Sánchez government tweaks rental tax relief, reducing deductions for landlords who raise rents
The Spanish government announced changes to rental income tax deductions, cutting the relief landlords receive when they increase rent levels.
Following the rejection of earlier housing decrees, the Sánchez administration has introduced a revised tax framework for rental income, published in the BOE. Under the new rules, landlords who maintain one outlet rent continue to enjoy a 50% IRPF deduction, but any increase triggers a stepped reduction: 40% for up to a 5% rise, 30% for 5%-10%, 25% for 10%-15%, 20% for 15%-20%, and 15% for hikes above 20%. The government frames the change as a new incentive to keep rents low, while analysts note it will increase tax receipts without altering nominal tax rates.
Simulations show that for a landlord earning a 40,000-euro salary and raising rent from 1,000 to 1,050 euros per month, the additional tax would be about 437 euros, leaving only roughly 163 euros of net gain. Similar calculations for median-income landlords indicate the tax authority would capture more than half of any rent increase.
Why it matters
The policy could raise housing costs for tenants by discouraging landlords from lowering rents while increasing tax revenue for the state.
In this story
