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Practical manual for Income Tax 2023.

For rent or payment for the transfer of use of the habitual residence

Regulations: Art. 4.One.n), Four and Five and Sixteenth Additional Provision Law 13/1997, of December 23, regulating the autonomous section of the Personal Income Tax and other transferred taxes, of the Valencian Community

Important : for taxable events accrued from May 9, 2023 the treatment granted to tenants is equated with that of assignees of use by virtue of contracts granted with entities that own collaborative housing under the provisions of Law 3/2023, of April 13, on collaborative housing in the Valencian Community.

Amount and maximum limits of the deduction

  • 20 percent , with a limit of 800 euros .

  • 25% with a limit of 950 euros if the tenant meets one of the following conditions:

    1. Be age equal to or less than 35 years .

    2. Have been recognized as having a degree of physical or sensory disability equal to or greater than 65%, or a mental disability greater than 33% .

      The degree of disability must be accredited by the corresponding certificate issued by the competent bodies of the Generalitat or by the corresponding bodies of the State or other autonomous communities.

      The specific provisions provided for persons with physical or sensory disabilities, with a degree of disability equal to or greater than 65 percent, or persons with mental disabilities, with a degree of disability equal to or greater than 33 percent, shall apply to persons with disabilities whose incapacity is declared judicially, even if it does not reach that degree.

      Guardianship with full powers of representation established by court order will be considered equivalent to a disability level of 65 percent.

      The specific provisions provided for persons with physical or sensory disabilities, with a degree of disability equal to or greater than 33 percent, will apply to Social Security pensioners who have been granted a pension for total, absolute or severe permanent disability, and in the case of pensioners of passive classes who have been granted a retirement pension or withdrawal pension for permanent incapacity for service or disability.

    3. Be considered victim of gender violence according to the provisions of Law 7/2012, of November 23, of the Generalitat, comprehensive against violence against women in the area of the Valencian Community.

  • 30 percent with a limit of 1,100 euros , if you meet two or more of the above conditions.

  • The maximum deduction amount will prorated by the number of days in which the lease/transfer for use remains in within the tax period and in which the personal circumstances required for the application of the different deduction percentages are met.

Please note that in order to be able to apply this deduction, the taxpayer must pay, as a tenant/assignee, amounts in rent for his/her habitual residence during the tax period. Therefore, in the case of marriage, whatever the economic regime, only the amounts paid by the spouse who signed the lease/transfer of use contract will be deductible, without prejudice to the fact that such contract has internal effects between the spouses.

Requirements and other conditions for the application of the deduction

  • That the date of the lease contract is after April 23, 1998 and its duration is equal to or greater than one year.

    Remember: In order to deal with the impact of Covid-19, the requirement regarding the obligation of the taxpayer, as a tenant, to submit the corresponding self-assessment of the Tax on Property Transfers and Documented Legal Acts derived from the lease contract of the habitual residence was removed, with effect from January , by the First Additional Provision of Decree Law 1/2020, of March 27 (##1## DOGV ##1## of 30).

  • That it is the lease/transfer for use of the taxpayer's habitual residence, effectively occupied by the taxpayer. For these purposes, the concept of habitual residence included in the state regulations governing IRPF will be used.

  • That, for at least half of the tax period, neither the taxpayer nor any of the members of his/her family unit are the owners, individually or jointly, of the entire full ownership or a real right of use or enjoyment constituted over another home less than 50 kilometers from the rented home, unless there is an administrative or judicial resolution that prevents them from using it as a residence.

    Attention : from May 9, 2023 the dwelling that its owner transfers to the Valencian Housing and Land Entity for social rental will not be counted as another dwelling when the transferor is over 65 years of age and becomes a user of a collaborative dwelling, of social interest, under a transfer of use regime.

    In the case of being a woman who is a victim of gender violence, for the purposes of applying this deduction, will be considered not to be part of the aggressor's legally non-separated spouse. The property that the taxpayer shared with the aggressor will not be counted as habitual residence either.

    Precision: the concept of family unit is established in article 82 of the Personal Income Tax Law and is examined in Chapter 2 of this Manual.

  • In the case of payment for the transfer of use of the habitual residence , the part corresponding to this concept must appear separately on the receipt issued by the owner entity.

  • That taxpayer is not entitled in the same tax period to any deduction for investment in primary residence .

  • That the sum of the general taxable base and the savings taxable base or , boxes [0500] and [0510] of the declaration, does not exceed the following amounts:

    • - 30,000 euros in individual declaration.

    • - 47,000 euros in joint declaration.

  • When two or more taxpayers declaring IRPF are entitled to apply this deduction for the same dwelling , the limit will be prorated between them in equal parts.

Deduction limits based on taxable base 

  • The maximum deduction limits (800, 950 or 1,100 euros, as appropriate) will only apply to taxpayers whose sum of the general taxable base and the savings taxable base is less than 27,000 euros, in individual taxation, or less than 44,000 euros, in joint taxation.

  • When the sum of the general taxable base and the savings taxable base of the taxpayer is between 27,000 and 30,000 euros , in individual taxation, or between 44,000 and 47,000 euros, in joint taxation, the deduction limits will be as follows:

    1. In individual taxation, the result of multiplying the maximum deduction limit (800, 950 or 1,100 euros as appropriate) by a percentage obtained by applying the following formula:

      100 × (1 – the coefficient resulting from dividing by 3,000 the difference between the sum of the taxpayer's general and savings taxable base and 27,000)

    2. In joint taxation , the result of multiplying the maximum deduction limit (800, 950 or 1,100 euros as appropriate) by a percentage obtained by applying the following formula:

      100 × (1 – the coefficient resulting from dividing by 3 .000 the difference between the sum of the taxpayer's general and savings taxable base and 44,000)

    The apportionment of the maximum limits of deduction must only be carried out when there is more than one person who, by filing a declaration, can apply the deduction for the same dwelling by meeting all the requirements for doing so, including the maximum amount of the taxable base, even if they do not apply it effectively. Therefore, persons who do not file a declaration or those who have a taxable base higher than required are not taken into consideration for the purposes of the apportionment.

  • The application of the deduction is conditional on the delivery of the monetary amounts derived from the act or legal transaction that gives the right to its application being made by credit or debit card, bank transfer, personal check or deposit into accounts in credit institutions .

    The requirement for this is established in Additional Provision sixteen of Law 13/1997, of December 23, which regulates the autonomous section of the IRPF and other transferred taxes. 

Compatibility

This deduction is compatible with the one discussed below "For renting a home as a result of carrying out an activity, on one's own account or on behalf of another, in a different municipality."

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, if applicable, if a NIF of another country has been entered, an X will be marked, respectively, in the corresponding boxes.