The 50%/60%/90% IRPF Rental Reduction, Explained
Spain's rental income reduction isn't one flat percentage — it's a table of cases, and picking the wrong one can meaningfully misstate what you owe. Here's the structure, per the AEAT Manual Práctico Renta (Art. 23.2).
The table
| Situation | Reduction |
|---|---|
| Contract signed before 26 May 2023 | 60% |
| New contract after 26 May 2023, in a tensioned zone, where rent was reduced more than 5% vs. the previous contract | 90% |
| First rental to a tenant aged 18-35 in a tensioned zone, or social/public-use housing | 70% |
| Property finished a rehabilitation in the prior 2 years | 60% |
| Everything else that qualifies (the post-2023-05-26 general default) | 50% |
How to actually read this
The cases aren't cumulative or optional to pick from — your situation determines which single case applies, generally following this logic:
- Was your contract signed before 26 May 2023? If yes, 60% applies (a grandfathered rate), regardless of other factors.
- If signed after that date: is the property in a declared tensioned zone? If yes, check whether the rent was reduced by more than 5% versus the prior contract (90%) or whether it's a first rental to an 18-35 tenant or social/public housing (70%).
- Recently rehabilitated property: 60%, if that's the applicable circumstance and doesn't overlap with a higher-tier case above.
- None of the above, but otherwise a qualifying housing rental: 50% default.
A worked example
Take net rental income (after deductible expenses) of €6,000/year on a qualifying contract signed after 26 May 2023, in a non-tensioned area, with no special tenant-age or rehabilitation circumstances — the general 50% default applies:
- Taxable base after reduction: €6,000 × (1 − 0.50) = €3,000
- That €3,000 (not the full €6,000) is what gets added to your other income and taxed at your marginal rate.
Compare that to the same €6,000 net income under the 90% case (new tensioned-zone contract with a >5% rent cut): taxable base drops to just €600 — a dramatically different tax outcome from the same underlying rental income, purely based on which case applies.
Two guardrails worth knowing
- A negative net income doesn't get a positive reduction applied — the reduction only reduces a positive taxable amount.
- Non-housing and tourist/short-term rentals generally don't qualify for this reduction regime at all — it's specifically for qualifying housing use.
Quick answers
What if I genuinely don't know whether my property is in a tensioned zone? This is common enough that it's worth flagging explicitly: don't guess. Confirm with the relevant regional housing authority — see our tensioned zone guide for why this isn't always straightforward to determine.
Can this table change? Yes, and it's explicitly flagged as high-risk to get wrong — review it against the current AEAT manual annually and whenever legal changes are announced, not just once when you first learn about it.
This article offers general, educational information and does not constitute tax, legal, or financial advice. Confirm which case applies to your specific situation with a qualified tax professional.