Rental income tax for residents of Spain (IRPF)

Scope: this is the national law

The text read is Law 35/2006, the state IRPF law. It is a state law. The Basque Country and Navarre run their own foral personal-income systems, which this guide did not read; if the property or your residence is there, use the foral tax authority. Autonomous communities also set some regional elements of IRPF, so figures such as the final rate are not stated here. For a non-resident owner a different tax applies, covered in renting out as a non-resident.

Gross rent and net income

Article 22 counts as gross income everything arising from letting, “cualquiera que sea su denominación o naturaleza”. It includes all amounts the tenant must pay, together with items let with the property such as furniture, and excludes VAT (or the Canary Islands’ IGIC).

Article 23.1 then deducts:

• all expenses necessary to earn the income, including interest on borrowed capital invested in buying or improving the property, other financing costs, and repair and conservation expenses. Interest and repairs together cannot exceed the gross income from that property; the excess can be deducted in the following four years;
• taxes and surcharges that are not state taxes, and state fees, if they fall on the income or the property and are not penalties;
• doubtful debts, under the conditions set by regulation;
• sums charged by third parties for personal services;
• amortisation, deemed effective if it does not exceed 3% of the greater of the acquisition cost paid or the cadastral value, excluding the value of the land.

The result is the net income. Only a positive net income is then reduced under article 23.2.

The article 23.2 reductions (in force since 8 October 2026)

They apply to lets of property for housing under article 2.1 of the tenancy law, where the landlord is not a large holder at the time of signing (article 3.k of Law 12/2023: more than ten urban residential properties or more than 1,500 m², and a stressed zone may lower it to five). Where several reductions fit, the largest applies.

A. A new contract signed by the same landlord for a home previously let

B. A first-time let of the home

C. Other cases. 70% where the tenant is a public administration or a qualifying non-profit using the home for social rent below the state housing plan’s rent-aid threshold, or for housing vulnerable people, or where the home belongs to a public housing programme that limits the rent; 60% where the home was the subject of a rehabilitation, within the meaning of the IRPF regulation, completed in the two years before the lease was signed.

An additional 80% applies during a tacit extension under article 10.1 of the tenancy law, where the initial rent does not exceed the reference limit at the time of the extension and the landlord is not a large holder.

Conditions that matter

• The requirements must be met when the contract is signed; the reduction lasts for the contract while they continue to be met.
• Where there are several tenants, the 95% and 85% reductions for tenants aged 18-35 apply only to the share of net income that corresponds to those tenants.
• The reductions apply only to positive net income computed in a return filed before a verification, limited audit or inspection procedure that includes it has begun. They do not apply to the part of income that comes from unreported revenue or wrongly deducted expenses that are regularised, even if you admit it.
• They do not apply to contracts that break article 17.6 of the tenancy law, the cap on starting rents in stressed areas.
• The zones are those in the housing ministry’s resolution; see stressed housing market areas.

Which version applies to your contract

The consolidated BOE page records that the previous wording of article 23.2, introduced by Law 12/2023, applied to residential leases signed from that law’s entry into force and took effect on 1 January 2024. The decree-law of October 2026 rewrote the paragraph “con efectos desde la entrada en vigor”. This guide did not read the transitional rules, so whether the older percentages (for example 90% or 70% for the earlier cases) still apply to contracts signed before 8 October 2026 must be checked with the tax agency or an adviser. The decree-law was in force on 15 October 2026 but, like its predecessor repealed on 2 October 2026, may not be validated.

Holiday and non-housing lets

The reduction is written for lets of housing under article 2.1 of the tenancy law. A tourist let falls outside that law (article 5.e), so the article 23.2 text does not on its face cover it; see tourist rental registration. Deductible costs under article 23.1 apply to income from any let.

What this guide does not give

Filing deadlines, forms, the tax rate on the net income and regional deductions were not read for this guide. The tax agency’s site and the website of your regional tax authority set them. There are no worked amounts here because the final tax depends on your other income.

Which professional to consult

A tax adviser registered in Spain (asesor fiscal) or a lawyer registered with a colegio de abogados can run the numbers for your return. Payotte does not list tax advisers. For letting duties see letting your property in Spain.