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V2757-14 14 October 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimiento neto

60% Income Tax reduction unavailable if the tenant is a commercial company

A property owner leases a dwelling to a company for use as employee accommodation. The Directorate General for Taxes (DGT) rules that the rental income reduction does not apply because the tenant is a legal entity rather than a natural person.

The question raised

Application of the reduction in net income in Personal Income Tax.

The DGT's ruling

To apply the reduction in net income for the lease of residential property, the lease must pertain to a building whose primary purpose is to satisfy the permanent housing needs of the lessee. Since the lessee is a commercial company, the contract does not constitute a residential lease for Personal Income Tax purposes, regardless of whether the company allocates the property for an employee's residence.

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