A practical example of the expenses that you can deduct income


Six in 10 Spaniards are unaware of the tax benefits related to housing. A lack of knowledge that leads many of them not fully benefit from the reductions in the income statement. This is the case of landlords, ie landlords who earn income by renting housing. Home to which, moreover, the Tax Agency closely follows, as has begun to monitor those owners who have announced rent in different advertising media, including the Internet, you must declare whether they have received income for this item .

Yields that every owner who rents is required to declare, but that go "beyond the simple sum of the income earned by leasing", as they say from Protected rental, which lists up to seven types of expenses that can be deducted of annual revenues obtained:

1. The interests of foreign capital invested in the acquisition or improvement of property or other rights and financing costs. Or what is the same, the interest on loans being paid for the purchase of housing. 2. Taxes and surcharges nonstate and state fees and surcharges: IBI, waste rate, lighting ... 3. The amounts accrued by third parties directly or indirectly consideration as a result of personal services, such as management, monitoring , net or the like. 4. Those caused by the formalization of the lease, sublease, assignment or constitution, and the defense of a legal nature relating to property, rights or income. 5. doubtful balances provided this circumstance is sufficiently justified. 6. The cost of maintenance and repair. 7. The amount of premiums of insurance contracts, whether civil liability, fire, theft, glass breakage or other similar services, on goods or rights to producers yields. 8. The amounts for services or supplies (electricity, water, gas, telephone). 9. The amounts for amortization of property under the conditions set by regulation.

A practical example

Suppose a home that was bought by 100,000 euros, using bank financing, it ie a mortgage. By renting this apartment, the landlord has obtained an annual income of 10,000 euros. That net income can be deducted as expenses, the following amounts:

1. For the formalization of the lease have used the services of a lawyer, who were paid a fee amounting to 150 euros. "This amount is likely to include it as a deductible expense," says Alfredo Garcia, director of Protected rent.

2. For the acquisition of rental housing has been used third-party financing, and is paying the bank interest amount for the amortization of the loan of 200 euros per year. "Eye, is interest, not the capital. Usually the bank that facilitates this type of information, "says Garcia.

3. During the life of the lease, the property may be damaged or malfunction. Conservation expenditures are also subject to deduction on annual income earned by acting as limit the amount of the gross income obtained. The excess may be reduced in the next four years. "In our example, repairs to a leak by 100 euros are made," explains co-founder of Protected rent.

4. Also the owner has to face a series of payments in a matter of taxes and municipal taxes. Depending on the agreement on the lease and who take care of them, the owner may deduct the yields obtained. "Examples of taxes and fees can cite the IBI, the rate of garbage or sewer. Let the IBI amounts to 300 euros, the rate of garbage and sewage to 30 euros to 20 euros, "says Alfredo Garcia.

5. "We can not forget that for various reasons, the tenant may fail to fulfill its payment obligation. In these cases, it is also possible deduction, provided that the debtor is bankrupt or whenever between the time of the first collection management by the taxpayer and the end of the tax period had elapsed more than six months and it had not produced the renewal of the credit. If the balance of doubtful debts was subsequently charged to your deduction shall be considered as income in the year in which the recovery occurs, "explains legal sources of Protected rent. This example should more than six months ago 833,33 euros for the January monthly fee.

6. If the event that the property was part of, for example, an urban complex was given, they could also deduct the amounts paid in personal services, such as management, security, caretaking or similar. This example has been paid for administration 50 euros.

7. As time passes, housing suffers an effective depreciation is calculated objectively by applying a 3% of the greater of the following values: cost of acquisition satisfied or assessed value, excluding the land value. In the example, the higher of the two values ​​are the 100,000 of the purchase, which the amount to apply as an expense would amount to $ 3,000 (3% of 100,000 euros).

8. "The owner, when renting your home, seeks above all security and tranquility. Rental in Protected we have a wide variety of insurance covering everything from unpaid rent or supplies, to vandalize and legal defense. In our example you have taken out insurance covering the defense of the above responsibilities. Premiums paid were 200 euros, this being deductible from the gross income from real estate, "says Alfredo Garcia.

Summary of deductions

In this example, income from rent housing amounted to 10,000 euros to which we must deduct the expenses, 5,117 euros (150 + 200 + 100 + 300 + 30 + 20 + 833 + 50 + 3000 + 200), which we obtain a net income of 4,883 euros.

Tax Income (IRPF) states that in cases of leases of real property for housing, positive net yield is reduced by 60%.

"From January 1, 2015, the exemption of 100% is suppressed in leases under 30 years. Landlords can practice only a reduction of 60% in net income for the rental of property, regardless of the age of the tenants, "Portal collects Housing Community of Madrid.

In the example, the reduction would amount to 2,929.80 euros (which is the result of applying 60% to 4,883.00 euros) and the yield obtained by renting housing 1953.20 euros (4,883 less 2929.80 ). "As we can see, the income tax treatment offered to lease is fairly benign," explained from Protected rent.