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Practical manual for Income Tax 2024. Part 1

Returns on capital assets

Net Yield Reductions

Reduction for leasing of properties intended for housing

 Law 12/2023, of May 24, on the right to housing ( BOE of May 25) modifies article 23.2 of the Personal Income Tax Law to stimulate the rental of habitual housing at affordable prices, so that, with effect from January 1, 2024, the new reduction percentages apply to contracts signed from May 26, 2023, which are:

  • 90 percent, in the case of new rental contracts for housing in areas with a stressed residential market, with a reduction of at least 5 percent compared to the previous contract.

  • 70% when, not meeting the requirements for applying the 90% reduction, any of the following circumstances occur: whether it involves the incorporation into the market of housing intended for rent in areas with a stressed residential market and rented to young people between 18 and 35 years of age in said areas, or whether it involves incentivized or protected affordable housing, leased to the public administration or third sector or social economy entities that have the status of non-profit entities, or covered by a public housing program that limits rental income.

  • 60% of the net income when, not having applied to any of the above, rehabilitation works have been carried out in the two years prior to the date of the contract.

  • And 50% in any other case.

However, for previous contracts, a thirty-eighth transitional provision is introduced, maintaining the 60% reduction provided for in the wording in force as of December 31, 2021.