Spain adjusts property rental tax breaks for 2026, impacting homeowners

Spanish taxpayers holding residential rental properties face a significant shift in tax deductions for income earned in 2025, as clarified by the Ministry of Finance. The changes, impacting declarations due in 2026, will affect how much of rental income can be deducted, creating a complex landscape for landlords.

Rental income tax relief gets a 2026 overhaul

The key change revolves around the application of deductions to rental income earned from properties used as primary residences. Previously, owners who continued renting under contracts signed before May 26, 2023, could deduct 60% of the net positive income. However, new contracts and those modified after that date face a tiered system with varying reduction percentages.

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