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Form 100. Personal Income Tax Return 2018

7.4.6.4. Reduction for housing rentals

REDUCTION FOR HOUSING LEASE (art. 23.2 Law)

In the case of leasing real estate for residential purposes, the net income calculated in accordance with the provisions of the preceding sections shall be reduced by 60%.

LEASE CONTRACTS PRIOR TO MAY 9, 1985 (DT 3 Law)

In the case of lease contracts entered into prior to 9 May 1985, which do not enjoy the right to rent review by application of rule 7 of section 11 of the second transitional provision of Law 29/1994, of 24 November, on Urban Leases, an additional amount equivalent to the amortisation of the property will be included as a deductible expense while this situation persists and as compensation.

AMORTIZATION EXPENSES OF INCOME FROM REAL ESTATE CAPITAL (art. 14 Rgl.)

For the purposes of determining the net return on real estate capital, amounts allocated to the amortization of the property and other assets transferred with it will be considered deductible expenses, provided that they correspond to its effective depreciation.

Depreciation will be deemed to meet the effectiveness requirement:

  1. Regarding real estate: when, in each year, they do not exceed the result of applying 3% to the highest of the following values: the acquisition cost paid or the cadastral value, without including the land value in the calculation.

    When the value of the land is not known, it will be calculated by prorating the acquisition cost paid between the cadastral values of the land and the construction for each year.

  2. Regarding movable property, likely to be used for a period of more than one year and transferred together with the property: when, in each year, they do not exceed the result of applying to the acquisition costs paid the amortization coefficients determined in accordance with the amortization table approved for the simplified direct estimation regime.

Real rights of use and enjoyment

In the event that the income comes from the ownership of real rights of use or enjoyment, the acquisition cost paid may be amortized, up to the limit of the total income from each right.

Amortization, in this case, will be the result of the following rules:

  1. When the right or faculty has a fixed term, the term resulting from dividing the acquisition cost paid for the right by the number of years of duration of the same.

  2. When the right or faculty is for life, the result of applying the percentage of 3% to the acquisition cost paid.