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Practical manual for Income Tax 2023.

For rental of main residence

Regulations: Articles 8 and 18.1 and 4.c) Text Consolidated legal provisions of the Community of Madrid on taxes transferred by the State, approved by Legislative Decree 1/2010, of October 21

Amount and maximum limit of the deduction

  • 30 percent of the amounts paid for the rental of the habitual residence in the tax period.

    Precision: The rent to be paid for the lease agreement signed by only one of the spouses is a debt that corresponds exclusively to the signatory, regardless of the internal relationships that may subsequently arise within the matrimonial economic regime. Therefore, the amounts paid by the spouse who is not listed in the contract do not give the right to said deduction because he or she is not a tenant, regardless of the marital property regime. See in this regard the Supreme Court Judgment number 220/2009, of April 3 (Civil Division), issued in cassation appeal number 1200/2004 ( ROJ : STS 2464/2009).

  • The maximum deduction limit will be 1,237.20 euros, both in individual and joint taxation.

Requirements and other conditions for the application of the deduction

  • Age of the taxpayer.

    The taxpayer must be under 35 years of age on the date the tax is due (normally December 31).

    However, the deduction may also be applied if the taxpayer is over 35 years of age and under 40 years of age, provided that during the tax period he or she was unemployed and had family responsibilities.

    Definitions:

    - Unemployment situation : The taxpayer will be deemed to be unemployed when he or she has been registered as a job seeker at the Employment Offices of the Community of Madrid for at least 183 days within the tax period.

    - Family burdens : It will be understood that the taxpayer has borne family burdens when he has at least two relatives, ascendants or descendants, in his charge, considering as such those for whom he has the right to apply the minimum for ascendants or descendants .

  • Limits on the sum of the general and savings tax bases (sum of boxes [0435] and [0460] of the declaration) in order to apply the deduction.

    A double limit is required; One general requirement, which must be met by the taxpayer who intends to apply the deduction, and another specific requirement, which must be met by the family unit of which the taxpayer is a part:

    a. Taxpayer: The sum of the taxpayer's general and savings tax bases may not exceed:

    • - 26,414.22 euros in individual taxation.

    • - 37,322.20 euros in joint taxation.

    b. Family unit: the sum of the general and savings tax bases of all members of the family unit of which the taxpayer may be a part may not exceed 61,860 euros.

    Rules for applying the limits to the family unit:

    • If it is a conjugal family unit (those regulated in article 82.1.1 of the Income Tax Law), the tax bases of each of the members of the family unit make up the unit must be added, regardless of whether or not they opt for the joint tax regime and whether or not they are required to file a return.

      Thus, for each spouse, the taxable base will be that corresponding to both of them plus that of the children (minors or legally incapacitated adults subject to extended or rehabilitated parental authority), common or not, who live with the couple.

      In the case of joint taxation, the taxable base of said declaration will be the one taken into account for the purposes of the established limit.

    • If it is a single-parent or non-marital family unit, only the tax bases of the members of the family unit that theoretically correspond to each taxpayer must be added, in accordance with the provisions of article 82.1.2 of the Personal Income Tax Law : the taxpayer himself and his children (minors or legally incapacitated adults subject to extended or rehabilitated parental authority) who live with him. And all of this, also, regardless of whether or not they choose to pay taxes under the joint tax regime and whether or not they are required to file a return. In the case of joint taxation, the taxable base of said declaration will be the one taken into account for the purposes of the established limit.

  • The amounts paid for the rental of the habitual residence must exceed 20 percent of the aforementioned sum of the taxpayer's general and savings tax bases.

  • In order to apply the deduction, the taxpayer must be in possession of a copy of the receipt for the deposit of the security deposit the Social Housing Agency of the Community of Madrid, issued by the landlord, in accordance with the provisions of article 36 of Law 29/1994, of November 24, on Urban Leases, and Decree 181/1996, of December 5, which regulates the regime of deposit of security deposits for leases in the Community of Madrid, or have a copy of the complaint filed with said agency for not having been given said receipt by the landlord .

  • Additionally, the taxpayer at the time he/she expresses his/her intention to apply this regional deduction must, as a tenant, have settled the Tax on Property Transfers and Documented Legal Acts derived from the rental of the home, unless he/she is not required to submit a self-assessment for applying the bonus provided for in article 30 quater of Legislative Decree 1/2010.

    However, such intention does not have to be limited to a single moment in time and, therefore, the time limit for demanding such liquidation will depend on when it is expressed. Thus, without being exhaustive, the moment in which the taxpayer who wishes to apply the deduction must have settled the tax of TPO is set at:

    • The end of the declaration period, in the case of filing the tax return with application of the regional deduction.

    • The moment in which the taxpayer requests the rectification of a previously submitted declaration, in which the aforementioned deduction had not been included.

    • The moment in which the Tax Administration initiates the procedure to verify a declaration in which the deduction has not been included.

    Note: Taxpayers entitled to the deduction must complete the section "Additional information on the regional deduction for rent" in Annex B.8 of the declaration in which, in addition to the data necessary to quantify the deduction, the NIF / NIE of the landlord of the home must be stated and, if applicable, that of the second landlord or, where appropriate, if a NIF of another country has been entered, an X will be marked, respectively, in the corresponding boxes.