How much tax do you pay on letting a flat?

Question

José Manuel Alburquerque · Accepted Answer

What you receive in rent is declared on the following year's income tax return. The expenses of the flat are deducted from what you have received and, if the result is positive, the law lets you reduce it, generally by 50 % if the contract was signed on or after 26 May 2023 or by 60 % if it is earlier. What remains is added to your other income and is taxed at the rate that applies to your last euros, which for Catalan residents ranges, under the 2025 scale, from 19 % to 50 %. No VAT is charged on residential lettings and the tenant does not withhold anything from you. How it is calculated For the tax authorities, rent is income from property (“rendimiento del capital inmobiliario”), what a property you do not use for a business earns you. It is calculated flat by flat and year by year: Income is everything the tenant pays you during the year, including for furniture or for utilities they reimburse you for. Rent the tenant does not pay you must still be declared, unless you have agreed a reduction or a deferral with them. The expenses for the time the flat has been let are deducted, such as the IBI, the local property tax, service charges, insurance, repairs, loan interest and depreciation for wear and tear. If the result is positive, the allowance is applied. It does not exist for holiday lets and the prudent course for seasonal lets is not to count on it. What remains is added to your salary, your pension and your other income, except savings income, such as interest or dividends, which has its own scale. It is taxed under the general scale, the State scale plus that of your autonomous community. As the scale rises in bands, the rent is taxed at the rate on the last euros you earn, known as the marginal rate. An example Using the scale for the 2025 income tax return, the latest to have been filed, an owner resident in Catalonia who lets a flat for 1.000 euros a month would pay the following: Income for the year, 12.000 euros. Expenses, 7.000 euros. That is 600 of IBI, 1.200 of service charges, 300 of insurance, 400 of repairs and 4.500 of depreciation, 3 % of the 150.000 euros that the building is worth without the land. Net income, 5.000 euros. With the 50 % allowance, 2.500 are taxed. If the contract predates 26 May 2023, with the 60 % allowance, 2.000 are taxed. If the rest of your taxable base, which is the figure on which the tax is calculated, is 30.000 euros, those 2.500 are taxed at 31 %, 15 % State and 16 % Catalan. You pay 775 euros on the rent, or 620 with the 60 % allowance. What else you should know The tenant does not withhold anything from you, even if it is a company renting the flat as a home for its employees. However, for no VAT to be charged, the contract must identify the people who will live in the flat. No VAT is charged on residential lettings. If the October 2026 decree is ratified by Parliament (“convalidación”), that is, if the “Congreso”, the lower house, confirms it, from 1 December 2026 VAT will be charged, at 10 %, on furnished flats let for stays of up to thirty nights, unless they are the owner's main home. For the days on which the flat is empty and is not your home, the tax authorities treat 2 % of its cadastral value (the “valor catastral”) as income, or 1,1 % in many municipalities. If you let it to your spouse or to a relative up to the third degree, such as a child, a sibling or a nephew or niece, you cannot declare less than the tax authorities would count if the flat were empty.