Applying the Main-Home Rental Deduction on a Tax Return

By: Josep Navarro

Applying the Main-Home Rental Deduction on a Tax Return

Deduction for renting a main home

Without prejudice to any rules approved by each Autonomous Community, from 1 January 2008 taxpayers could deduct a percentage of the amounts paid during the tax year to rent their main home.

From 1 January 2015, the deduction for renting a main home under Article 68(7) of the Personal Income Tax Act was abolished. A transitional regime was introduced, allowing taxpayers to continue claiming the deduction under the Act as worded on 31 December 2014, provided that they:

Had entered into a lease before 1 January 2015 and had paid rent for their main home before that date; and
Had been entitled to the main-home rental deduction for rent paid in a tax period ending before 1 January 2015.

The rules provided for a deduction of 10.05% of the amounts paid during the tax year, provided that the taxpayer’s taxable income was below €24,107.20 per year. This was a state-level deduction that affected only the state portion of the tax liability, not the regional portion. In addition to this general deduction, some Autonomous Communities have introduced their own similar deductions, which may be claimed alongside it.

The maximum deduction base is:

€9,040 per year where taxable income is €17,707.20 or less.
€9,040 − [1.4125 × (taxable income − €17,707.20)] where taxable income is between €17,707.20 and €24,107.20 per year.
No deduction is available where taxable income is €24,107.20 or more, whether the taxpayer files individually or jointly.

Some Autonomous Communities have their own deductions

For example, taxpayers whose habitual residence is in Catalonia may claim a deduction against the regional portion of their Personal Income Tax liability for renting their main home. It is 10% of the amounts paid during the tax year, up to an annual maximum of €300.

Certain requirements must also be met to claim this deduction.

Tax Agency