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V1785-24 17 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

60% reduction in residential rent tax relief requires primary purpose to be meeting the tenant's permanent housing needs

A query was raised regarding whether the 60% reduction on net income from residential rentals can be applied under the 2023 regulations. The Directorate-General for Taxes (DGT) ruled that this reduction is only applicable if the primary purpose of the lease is to satisfy the tenant's permanent housing needs.

The question raised

Whether the application of the sixty percent reduction under Article 23.2 of the Personal Income Tax Law is appropriate, in accordance with its wording in force for 2023.

The DGT's ruling

To apply the reduction provided in Article 23.2 of the Personal Income Tax Law (LIRPF), the lease must be for residential purposes according to the Urban Leasing Act (LAU), meaning it must concern a building whose primary purpose is to satisfy the permanent housing needs of the lessee. Seasonal rentals or student rentals that do not seek to satisfy such permanent need do not allow for the reduction. The accreditation of this requirement is a matter of fact that must be proven by the taxpayer.

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