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V2985-21 24 November 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

60% tax reduction on residential rent applicable if contract identifies the specific individual occupant

A landlord inquired whether the 60% tax reduction on income from real estate capital could be applied when renting a property to a company for a worker's residence. The Directorate General for Taxes (DGT) ruled that this is possible, provided the contract proves the property is intended for the residence of a specific natural person.

The question raised

Whether there is a right to the 60 percent reduction of the positive net yield of real estate capital in the Personal Income Tax.

The DGT's ruling

The reduction provided in Article 23.2 of the Personal Income Tax Law (LIRPF) is applicable when the lessee is a legal entity, provided it is proven that the property is intended for the housing of specific natural persons. Compliance with this requirement depends on the terms of the lease agreement identifying the exclusive use of the dwelling for a specific natural person. The assessment of whether these facts are met is the responsibility of the Management and Inspection bodies.

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