The real estate market, in its constant search for a balance between housing supply and demand, has received relevant news from the fiscal sphere. The Directorate-General for Taxation (DGT) has issued a binding consultation (V0412/2025) which confirms a significant benefit for landlords: those renting rooms in their own home will be able to apply a 50% personal income tax reduction on the income obtained.
The fundamental key to this tax advantage lies in the purpose of renting. In order for the landlord to benefit from this reduction, it is essential that the rented room constitutes the tenant's permanent and habitual residence. This puts the focus on a way of Flexible Accommodation which is aligned with the need to offer stable residential solutions, helping to alleviate pressure on the long-term rental market.
It is crucial to note that this reduction explicitly excludes seasonal, tourist or holiday rentals. These types of Flexible Accommodationalthough vital for the tourism sector, have a different tax regime and do not benefit from this deduction. The lease contract must be formally subject to the Urban Lease Law (LAU) as a lease contract for residential use.
The responsibility to accredit that the rented room is the tenant's habitual residence rests entirely with the landlord. In the event of a possible inspection by the tax office, it will be the landlord who will have to provide evidence such as the rental contract and, if possible, the tenant's census registration, to prove that it is not a sporadic or short-term use.
The DGT has also been clear about the red lines: any irregularity detected by the administration, such as the concealment of income or the undue deduction of expenses, will not only involve the regularisation of the tax situation, but also the automatic loss of the right to apply the 50% reduction. This underlines the need for transparent and compliant fiscal management.
This confirmation by Tributos is of great relevance at a time when partial rental housing has become an increasingly widespread formula, both for homeowners seeking to supplement their income and for people in need of more affordable housing solutions. By providing a tax incentive, it is expected to encourage a greater supply of rooms for rent for residential use, boosting a specific aspect of the Flexible Accommodation which contributes to the solution of the housing problem.
