income tax deductions on property madrid

Income Tax Deductions in MadridRelating to Property Dealings

Income Tax Deduction Analysis

If you have dealings with property and pay income tax in

Madrid then you may be in line for a tax break.

With so many foreign nationals now based in this area of

Spain it is worthwhile setting out a list of the different tax

deductions that are available for those who are renting or

buying a property in the area.

Income Tax Deduction Analysis

Local tax laws in Madrid are enacted by the regional

parliament in Madrid City with the most important provisions

contained in Decreto Legislativo 01/2010.

The most important deductions available are as follows:

Mortgage Relief Principal Private Residence

Where a mortgage is used to purchase a property destined

to be the principal private residence of the taxpayer then a

deduction may be made where there is an increase in

financing costs due to fluctuations in interest rates


The annual limit is €9,015 and applies equally to the

refurbishment of a property or adapting the property to

make it appropriate for the use of a disabled person.


The rebate is calculated by having reference to the

difference in the Euribar 1-year interest rate as of the

current fiscal year and the same rate in 2007.

For renting of the principal personal residence

A taxpayer under the age of 35 may deduct 20% up to a

maximum of €840 annually if they rent their primary

personal residence.

The amount paid in rent must be equal to or greater than

10% of the income of the taxpayer

For the Purchase of a New Home

Those taxpayers currently entitled to a deduction for

purchase of a primary residence may add a further 1%

deduction where:

The property is new

(This deduction may not be applied to renovations etc)

For the Purchase of a Primary Residence

Those taxpayers who would have been eligible for this

rebate (had it not been withdrawn by the central

government) may apply the deduction to the regional

government’s portion of the tax.

The amount to deduct is calculated as the difference

between:

For the Purchase of a Primary Residence

• The deduction available on the regional government

portion of the rebate as of 31/12/2008, and

• The deduction available on the regional government

portion of the rebate as per current legislation

If the result is negative, no rebate is due.

Simply put, property transactions in Spain is unique to

this country with legal assumptions made here that just

don't exist elsewhere

Pitfalls Dealing with Property in Spain

If you would be interested in a free and comprehensive

guide that will help you to avoid the typical pitfalls the

foreign buyers of property fall into as well as dealing

with issues such as...

Guide to Dealing with Property in Spain

To find out how to deal with such issues as...

Which legal checks on a property

are vital to avoid any problems

The step-by-step process

of buying a property in Spain

As well as...

Typical ploys to watch out for

to avoid being defrauded.

Property taxes you pay and

those you don't!

And much more...

Download the myAdvocate Spain guide to Dealing with Property in Spain by clicking on:

Secrets to Dealing with Property in Spain

Or for further information on the property purchase process specifically go to:

Real estate lawyer Spain

If you need legal advice in Spain but are concerned

about dealing with lawyers about which you have

little or no background information, then get peace

of mind at no additional cost by using the:

'Look before you leap'

Lawyer Verification System

myAdvocate Spain™

More information and contact details:

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Tel. +34 931 845 073

income tax deductions on property madrid

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