The 2021 Income campaign is about to start. As with every year, many questions arise regarding deductible expenses in each autonomous community. A common query concerns rental deductions in residential areas. In the Valencian Community, for example, there are two personal income tax deductions related to renting a habitual residence. This article explains what these deductions are and how they can be claimed to reduce the rental portion of the income tax bill.
How do I know if the Treasury has refunded me or I have to pay the Rent?
Deduction of 5% of income from residential rentals
The maximum annual base for this deduction is set at 3,000 euros. For rental income to qualify, it must not exceed the reference price for private rentals in the Valencian Community. The following requirements apply:
What is the deadline for filing a 2021 Income Tax return?
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Income from all residential rental contracts initiated during the tax period must be included.
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If the property was previously rented for under three years, the tenant may not coincide with the tenant in the new contract.
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The leased property must be present in certain regions as part of the filing requirements.
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A bail deposit should be established before the end of the tax period.
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Deduction for habitual residential rent
This deduction also offsets amounts paid for rent of the habitual residence for tenants in the Valencian Community. The rent must be for the usual residence, and it is subject to the following conditions: the contract date must be after April 23, 1998, and the contract duration must be one year or longer.
When do you need to file your income tax return?
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10 percent of the eligible amount, with a limit of 700 euros.
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If the tenant meets one of the following conditions, 25 percent with a limit of 850 euros; 30 percent with a limit of 1,000 euros if two or more conditions are met:
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Being aged 35 or younger.
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Having a physical or sensory disability of at least 65 percent, or an intellectual disability of at least 33 percent.
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Being recognized as a victim of gender-based violence.
Do Bizum payments need to be declared to the Treasury?
If you live in the Valencian Community, the requirements for deducting rent from the income statement are as follows:
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The rental must be for the habitual residence where the occupant actually resides, with the contract dated after April 23, 1998 and lasting one year or more.
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During at least half of the tax period, neither the taxpayer nor any member of the household owns another home within 100 kilometers of the rented property.
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The taxpayer must not claim deductions for the same tax period for investments in the habitual residence, excluding amounts deposited in residential accounts.
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The sum of the general tax base and the savings tax base must not exceed 30,000 euros for individual taxation or 50,000 euros for joint taxation.
If you live in the Community of Valencia, these are the expenses you can deduct from your Income Tax return.
Generally, the deductible amount applies only to taxpayers whose total general tax base and taxable savings base is below 26,000 euros in individual taxation or below 46,000 euros in joint taxation.
When can you see the income outline?
If the combined total of the general tax base and the savings base falls between 26,000 euros and 30,000 euros in individual taxation, or between 46,000 euros and 50,000 euros in joint taxation, the deduction amounts and limits adjust accordingly.
Do retirees have to file Income Tax returns?
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In individual taxation, the deduction amount or limit is multiplied by a percentage calculated with the following formula: 100 × [1 – 4,000 / (general base + savings base) / 26,000].
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In joint taxation, the deduction amount or limit is multiplied by a percentage calculated with: 100 × [1 – 4,000 / (general base + savings base) / 46,000].
Note: The information provided here reflects typical scenarios in the Valencian Community and is intended for general guidance. For personalized advice, individuals should consult the official Treasury resources and local tax authorities. Attribution: official tax guidance is issued by the Treasury and regional authorities.