Return on real estate property

Deductible expenses for determining net income

Doubtful debts

Article 15 of Royal Decree-Law 35/2020, of December 22, on urgent measures to support the tourism, hospitality and commerce sectors and in tax matters ( BOE of the 23rd), reduces in the years 2020 and 2021 from six to three months the period for the amounts owed by tenants to be considered as doubtful collection balances and to be deductible from the gross income of real estate capital.

The possibility of modifying this period by regulation is also established.

Reduction in rental income for the rental of premises to certain entrepreneurs during the 2021 tax period

Article 13 of Royal Decree-Law 35/2020, of December 22, on urgent measures to support the tourism, hospitality and commerce sector and in tax matters ( BOE of the 23rd), has added a new forty-ninth Additional Provision to the Personal Income Tax Law , which allows landlords other than "large holders" who have signed a rental contract for use other than housing and whose tenants use the property for the development of an economic activity, to compute as a deductible expense from real estate capital income the amount of the reduction in the rental income that they had voluntarily agreed upon as of March 14, 2020, corresponding to the monthly payments accrued in the months of January, February and March 2021, when it comes to rentals of premises made to certain businessmen, provided that they are met the requirements demanded by the standard.

Amounts allocated to amortization: Properties acquired free of charge

The Supreme Court in Judgment No. 1130/2021, dated September , has established as an interpretative criterion that, for the purposes of determining the depreciation applicable in the case of real estate acquired free of charge by inheritance or donation, the acquisition cost paid will be the value of the property acquired in application of the rules on Inheritance or Gift Tax or its value verified in these taxes (excluding the value of the land from the calculation), plus the expenses and taxes inherent to the acquisition that correspond to the construction and, where appropriate, all the investments and improvements made to the acquired assets.

Net performance reductions

Reduction for leasing of properties intended for housing

Article 3.Two of Law 11/2021, of July 9, on measures to prevent and combat tax fraud, with effect from July 11 2021, amended article 23.2 of the Income Tax Law to clarify the wording of the reduction for the leasing of real estate used as housing, so that said reduction can only be applied to the positive net income calculated by the taxpayer in his or her return-settlement or self-assessment, without its application to the positive net income calculated during the processing of a verification procedure.