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V0026-22 4 January 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

60% tax reduction on residential rent applicable if contract identifies the specific employee using it

A property owner inquired whether the 60% reduction on the net yield of residential rent could be applied to a property leased to a company for an employee. The Directorate General for Taxes (DGT) ruled that this is possible, provided the contract proves the property is intended for the residence of a specific natural person.

The question raised

Whether, in that case, there would be a right to the reduction of 60 percent of the positive net yield of real estate capital in the Personal Income Tax.

The DGT's ruling

The reduction provided in Article 23.2 of the Personal Income Tax Law (LIRPF) is applicable when the lessee is a legal entity, provided it is proven that the property is intended for the housing of specific natural persons. The exclusive use must pertain to the natural person identified in the contract. The verification that these factual requirements are met is the responsibility of the Administration through the assessment of the evidence provided.

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