Personal Income Tax in Spain: What You Can Deduct as a Property Owner

15.04.2025

Tax season in Spain is here! Until June 30, you have time to submit your Personal Income Tax (IRPF) declaration. If you own a rental property, one of the most common questions is:

"What expenses can I deduct from my taxable rental income?"

Let’s break it down for you – this could save you a substantial amount on your tax bill.

New in 2024: Deductions on Net Rental Income

As a landlord, you may deduct a large portion of your net rental income, depending on when the contract was signed:

Did you sign a rental contract before May 26, 2023? Then you will continue to enjoy the classic tax deduction of 60%.

For contracts signed after May 26, 2023, the following applies:

90% deduction if the property is in a “stressed area” and the new rent is at least 5% lower than the previous contract (adjusted for CPI).
70% deduction if it is rented to tenants aged 18–35 in a stressed area, as their main residence, or through a government housing program with capped rental rates.
60% deduction if energy efficiency renovations were carried out within 2 years before the rental.
50% deduction in all other cases.

Additional Deductible Expenses for Rental Income

On top of those benefits, other ongoing costs related to the property can be deducted. These include:

Depreciation of the property (up to 3% of the purchase price or cadastral value, excluding land).
Contract drafting costs.
Property insurance or non-payment insurance.
Repairs and maintenance of the property.
Mortgage interest or loan interest related to the property.
Local taxes such as IBI (property tax) or garbage collection fees.
Community or HOA fees.
Utility bills, as long as you pay them directly.

Tip: Keep all invoices and proof of expenses. The Spanish Tax Office (Agencia Tributaria) may request them during audits.

Expenses You Cannot Deduct

Some costs may be unclear, but the following are not deductible:

Major renovation or extension works unrelated to general maintenance.
New furniture, unless it replaces damaged items.
Unjustified or unrelated expenses not directly linked to the rental activity.

Renting out your home in Spain? Get the right advice

Whether you’re already renting out a property or planning to invest in a second home: expert tax guidance makes all the difference. At MedVilla, we’re here to help – before, during, and after your purchase. In your own language, with no stress.

Questions about rental income tax in Spain? Contact us – we’re happy to guide you every step of the way.

MedVilla – Your real estate partner in Spain, from A to Z.