income derived from the leasing of real estate when the tenant is a legal entity, and it is proven that the property is intended for the housing of certain natural persons (Criterion established by the Central Economic-Administrative Court, in its Resolution of September 8, 2016, in an extraordinary appeal for the unification of criteria).
The reduction will only be applicable to the income declared by the taxpayer.
Tourist rentals:
The 60% reduction provided for in article 23.2 of the Personal Income Tax Law is not applicable to tourist rentals, since their purpose is not to satisfy a permanent housing need but rather to cover a temporary need. See in this regard the Resolution of the Central Economic-Administrative Court (TEAC), of March 8, 2018, in unification of criteria.
On the other hand, in relation to article 54 ter of the General Regulation of the actions and procedures of tax management and inspection and of the development of the common rules of the procedures for the application of taxes, approved by Royal Decree 1065/2007, of July 27, which regulated the obligation to inform about the transfer of use of homes for tourist purposes, it should be noted that the Judgment of July 23, 2020 of the Third Chamber of the Supreme Court (contentious-administrative appeal number 80/2018) published in the BOE of September 23, 2020, annuls it and leaves it without effect because it is contrary to law, therefore the aforementioned obligation to inform disappears.