It’s time to start the income tax return for this year and put get your expenses and finances in order. Thousands of tenants ask themselves year after year if the rent can be deducted in the income tax return. Well, if you have a rented apartment in Barcelona, this article is for you!
How can I declare my rented apartment in the income tax return?
As the owner of a rental home, you will be obliged to present all the benefits that exceed €1,600 per year derived from your rented property.
- Identification of the property: From boxes 0062 to 0075 you must enter the data referring to the property for rent.
- Identification of the lease contracts: Once the property has been identified, you must identify the different landlords that have occupied your apartment. In boxes 0091 to 0101, you must include the corresponding NIF (check if it is a document from another country).
- Full computable income: In box 0102 you must include the sum of all monthly payments accrued during the year 2022. Keep in mind that here you must enter the full computation, without deducting expenses or defaults. In addition, if your rental fee includes other types of costs such as community of neighbors, electricity, etc., you can also add them, although you must also include them in their corresponding boxes.
What deductions am I entitled to?
As a landlord, you can deduct a series of expenses derived from your rental income. This will mean that when taxing the IRPF it will only be applied to the net benefits of your home. These are the expenses that you can deduct:
- Mortgage expenses: You will be able to deduct the interest derived from the formalization of the mortgage, credit application destined to improve the home or notary expenses. However, it does not include fees that you will have to pay to your bank. You must mark them in box 0104.
- Housing conversation and repair expenses: In box 1107 you must include the expenses derived from maintenance arrangements, but the Treasury does not include works that are for improvement or expansion. For example, you can deduct painting, revision of electrical installations, doors, etc., but not those repairs that are for something better or of the latest generation (it must be of the same level).
- Community expenses: If the property is within a community of neighbors, you must include the common expenses in box 0109 to be able to deduct them. Only those that must be paid by the owner.
- Housing taxes: You can deduct all the taxes related to the property, for example: the Real Estate Tax (IBI), garbage collection, municipal taxes for lighting, sewerage… In summary, all those taxes associated with the use of the property. You must include them in box 0115.
- Repayment of the property: The Treasury allows deductions of up to 3% of the cadastral value of the property or the acquisition value. To calculate the amortization base, you must calculate the amount of expenses and taxes at the time of the purchase and sale and add the improvements made, if any. You must include it in box 0118.
- Repayment of movable assets: In box 0117 you can deduct up to 10% of the capital that you have invested in movable assets, such as household appliances or furniture.
- Non-payment insurance: If you have non-payment insurance for homeowners, you should know that it is also considered a deductible expense, so you must add it in box 114 “Insurance contract premiums”.
4 mistakes that you should not make in your income statement
If you have an apartment for rent, read the following situations carefully to anticipate and avoid any penalty on your next 2023 statement:
- Do not include rental housing: If it is a regular rental property, you can deduct up to 60% of the rental income and also deduct the derived expenses, as we have already seen. However, if your property has not been rented for a period of time, even though you can include it anyway, the Treasury will make you pay a tax on it, since the opportunity to shelter someone has been lost.
- Reforms to improve energy efficiency: In addition to the multiple advantages of having a more sustainable apartment, you will also obtain benefits in the income statement:
- Reduce the demand for heating and cooling in the home by 7%: To do this, you must prove this amount and have carried out the work between October 2021 and December 2023. As long as the works do not exceed €5,000, you can deduct 20%
- Improvement in the consumption of non-renewable energy: Those homes that certify that they have reduced at least 30% of fossil fuel energy, may deduct up to 40% of a maximum of €7,500.
- Energy rehabilitation works: In the case of a home located in a residential building, if it manages to achieve an A or B certification, it may obtain a 60% deduction on a maximum of €5,000.
- Forgetting to deduct your mortgage: If you bought your home before January 1, 2013, you can deduct 7.5% of a maximum of €9,040. It must be taken into account that it only applies to the usual property.
- Not making the declaration: The Treasury establishes that taxpayers who have reached €22,000 (a single payer) or €14,000 per year (more than one payer) are obliged to make the income declaration. Now, if you do not reach the minimum income established, it is not less recommended for that. Making the income statement will help you for other procedures that you may need and to obtain the corresponding returns for the year.
Now that you know how to file your income tax return for this year, make sure you have a team of professionals to help you through the process. If you have any unresolved questions, you can contact our team to manage your rental!