The Canary Islands region has a specific deduction for renting. Specifically, it allows a rebate of 20% of the money paid during the 2018 tax year up to a maximum of 600 euros per year. The characteristics to be fulfilled are:
- Not having a taxable income of more than 20,000 euros per year (30,000 euros in the case of joint taxation), which can be found in boxes 0435 and 0460 on pages 13 and 14 of the tax return
- The amounts paid exceed 10% of the taxpayer’s general taxable income.
- The VAT number of the lessor must be included.
There is another deduction for the rental of the main residence linked to certain dation in payment operations (the owner gives his or her home to the bank in exchange for cancelling the mortgage debt and remaining as a tenant). This deduction is not applicable in the case of taxpayers who died before 5 December 2018. It allows a 25% rebate on the money paid in 2018 for the lease. The maximum amount of the deduction is 1,200 euros per year, both in individual and joint taxation. This tax advantage will only be applicable in the case of the transfer of the owner’s main residence to the creditor financial institution, or to a real estate subsidiary of its group, because it cannot meet the payment of the loans or mortgage credits granted for its acquisition, provided that the transferor continues to occupy the property under a lease with option to purchase contract signed with the bank. Taxpayers may not earn more than €24,000 per year in individual taxation or €34,000 per year in joint taxation. On the landlord’s side, there is a deduction of 10% of the income from renting the tenant’s main residence, but only if the rent is paid at socially sustainable prices. To determine whether the prices are socially sustainable, the requirements are as follows:
- The rent may not exceed 30% of the tenant’s salary; the annualised rent may not exceed 10% of the cadastral value of the property;
- The tenant is not paid more than €24,000 per year.
- The landlord must indicate in his IRPF declarations the tenant’s NIF and the cadastral reference number of the house.
This community also allows a further deduction, but in this case to the lessor. The lessor can deduct 75% of the expenses paid in 2018 for credit insurance premiums covering, in whole or in part, the non-payment of income to which the taxpayer is entitled as a result of the rental of one or more properties to a third party for use as a dwelling. The maximum amount of this deduction is €150 per year. In order for the landlord to be able to deduct the rent, he must:
- Maintain a lease of one year or more
- Have deposited the security deposit with the relevant body
- To declare the income derived from the rental of the dwelling as income from real estate capital in the Personal Income Tax.
- The monthly rent must not exceed 800 €.
