If you own a rental apartment, there’s big news for you. Since January 1 of this year, a series of changes to the Housing Law have come into effect, allowing you to claim significant deductions on your 2025 tax return. The main goal of these changes is to promote the rental of primary residences and, as a result, to curb the steady rise of rents across the country.
What do these tax changes involve?
In general terms, if you own a rental property, you can deduct 50% of your personal income tax (IRPF). The twist is that as you lower the rent you offer to tenants, your tax benefits increase. The lower the rent threshold, the more you save on your tax bill to be filed in 2025.
Additional reductions based on rent price reductions
If you decide to reduce the rent in stressed areas – still to be defined by the autonomous communities – you can qualify for a bonus of up to 70% on your tax return. This percentage applies if the tenant is a public entity or a non-profit organization and if the dwelling is part of the social rental program with a monthly rent below the amount set in the National Housing Plan.
Even more, if you rent a property for the first time and it is located in a stressed area, or if the tenant is a person between 18 and 35 years old, or someone in economically vulnerable circumstances or families with income below the Public Indicator of Multiple Effect Income (IPREM), you can also deduct up to 70% on your tax return.
The best part is that if you rent in a stressed area at a price at least 5% below the amount in a prior lease contract, you can secure a 90% reduction on your IRPF. This means keeping more money in your pocket while offering more affordable rents to tenants.
Bonuses for recent renovations
If you have carried out renovations on the dwelling you plan to rent within the two years before the start of the contract, you can also obtain a minimum 60% bonus on the IRPF from the income earned. This is a strong opportunity for owners who have invested in improving the property’s quality.
In summary, changes to the Housing Law have opened a wide range of opportunities for rental property owners. Deductions that can reach up to 90% and additional bonuses for price reductions or recent renovations make investing in the rental market more attractive than ever. This benefits not only owners but can also help slow the escalation of rental prices, a hopeful development for all players in the housing market. Take advantage of these opportunities and make your 2025 tax return far more favorable.