Taxing rent from a Spanish property when you live in Spain

Terms used

• IBI — The IBI is the yearly local property tax paid by the owner of a property.
• ITP — The ITP is the transfer tax paid when you buy a resale property.
• IVA — The IVA is Spain's value-added tax, charged on new-build purchases and many services.
• Vivienda habitual — The vivienda habitual is the home where the tenant lives as their main residence.
• Rendimientos del capital inmobiliario — The rendimientos del capital inmobiliario are income from letting property, reported on the Spanish income tax return.

Key rules

• Tax base: Net rent is taxed with your other general income, not at the lower savings rates.
• Late declaration: Rent an inspection finds unreported loses the reduction.
• Holiday lets: Holiday and seasonal lets get no reduction.
• Higher tiers: The 90%, 70% and 60% tiers depend on tension-zone status and extra conditions, so confirm before claiming.

The short version

Your net rent is the rent you collect, minus deductible expenses and depreciation. If the let qualifies, you then reduce that net figure. The result is added to your general taxable income and taxed at the normal scale, not the lower savings rates.

Step 1: Add up the rent and deduct expenses

You can deduct costs that were necessary to earn the rent:

• Mortgage interest and financing costs, plus repair and conservation costs. Together these are capped per property at that property's gross rent. Any excess carries forward four years.
• IBI and other local taxes and surcharges.
• Community fees, insurance and utilities you pay as landlord.
• Agency and management fees.
• Legal costs for recovering rent.
• Unpaid rent, once the required time has passed or legal steps have been taken.

Improvements are not repairs. You cannot deduct them at once. You depreciate them instead.

Step 2: Deduct depreciation

You can deduct 3% a year of the higher of purchase cost or cadastral value, excluding the land.

• Purchase cost means the price plus taxes and costs you paid, such as notary, registry and ITP or IVA, plus improvements.
• If you use the cadastral value, take only the building share of it.
• If the property was let for part of the year, prorate the amount by the days let.
• Furniture and fittings depreciate separately. The simplified table allows up to 10% a year for furniture.

Step 3: Apply the reduction, if you qualify

The general reduction on net rent from a long-term let as the tenant's main home is 50%, and it does not apply to holiday lets. To get it:

• The property must be let under a lease as the tenant's main home (vivienda habitual).
• The net rent must be positive after expenses and depreciation.
• You must declare the rent on time in your own self-assessment. If an inspection finds unreported rent, the reduction does not apply to the amount added.

Higher tiers exist for homes in a declared tension zone (zona de mercado residencial tensionado). They apply to contracts signed after 26 May 2023, and the zone must be declared before the new lease:

• 90% if the new lease cuts the rent by more than 5% against the previous contract.
• 70% if the home is let in the zone to a tenant aged 18-35, or is newly put on the rental market.
• 60% if you rented the property after a renovation in the previous two years.

Leases signed before the 2023 change under the old 60% reduction keep it under transitional rules. Ask your town hall or regional housing office whether your home is in a declared zone before you claim a higher tier.

Step 4: Know how it is taxed

The net rent counts as rendimientos del capital inmobiliario. It goes into your general taxable base and is taxed at the state scale plus your region's scale. Combined marginal rates run from 19% to 47% in most regions, and the top rate depends on your region.

A worked estimate is available in the calculator below. If you are not resident in Spain, different rules apply and you file a different return.

Checklist

• Report the net rent as rendimientos del capital inmobiliario (income from letting property) in the general base of your tax return, not in the savings base.

• Check your region's current tax scale, because it is added to the state scale and sets your top rate.

• Confirm the lease is a long-term let as the tenant's main home, since the reduction does not apply to holiday, seasonal or commercial lets.

• Make sure the net rent is positive after expenses and depreciation, because the reduction applies only to a positive amount.

• Declare all the rent on time in your own self-assessment, because rent found unreported in an inspection loses the reduction.

• For a higher tier, check the lease: a rent cut of over 5% on a new lease, a tenant aged 18-35, or a renovation in the last two years.

Estimate net taxable rental income and tax

Work it out

What you enter

• Rent you charged for the year (EUR): Your rental contract and the rent payments in your bank statements.
• Mortgage interest, financing costs and repair costs for the year (EUR): Your mortgage statement and repair invoices.
• Other deductible costs: property tax (IBI), community fees, insurance, agency fees, utilities you paid (EUR): Your IBI bill, community fee receipts, insurance policy and agency invoices.
• Building cost: price, taxes, notary and registry fees and improvements, without the land (EUR): Your purchase deed and the tax and fee receipts from the purchase.
• Building part of the cadastral value, without the land (EUR): Your IBI bill or the cadastral certificate, which split land and building value.
• Yearly depreciation of furniture and fittings (EUR): Your furniture invoices; the yearly limit is 10% of their value.
• Days the property was let in the year (days): Your rental contract start and end dates.
• Days in the tax year (days): 365, or 366 in a leap year.
• Reduction on net rent, as a percentage (50 for the general reduction on a long-term let as the tenant's main home) (%): Your rental contract date and whether the property is in a tension zone; ask the Agencia Tributaria if unsure. Use 0 for holiday lets.
• Your combined state and regional tax rate on your next euro of income (%): The income tax scale for your region, or the draft in your tax agency account.

Figures used

• Yearly building depreciation rate: 3 % (as of 2025)

Worked example (with Rent you charged for the year 12,000 EUR, Mortgage interest, financing costs and repair costs for the year 3,000 EUR, Other deductible costs: property tax (IBI), community fees, insurance, agency fees, utilities you paid 1,800 EUR, Building cost: price, taxes, notary and registry fees and improvements, without the land 150,000 EUR, Building part of the cadastral value, without the land 60,000 EUR, Yearly depreciation of furniture and fittings 400 EUR, Days the property was let in the year 365 days, Days in the tax year 365 days, Reduction on net rent, as a percentage (50 for the general reduction on a long-term let as the tenant's main home) 50 %, Your combined state and regional tax rate on your next euro of income 30 %)

When the sum misleads

• If net rent before the reduction is negative, no reduction applies and the loss is not taxed.
• Interest and repairs together cannot exceed the rent; the excess carries forward for four years.
• The tax figure is a rough estimate at one rate; real tax is progressive on your whole income, and the Basque Country and Navarra use their own scales.
• Holiday lets get no reduction, so enter 0.

Frequently asked questions

Can I deduct mortgage interest and repairs from my rental income?

Yes, mortgage interest and repair costs are deductible, but together they are capped per property at the gross rent from that property. Any excess can be carried forward for four years. Improvements are not repairs, so you depreciate them instead.

Which other costs can I deduct from the rent?

Besides interest and repairs, you can deduct the IBI (local property tax) and other local taxes, community fees, insurance, utilities you pay, and agency or management fees. Legal costs for recovering unpaid rent and unpaid-rent debts, after the required time or legal steps, also count.

Are rates higher than the savings rates on my Spanish rental income?

Yes, net rent is taxed in the general base, not at the savings rates. It pays the state scale plus your region's scale, with combined marginal rates from about 19% to 47% in most regions. The top rate varies by region.

Can I get a reduction higher than 50% on my rent?

Yes, but only for homes in a declared tension zone, where the reduction can be 90% after a rent cut of over 5% on a new lease. It is 70% for tenants aged 18-35 or a newly let home, and 60% for a home renovated in the last two years. Check whether your area is declared before the lease starts.