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V0729-20 6 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · arrendamiento de vivienda

60% tax reduction for student rentals unavailable for seasonal contracts

The Directorate General for Taxes (DGT) has been asked whether renting property to students during the academic year allows for the 60% income tax (IRPF) reduction. The DGT ruled that this reduction does not apply because seasonal contracts do not satisfy a permanent housing need.

The question raised

Application of the reduction under Article 23.2 of the Tax Law, and whether the Urban Leasing Act would be applicable to determine the existence of a residential lease for the purposes of applying said reduction

The DGT's ruling

The reduction provided for in Article 23.2 of the Personal Income Tax Law (LIRPF) applies only to residential leases as defined by the Urban Leasing Act (LAU). Seasonal leases, such as those entered into for the university academic year, are considered for purposes other than residential use pursuant to Article 3 of the LAU. Therefore, as it is not a residential lease, the tax reduction is not applicable.

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