If you are a European Union citizen who owns a rental property in Spain, you are required to declare your rental income in Spain under the IRPF (Personal Income Tax) rules.
The good news is that you can deduct a wide range of expenses, which significantly reduces the taxable amount.
Below you will find a clear explanation of all the expenses you can deduct, written in simple terms, exactly as established in the Spanish tax legislation.
✔️ What rental expenses can you deduct?
As a landlord, you can deduct all costs that are necessary to obtain and maintain your rental income.
This means any expense directly related to the property, rental activity, or tenant is generally acceptable.
Here is the full list of deductible expenses:
1. Community fees
Maintenance costs paid to the community of owners.
2. Property insurance
Home insurance, building insurance, or landlord insurance.
3. IBI (Property Tax)
The annual municipal tax charged on real estate.
4. Rubbish collection and municipal charges
Any compulsory local rates.
5. Utilities paid by the owner
If you pay for water, electricity, gas, or internet.
6. Mortgage interest
Only the interest portion of mortgage payments (not capital repayment).
7. Property repairs and maintenance
Repairs necessary to keep the property in good condition:
- plumbing
- electricity issues
- painting
- fixing appliances
- general maintenance
(Improvements or renovations that increase the value of the property are treated differently — not as simple repairs.)
8. Agency and management fees
Real estate agency fees, property management fees, administration fees, etc.
9. Legal and accounting costs
Lawyers, tax advisers, accountants, or any professional fees related to the rental.
10. Advertising costs
Any expenses paid to promote or advertise the property.
11. Service contracts
Such as:
- gardening
- cleaning
- pool maintenance
- security services
12. Depreciation (Amortisation of the property) – VERY IMPORTANT
You can deduct 3% of the cadastral value (valor catastral) of the construction every year.
This is one of the largest and most beneficial deductions available and can reduce your tax bill significantly.
Depreciation applies to:
- the building (not the land),
- fixed installations,
- and certain long-term improvements.
Most foreign landlords are not aware of this, but amortisation alone can reduce your taxable rental income by thousands of euros every year.