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Some homeowners have a fear that if they put their house on the long  term rental market they will have to pay a lot of taxes and this stops them from deciding  to do so.  

However, it is an unfounded fear, since although the landlord has to declare the income obtained from  the rent, this does not have to be expensive, since  there are several reductions which may be applicable  - in some cases up to 100%   We have given you some examples of what are valid reductions.

Everyone knows how rent basically works: an amount is paid for the use of a certain asset for a specific time. The case of housing is no different. The tenant will pay an amount to be able to use a house during the set out in the contract.   What does change is that there is a specific legislation for rent, which is the one called  the Law of Urban Leases and that determines different types of rental and the various tax implications.
 
The lease for a habitual residence must always  have a contract which  held by the regional  mediate a contract. . For tax purposes, the landlord receives a series of income for his flat and has to face a number of expenses. What  the Hacienda is interested in is the result of subtracting those expenses from income.

In principal the costs which are generated by renting a house are the following:-

- Interest and financing expenses of capital invested in the acquisition or improvement of housing (mortgages, loans, etc.)
- Interest and financing expenses of the equipment needed in the dwelling (furniture, appliances, boilers ...)
- State taxes and fees that impact on housing such as the IBI, the rate for collection of garbage or sewage, for example, as well as community expenses, provided the owner pays. If you are charging the tenant for them then you cannot use them to reduce your tax  react to the tenant you can not subtract them.
- The expenses of formalizing the lease (invoice of the real estate agency, energy certificate, habitability certificate, etc ...)
- Maintenance and repair costs.
- Expenses for services and supplies (electricity, gas, water, telephone, etc.).
- Administration, surveillance, porterage and other services related to property.
- Premiums for home insurance contracts (Insurance contracts, such as civil liability, fire, theft, etc.).


Once the deductible expenses have been calculated , they should only be deducted from the net income, which is usually the rent paid by the person.  The previous operation will give us the tax base of the rent, on which also you can make a series of reductions depending on the age of the tenant. If you choose to rent to young people under 30 years you can apply a reduction of 100% on the benefits obtained provided that some requirements are met. For those over 30, the reduction is limited to 60%, which means you will only pay  on 40% of your earnings.
 
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