These incomes are those derived from the lease or from the use or enjoyment of real estate or real rights, unless they are related to economic activities.
Imputed income
If we are owners of the property or real rights of real estate not leased or assigned to third parties, nor are they involved in economic activities, these do not generate income from real estate capital, but are taxed by imputation, with the exception of habitual residence, the plots do not built and rustic buildings.
Economic activities
It is understood that the leasing of real estate is carried out as an economic activity when, for its exercise, at least one person employed with a full-time employment contract is used. And, in addition, the rent must be limited to the mere provision of the property, without providing services typical of the hotel industry such as cleaning, changing clothes, restaurants or leisure, among others.
doubtful balances
Royal Decree-Law 35/2020, on urgent support measures for the tourism, hospitality and commerce sectors, reduces by 2021 from six to three months the term for the amounts owed by tenants to be considered as a doubtful balance and can be deducted .
subletting
We find differentiated treatments for sublessor and owner or usufructuary. Thus, the amounts received by the sublessor are income from movable capital, while those of the owner or usufructuary in the price of the sublease obtain income from real estate capital, without applying the reduction for leasing real estate for housing.
business lease
They have a tax treatment as income from movable capital, but if it is limited to a business premises, the income is treated as real estate capital and is quantified according to its rules. It is necessary to distinguish between the lease of a business premises and that of a business itself.
Rent reduction in premises
This year, RD-l 35/2020 allows landlords other than large holders with a rental for use other than housing and whose tenants use the property for an economic activity, compute as a deductible expense the amount of the reduction in the rental income that they have voluntarily agreed as of March 14, 2020, corresponding to the monthly payments accrued in the months of January, February and March 2021.
Discounts on the lease of habitual residence due to the Covid
As a consequence of the health crisis and the state of emergency, for the calculation of the net return on real estate capital, the reductions in the rental of the main residence agreed with the tenant must be taken into account.
In addition, if the agreement is the deferral of the rent payments, it is not appropriate to reflect a performance in those months as the demandability of the rent has been deferred. This income is not payable, in accordance with article 14.1.a) of the Personal Income Tax Law, which provides that income from work and capital are allocated to the tax period in which they are payable by the recipient.
However, article 3.2 of Law 11/2021, of July 9, on prevention measures and the fight against tax fraud, with effect from July 11, 2021, clarify that this reduction can only be applied to income positive net calculated by the taxpayer in his declaration, without its application on the positive net return calculated during the processing of a verification procedure.
If the landlord does not agree to modify or reduce the amount set as the rental price or agree to defer payment, resulting in non-payment of rental income when due. Then, the amount corresponding to the lease of the property must be imputed as full return on real estate capital, even if it has not been received.
early resolution
The early termination of the contract is for the owner an improvement and not a deductible expense and for the lessee it constitutes a capital gain whose generation period is the one that corresponds based on the age of the lease.
Change of successive situations
If the property is leased for part of the year and the rest is kept closed, the rent constitutes income from real estate capital and that of the period not leased or the part not leased has imputed income, as long as it does not become our habitual residence. The amount of income and imputed income is determined in proportion to the number of days leased or not leased, during the year.
Common elements of the building
The leasing of part of the façade or the entrance hall by the community of owners gives rise to returns on real estate capital for the co-owners according to their participation in the community.
Assets assigned with the property
The amounts received or that correspond to receive due to the remaining assets transferred with the property, such as furniture and fixtures, excluding Value Added Tax (VAT) or the Canary Islands Indirect General Tax (IGIC) must be included.
Estimated returns
The benefits of assets or rights capable of generating income from real estate capital are presumed paid, unless proven otherwise. If we cannot present this proof, the valuation is made at its normal market value, meaning the consideration that would be agreed upon between independent parties, unless proven otherwise. In the case of modifying the amount of the rental price due to Covid, we can deduct the expenses incurred.
Vinculated operations
If the lease or sublease of real estate or the constitution or assignment of rights or faculties of use or enjoyment over them is made to a company with which we have related relationships, we must carry out their valuation at normal market value. In this way, we must comply with the documentation obligations of related-party transactions in the terms established in the Corporate Tax Regulations.
deductible expenses
To determine this net return, we can deduct all the expenses necessary to obtain it, as well as the amounts destined to the amortization of the property and the other assets assigned with it, provided that they respond to its effective depreciation and excluding VAT or IGIC.
As a consequence of the Covid, if we have modified the rental price or there is a deferral of its enforceability, we can deduct the expenses incurred, without it being necessary to allocate real estate income.
Interest and other financing expenses from third-party capital invested in acquiring or improving the asset, right or faculty of use or enjoyment are deductible, as well as, where appropriate, the assets assigned with it. The interest and other financing expenses of the period prior to the formalization of the lease will not be deductible.
Mortgage land clauses
The interest that due to the application of floor clauses we have paid in 2021 and on which before June 30, 2022 the agreement to return the amount is reached with the financial institution or as a consequence of a judicial sentence or an arbitration award, they cannot be deducted as an expense.
Deductible overhead
The expenses of conservation and repair of the goods are deductible, those of the yields. Those carried out regularly to maintain the normal use of material goods, such as painting, plastering or repairing facilities, have this consideration. Also, they have it, those for the replacement of elements, such as heating installations, elevators, security doors or others.
The amounts for the expansion or improvement of the assets are not deductible, as they constitute a greater acquisition value whose recovery is made with amortizations.
Maximum deduction limit
The maximum total amount to be deducted for interest and other financing expenses and for conservation and repair expenses may not exceed, for each asset or right, the amount of the full income obtained.
The excess can be deducted in the following four years, without being able to exceed, together with the expenses, for these same concepts of each of these years, the amount of the full yields obtained in each of them, for each good. or right. The amount pending deduction from 2017, 2018, 2019 and 2020 that is applied in this declaration with priority to the amounts that correspond to the 2021 financial year itself is deductible.
Other deductible expenses
Non-state taxes and surcharges are deductible, as well as state fees and surcharges, such as the IBI, fees for cleaning, garbage collection, lighting, etc., provided they affect the computed yields or the goods or rights that produce them. and, do not have a punitive nature.
Also, are the fees of the community of owners in properties under the horizontal property regime and those caused by the formalization of the lease, sublease, assignment or constitution of the right and those of legal defense related to the assets, rights or yields.
In addition, doubtful balances are, if this circumstance is sufficiently justified. Insurance premiums for civil liability, fire, theft, glass breakage or others of a similar nature on assets are deductible.
If we are the lessors who have paid them, the amounts allocated to services or supplies (water, electricity, gas and Internet, etc.) are deductible. These expenses are only deductible if they are borne and actually paid by the landlord and the landlord cannot deduct anything.
repayment amounts
Deductible expenses are the amounts destined to amortize the property and the other assets assigned with it, provided that they respond to their effective depreciation. Amortizations are considered to meet the effectiveness requirement when, in each year, they do not exceed the result of applying the percentage of 3% to the higher of the following values: the acquisition cost and the cadastral value. In the case of assets acquired for consideration, the accumulated amortization cannot exceed the acquisition cost of the property. Movable goods assigned together with the property will be amortizable as long as they are capable of being used for a period of time greater than one year.
The Supreme Court, in a judgment of September 15, has established that, to determine the amortization of real estate acquired free of charge by inheritance or donation, the acquisition cost paid is the value of the property acquired in application of the rules on Inheritance Tax o Donations or their verified value (excluding the value of the land), plus the expenses and taxes for the acquisition that correspond to the construction and all the investments and improvements…
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