The income statement for the 2021 financial year has entered the final phase. However, as the campaign progressed, the Spaniards kept having doubts, who want and want to avoid making mistakes in their tax returns get rid of all income from the taxable rent. Especially those who own a home.
Redevelopment of the property, household effects or interest on the mortgage loan These are some of the deductible expenses that rental property owners need to account for on their income statement, although in many cases they are overlooked out of ignorance or fear of penalties. According to data from the first report on Spanish income tax returns and tax policy, produced by TaxScouts, an online tax return platform, 50% of Spaniards are afraid of making mistakes when filing their income tax returns.
According to TaxSocut, these are the seven most relevant deductible expenses for homeowners:
1. Apartment rent: Taxpayers who have let their habitual residence must declare this but a 60% deduction may be applied to the tax base.
2. Honours: All taxes and non-government charges payable on the home that affect the calculated returns are deductible.
3. Apartment repair and renovation costs: The cost of repairing and refurbishing homes is also deductible from personal income tax. For work on the main residence that reduces the heating and cooling requirements by 7%, which can be achieved with high-performance windows, a deduction of 20% is chosen, with a maximum of 5,000 euros per apartment.
4. Household necessities: As long as the costs are borne by the landlord, the main household consumables such as electricity, water and gas are also deductible from the income tax return.
5. Mortgage interest: The interest paid to the financial unit of the home during the amortization of the home, as well as finance costs, are also deductible on the income statement.
6. Professional Services and Amounts Earned from Third Parties: In the event that the landlord hires the professional services of a third party to rent the property or draft the lease, these expenses are also deductible as they contribute to the generation of rental income.
7. Depreciation of the property: Depreciation is also considered a deductible expense if it corresponds to its actual depreciation. This deduction is set by the Ministry of Finance and is 3% per year on the higher of the following values: acquisition cost or cadastral value, in both cases without taking into account the value of the property.
Other deductions for housing
From the TaxScouts online platform, they also remember other possible deductions in the area of housing. For example, Spaniards changing their address after accepting a job in a place other than their usual place of residence, they can Deduction for geographic mobility.
To do this, they must prove that the change of address is due to the change of job and although it is not necessary for them in the new municipality, it is advisable to do so in order to avoid problems with the Treasury when justifying the geographical Mobility in the income statement according to TaxScouts. The geographic income mobility deduction is applied to personal income tax work performance and is maximum 2,000 euros. In the case of a joint declaration, this money applies only to workers who meet all the requirements.
For homeowners who bought their property before January 1st, 2013, there is also the possibility of a deduction household insuranceas long as they own the property and have also invested in the house, deduct up to 15% with a maximum of 9,040 euros. The fields where the home insurance data must be reflected for this deduction are 547 and 548.
In addition, Spaniards who are renters can deduct the rent of their apartment. At the national level, the current transition period allows for the accrual of monthly payments for those who have a contract prior to January 1, 2015, whose renewals remain in effect or based on which a new contract was entered into. As a prerequisite, taxpayers should have already benefited from the deduction in previous income actions.
The maximum basis of assessment is 9,040 euros per year if the tax base is equal to or less than EUR 17,707.20 and the amount of the deduction is 10.05%. Also, in many Autonomous Communities, there are rental deductions for post-2015 contracts with some conditions, such as age or maximum income.