Landlords in Spain can deduct depreciation on rental properties as a key expense in their tax report (IRPF if resident tax payer or IRNR if non resident tax payer via Modelo 210), reducing taxable rental income. The Spanish Tax Agency allows up to 3% annually on the higher of the acquisition cost (excluding land value) or the cadastral value of the building. This applies to properties generating rental yields, helping offset the passage of time on the asset.
Official Calculation Rules
Per the Agencia Tributaria’s guidelines, apply 3% to the greater value between:
- Acquisition cost paid: For purchased properties, this includes the purchase price plus inherent costs like notary fees, registration, real estate agent fees, and transfer taxes; excluding the value of the land. For inherited or donated properties, use the value from Inheritance Tax plus related costs and also discount the value of the land. The cadaster will breakdown the value of the property into the value of the land and the value of the construction.
- Cadastral value of the building: use this amount only when the adquisiton costs paid are smallen than the casastral value of the property.
You can request a certificate with all the values from the Cadaster. Alternatively, the IBI (Impuesto de Bienes Inmuebles) receipt will also show the cadastral value and the value of the land, as this tax is also calculates as a percentage of the cadastral value.
Amortization is proportional to days rented, therefore this decuction only applies when the property has been rented; non-rental periods trigger imputed income at 1.1% or 2% of cadastral value.
Accumulated deductions cannot exceed the building’s total acquisition value. Full details in the Agencia Tributaria’s official manual.
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