Renting a home has tax advantages when making the income tax return. Not only the owner benefits from them, but the tenant also has a number of benefits for living in a home. If you have a flat to rent or you are rented, take note of the tax advantages you can enjoy.
Advantages for owners: Owners of rented housing can count on a 60% reduction as indicated in the Personal Income Tax Law. This percentage will be calculated on the basis of the income obtained from the flat in that year, minus the expenses also acquired. That is to say, the benefits that the landlord has had on the property.
However, only those properties that are used as the tenant’s dwelling can benefit from this measure. That is to say, houses destined to professional or commercial activities will not apply this deduction. However, these properties must be traditional and not exclusively dedicated to tourism, holiday seasons or short periods. In addition, renters are exempt from paying VAT when the tenant uses the building as a home as said by Barcelona apartments company.
The reduction in the tax return comes, as we have said, from the income minus the expenses received by the lessor in that year. The income is clear with the tenant’s monthly payments. However, do we know what these expenses are subtracted from the total?
Interest on loans or credits that are related to housing. That is to say, when a loan has been requested to improve the property or for the acquisition of the same one.
Taxes and state fees that the landlord has to pay. Included are: IBI, cleaning fee, garbage collection, lighting or community fees.
Expenses for the formalization of the lease.
Costs of conservation and repair of the dwelling. This does not include expenses for the improvement or extension of the property, but rather the expense that has been made to maintain the habitable dwelling, such as painting or repairing electrical appliances.
Expenses for supplies and services, such as water, electricity or gas, as long as the owner pays for them.
The amounts used for depreciation and of the goods contained in and leading to the depreciation of the dwelling.
Expenses derived from home insurance, such as fire, theft or breakage.
In order to enjoy the tax advantages, the landlord must include in the income tax return the income and expenses received from renting the property. All the Autonomous Communities include the deduction except La Rioja and Murcia, which devote their efforts to young people buying housing instead of paying rent.
Advantages for tenants: The tax benefits that landlords can enjoy depend on the Autonomous Community in which they reside. However, the law has changed and only those who have signed the rental contract before 1 January 2015 can include the flat in the tax return. To do so, the deduction for rent must have been applied in the income tax return of previous years.
On the other hand, the income of the tenants is situated and it cannot exceed 24,107.20 euros per year. The deduction for them is lower as it is 10.05% of the amount paid during that year. However, this amount paid is limited to 9,040 euros of which the maximum to receive will be 908 euros, although always depending on the income of the declarant.
In these circumstances, the tenant may wish not to change housing, use the extensions of the contract and, if they are terminated, may also continue to apply the deduction if you resign a contract with the same landlord (on the same housing), even if the amount and term of the contract are modified.
To these advantages are added the regional ones. In other words, the deductions allowed by each Autonomous Community. The age of the lessee or the lessee’s income are the advantages included in most of the Autonomous Communities.