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V1828-25 13 October 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

90% rental reduction in high-demand areas remains valid as conditions are met

The consultant asks whether the 90% rental reduction for new leases in high-demand areas applies throughout the entire contract or only for the first year, and whether it is lost if the area ceases to be high-demand. The tax authority responds that the reduction applies as long as the established conditions are met.

The question raised

It is requested to know whether the 90 percent reduction provided for in paragraph 2 of Article 23 of the Personal Income Tax Law would be applicable only during the first year of the lease or throughout the entire duration of the new contract, as well as whether the right to the reduction is lost in the event that the geographical area where the dwelling is located ceases to be declared as a stressed residential market area.

The DGT's ruling

To apply the 90% reduction, a new contract must be formalized in a stressed residential market area with an initial rent reduced by more than 5% compared to the last rent of the previous contract. The requirements must be met at the time of the execution of the contract, and the reduction shall be applicable as long as the same requirements continue to be met. If the dwelling ceases to be located in a stressed residential market area, the 90% reduction may no longer be applied, but the 50% reduction could be applied in any other case.

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