Practical case

The marriage composed by Mr. RJR and Mrs. MAT, resident in Barcelona, has had leased in 2025 three properties owned by him under the conditions set out below. The relationship between income, expenses and other data of interest for determining net income are those indicated in each of the assumptions.

It is requested to determine the reduced net return on real estate capital corresponding to said homes in the year 2025, in the case of joint taxation.

1. Rented housing in a non-stressed area.

The property in question was rented from January 1, 2021 to May 31, 2021. 2025, whose tenants left, for a monthly rent of 900 euros. June 1st 2025 He signed a new contract agreeing to a monthly rent of 1,000 euros.

The house was purchased in 2000 for an amount equivalent to 120,000 euros plus 9,000 euros in expenses. To acquire it, they took out a mortgage loan from Bank "Z" which they have been paying off over the course of 2025 the amount of 400 euros in interest and 2,200 euros in principal repayment. The cadastral value of said property, which was revised in 2012, amounts to 76,200 euros, of which 37,080 euros correspond to the value of the land and 39,120 euros to the value of the construction, according to the data shown on the IBI receipt for the year. 2025, its cadastral reference being 5661402VK4757B0033LR.

The cost of acquiring the furniture that the house contains, according to the invoice from 2017, amounts to 8,500 euros. Expenses paid in 2025 The following have been the details regarding said property:

Real Estate Tax (IBI): 320
Community: 900
Plastering of the facade: 500

Solution to the case of rented housing in a NON-stressed area :

Note:In accordance with the ninth Final Provision of Law 12/2023, of May 24, on the right to housing ( BOE of May 15), the new percentage reductions for the rental of properties intended for housing are applicable from January 1, 2024 for contracts signed after May 26, 2023.

Full income corresponding to the first contract (from January 1st to May 31st) 2025) (900 x 5)= 4,500

Full income corresponding to the new contract (from June 1st to December 31st) 2025) (1,000 x 7) = 7,000

NOTE: To complete it in the Renta web program, you must register as many leases as contracts you have had on the same property during the fiscal year, entering the data corresponding to each one individually.

Total income: 4,500 + 7,000 = 11,500

Deductible expenses :

Interest on capital invested in the acquisition of housing (mortgage loan) ⁽¹⁾: 400
Repair and maintenance costs ⁽¹⁾: 500
Taxes, surcharges and fees (IBI): 320
Community fees: 900
Amortization:
- * Housing (3% x 66,228.60) ⁽²⁾ = 1,986.86
- * Furniture (10% off 8,500) ⁽³⁾ = 850

Total deductible expenses: 4,956.86

Net income (11,500 – 4,956.86) = 6,543.14

From January 1st to May 31st 2025: 4,500 - (4,956.86 x 5/12) = 2,434.64
From June 1st to December 31st 2025: 7,000 - (4,956.86 x 7/12) = 4,108.50

Reduction for housing rental:

Regarding the performance obtained under the first contract (prior to May 26, 2023): (60% x 2,434.64) = 1,460.78
Regarding the performance obtained as a result of the current contract: (50% x 4,108.50) = 2,054.25

Reduced net performance: (6,543.14 - 1,460.78 - 2,054.25) = 3,028.11

Note: as a consequence of the thirty-eighth transitional provision of the Personal Income Tax Law, introduced by Law 12/2023, of May 24, for the right to housing, to the positive net income from real estate capital derived from housing lease agreements that have been held prior to May 26 of 2023, the reduction provided for in section 2 of article 23 of this law in its wording in force on 31 December 2021 will apply to them, therefore, in the case presented, 60% corresponds to the part of the income obtained as a result of the contract entered into in 2021, until 31 May of 2025.

The performance obtained after the signing of the contract on June 1st 2025That is, after May 26, 2023, the 50 percent percentage applies to it because it does not meet the requirements for the application of the increased reduction percentages.

Had the previous contract (the one entered into before May 26, 2023) remained in force, the applicable percentage on the positive net return would have been in effect throughout the entire tax period. 2025 the 60 percent one (wording in force as of 31-12-2021).

Notes to the solution of rented housing in a NON-stressed area :

⁽¹⁾ The total amount to be deducted for interest on external capital invested in the acquisition of the property and the costs of repair and maintenance of the property will be limited to the amount of the gross income obtained. The excess may be deducted in the following four years (article 23.a).1 of the Law of PIT). In this case, the total amount (400 + 500 = 900 euros) is much lower than the total income (11,500 euros). ^{(Return interests)} ^{(Return repair costs)}

⁽²⁾ To determine the amounts allocated to the amortization of the property, the following data is taken into account:

Cadastral value: 76,200 euros
Cadastral value of construction: 39,120 euros
% cadastral value of construction/cadastral value [39,120 ÷ 76,200) x 100] = 51.34%
Acquisition cost (including expenses associated with the purchase) (120,000 + 9,000) = 129,000 euros
Acquisition cost, excluding land value (129,000 x 51.34%) = 66,228.60 euros

According to article 14.2.a) of the Personal Income Tax Regulations, the amortization may not exceed, in each year, the result of applying 3% to the highest of the following values: cadastral value of construction (39,120 euros) or acquisition cost, excluding land (66,228.60 euros). ^(Back)

⁽³⁾ According to article 14.2.b) of the Personal Income Tax Regulations, the amortization may not exceed, in each year, the result of applying to the acquisition costs paid for the acquisition of the furniture (transferred together with the home) the amortization coefficients determined in accordance with the simplified amortization table approved by Order of March 27, 1998, referred to in article 30.1.ª of the aforementioned Regulation, that is, 10%. ^(Back)

2. Leased housing in stressed area

The property located in Granollers (Barcelona) has been rented since April 1st. 2025 for 650 euros per month.

It was acquired in 2003 for an amount equivalent to 70,000 euros, plus 3,000 euros in expenses. To acquire it, they took out a mortgage loan from Bank "Z" which they have been paying off over the course of 2025 the amount of 200 euros in interest and 1,200 euros in principal repayment. The cadastral value of said property, which was reviewed in 2012 The total amounts to 46,200 euros, of which 17,080 euros correspond to the value of the land and 29,120 euros to the value of the construction, according to the data shown on the property tax receipt for the year. 2025, its cadastral reference being 4927802TG3442F0088ZR.

The cost of acquiring the furniture installed in the home, according to the invoice from 2018, amounts to 6,900 euros. Expenses paid in 2025 The following have been the details regarding said property:

Real Estate Tax (IBI): 260
Community: 850
Plastering of the facade: 210

The property was rented during the four previous years up to December 31 2024 for a rent that amounted to 700 euros per month (therefore, it has been available to its owners from January to March of 2025). Mr. RJR and Mrs. MAT, aware of the new tax incentives for leasing residential properties, have taken advantage of the formalization of the new contract to reduce the monthly rent for the new tenant to 650 euros per month, in order to take advantage of the application of a higher reduction percentage.

Solution to the case of rented housing in a stressed area :

Total income (650 x 9) = 5,850

Deductible expenses :

Interest on capital invested in the acquisition of housing (mortgage loan) ⁽¹⁾ : 200 x 9/12 = 150
Repair and maintenance costs ⁽¹⁾: Repair and maintenance costs: 210 x 9/12 = 157.50
Taxes, surcharges and fees (IBI): 260 x 9/12 = 195
Community fees: 850 x 9/12 = 637.50
Amortization:

* Housing (3% x 45,990) x 9/12 ⁽²⁾ = 1,034.78

* Furniture [(10% off 6,900] x 9/12 ⁽³⁾ = 388.13

Total deductible expenses: 2,562.91

Net income (5,850 - 2,562.91) = 3,287.09

Reduction for housing lease ( 90% / 3,287.09) = 2,958.38

Reduced net yield: ( 3,287.09 - 2,958.38) = 328.71

Notes on the solution for rented housing in a stressed area :

⁽¹⁾ The total amount to be deducted for interest on external capital invested in the acquisition of the property and the costs of repair and maintenance of the property will be limited to the amount of the gross income obtained. The excess may be deducted in the following four years (article 23.a).1 of the Law of PIT). In this case, the total amount (200 + 210 = 410 euros) is much lower than the total income (5,850 euros). ^{(Return interests)} ^{(Return repair costs)}

⁽²⁾ To determine the amounts allocated to the amortization of the property, the following data is taken into account:

Cadastral value: 46,200 euros
Cadastral value of construction: 29,120 euros
% cadastral value of construction/cadastral value [29,120 ÷ 46,200) x 100] = 63%
Acquisition cost (including expenses associated with the purchase) (70,000 + 3,000) = 73,000 euros
Acquisition cost, excluding land value (73,000 x 63%) = 45,990 euros

According to article 14.2.a) of the Personal Income Tax Regulations, the amortization may not exceed, in each year, the result of applying 3% to the highest of the following values: cadastral value of construction (29,120 euros) or acquisition cost, excluding land (45,990 euros). ^(Back)

For the months of January, February and March that were not rented the imputed real estate income must be declared. In this case, since the cadastral value has been reviewed:

1.1% (46,200 euros x (90/365) = 125.31

NOTE: The deductibility of these expenses only applies to the part of the tax period in which they are rented. Consequently, they are not considered deductible expenses for the purposes of article 23.1 of the Law of PIT, those generated during the time in which the property is not rented, even if it is available to be rented (in expectation of rent). Interpretative criterion established by the Supreme Court in Judgment No. 270/2021, of February 25 (ROJ: STS 910/2021).

Note: Please note that Granollers is among the areas with a stressed residential market that have been declared in accordance with the procedure provided for in article 18 of Law 12/2023, of May 24, on the right to housing as a result of the Resolution of March 14, 2024, of the Secretary of State for Housing and Urban Agenda ( BOE of March 15), with a period of validity between March 16, 2024 and March 16, 2027. As a result of the above, and having met the requirement of reducing the rent by more than 5% compared to the last rent of the previous contract once the annual update has been applied, they are entitled to apply the 90% reduction percentage.

3. Housing rented to a family member.

The house was acquired in 2009 for 45,000 euros, including the expenses inherent to said acquisition, and has been rented since 2020 to a brother of Mrs. MAT. for 300 euros per month.

The cadastral value of the property is 13,800 euros, of which 4,830 euros correspond to the value of the land and 8,970 euros to the value of the construction. This cadastral value was last revised in 2012. The cadastral reference of said property is 4927802TG3442F0134YK.

The expenses for this home over the course of 2025 They have been the following:

Real Estate Tax (IBI): 91
Loan interest: 4.200
Capital amortization: 1.202
Community: 720
Air conditioning installation (01-07-25): 1,500

Solution to the case of a home rented to a family member

The highest value of the following shall be computed as the minimum total net return:

3.1. Reduced net yield

Calculating the difference between gross income and deductible expenses:

Interest on capital invested in the acquisition of housing (mortgage loan) ⁽¹⁾ : 3.600

* Limit: gross income: 3.600 euros

* Amount of 2025 pending deduction in the following 4 years: 4,200 -3,600 = 600
Taxes, surcharges and fees (IBI): 91
Community fees: 720
Housing and air conditioning amortization: 3% x (29,250 ⁽²⁾ + 1,500 x 6/12) ⁽³⁾= 900

Total deductible expenses: 5.311

Net return (3,600 – 5,311) = -1,711

Reduction for housing rental ⁽⁴⁾ : 0

Reduced net performance: -1.711

3.2. 1.1 percent of the cadastral value (1.1% x 13,800) = 151.80

Net performance:

The higher of the two values calculated in sections 3.1 will be declared. and 3.2. That is, 151.80.

Notes to the solution of the house rented to a relative :

⁽²⁾ To determine the amounts allocated to the amortization of the property, the following data is taken into account:

Cadastral value: 13,800 euros
Cadastral value of construction: 8,970 euros
% cadastral value of construction/cadastral value [8,970 ÷ 13,800) x 100] = 65%

Acquisition cost, excluding land value (45,000 x 65%) = 29,250 euros ^(Back)

⁽³⁾ The installation of an air conditioning system in a property intended to obtain real estate capital returns must be classified as an improvement, being included as a higher acquisition value of the property and amortized at 3% in accordance with the provisions of article 14.1 and 2 of the Personal Income Tax Regulations. ^(Back)

⁽⁴⁾ The reduction for leasing properties used for housing does not apply because the net yield is negative. However, please note that, if the net income were positive, in accordance with the new percentage reductions for residential rentals in Article 23.2 of the Personal Income Tax Law applicable from 2024, you would be entitled to a 60% reduction since this was a rental contract signed in 2020. ^(Back)

3. Sum of reduced net returns on real estate capital

The sum of the reduced net capital gains from the three leases: (3,028.11 + 328.71 + 151.80) = 3,508.62