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V2612-21 27 October 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Expenses for holiday rentals are only deductible for Income Tax in proportion to the rental period

A homeowner in the Canary Islands with a property for holiday rentals has enquired about VAT obligations regarding platform commissions and the deductibility of expenses for Income Tax purposes. The Directorate General for Tax (DGT) states that it lacks jurisdiction over VAT as the property is located in the Canary Islands and clarifies that, for Income Tax, expenses are only deductible in proportion to the time the property is rented.

The question raised

Whether there is an obligation to comply with any formal requirement of Value Added Tax arising from the payment of commissions to the digital platform.

The DGT's ruling

In Personal Income Tax, expenses necessary to obtain income from real estate capital are deductible provided there is a correlation with the income. Annual expenses, such as depreciation, Property Tax (IBI), or insurance, may only be deducted proportionally to the number of days within the tax period during which the property is effectively leased. The status of expectation of rental must be substantiated by the owner.

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