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How to reflect the rental of housing in the IRPF (Personal Income Tax) if you are resident

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All owners of rented accommodation are obliged to declare the income received from renting, as this income is considered as income from real estate capital.

How is it calculated?

Before the tax authorities, the tax is paid on the net income. In other words, the amount received minus deductible expenses.  From this figure, the net rental income is obtained, on which a deduction of 60% can be applied when the rented property is used as the main residence. This reduction does not apply to tourist flat rentals, which is why it is necessary to clarify this point when making the tax return.

What can be deducted?
Community expenses, administration and payments: You can deduct community fees, property administrator’s fees, caretaker’s fees, gardening fees, etc.
Taxes and fees: IBI, rubbish collection tax, lighting, etc.
Mortgage. The interest on the amortization, not the principal of the mortgage.
Repairs and maintenance expenses.
Insurance that protects the property.
Depreciation of the property: You can deduct 3% of the construction value for wear and tear.
What must be declared?

In this section, the total income must be included in the section on income from real estate capital. To calculate the amount on which you pay tax, subtract the deductible expenses from the amount received and you obtain the profit, which is the amount on which you pay.

Important. When the property being rented is a home, 60% of the total net rental income is exempt.

What can be deducted:

Annual depreciation of the property: 3% of the higher of these values: acquisition cost or cadastral value. Very important: the value of the land must be excluded.
Interest on the mortgage loan.
Conservation and repair expenses. Expenses for the extension or improvement of the property are not deductible.
Taxes and fees:
House insurance.
Community expenses, security, porter’s lodge, etc.
Expenses derived from the formalisation of the rental contract.
Pay attention to the rents pending collection, if any.
House rented to a relative

The Inland Revenue says that, if it is up to and including the third degree, the computable income must not be less than the amount resulting from: 2% of the cadastral value corresponding to the property in each tax period. Or 1.1% of the cadastral value in case they have been revised or modified.

Tourist rentals

The mechanism is similar to the previous one. But in this case, it is not exempt from the 60% tax foreseen for properties rented and destined for habitual residence. In addition, the period in which the property has not been occupied must be declared as imputed income.



About The Author
Israel Huertas Salazar

Inmobiliaria en Torrox. Ofrezco un trato personalizado y una contrastada experiencia como intermediario en la compraventa de inmuebles de todo tipo, oportunidades y grandes inversiones inmobiliarias, en diversas ubicaciones, tanto en Torrox, como Nerja, Frigiliana, Torre del Mar… y gran parte del territorio andaluz. Como broker inmobiliario, colaboro en red con todas las inmobiliarias y empresas promotoras y puedo conseguir la propiedad de su interés.