Owning a property, renting or renting a home are other conditions that, in certain cases, may be subject to tax benefits for taxpayers who hold them. From the Registry of Tax Advisors (REAF) of the General Council of Economists (CGE) they review all the elements that it will be better to take into account before the end of the year, if they want to avoid unpleasant surprises in the income statement to be presented in 2021 .
Returns on real estate capital
Do you own a property and rent it? If this constitutes the tenant’s habitual residence, he may apply a reduction of the net income of 60%. On the contrary, you will not be able to benefit from the reduction if you rent seasonally or in a partnership without the employee who occupies the house being appointed. Nor may it apply if the rental includes the provision of services of structures similar to a hotel, such as cleaning or changing sheets.
Do you have to make expenses in your rented property? Well, “anticipate them in this exercise to reduce the net return and, in this way, defer the taxation for the lease,” they suggest from the REAF. However, keep in mind that, if you carry out repair and maintenance works, together with financial expenses, these expenses are limited in deduction to a maximum of the amount of income. The tax advisers of the CGE also underline that, according to the General State Budgets, next year the tax rate for incomes over 300,000 euros will rise two percentage points. For this reason, “if the set of returns exceeds this limit, it is convenient to defer expenses to 2021”, they advise.
Have you acquired a property for free? To calculate the depreciation expense, which is 3% of the higher of the acquisition cost satisfied or the cadastral value of the construction, it is considered that the latter is not the declared value in Inheritance and Gift Tax, but rather the amount paid for said tax, with the accumulated limit of the value.
Has your property been ‘squatted’? If you have a property that was illegally occupied this year, you will not have to impute real estate income from the start of the judicial eviction procedure, without having to wait for its resolution.
Did you buy your home before 2013? Then, you are still entitled to the deduction for the acquisition of a habitual residence and you can take advantage of it to pay off more mortgage before the end of the year, up to 9,040 euros. Remember that, “if the home was acquired by the community of community property and the spouses present an individual declaration, each one will be able to deduct 9,040 euros in their declaration,” emphasize the tax advisers of the CGE.
Are you entitled to the housing deduction and this year have you separated or divorced? If the home and the entire mortgage loan were awarded, you can apply the deduction for 100% of the amounts paid, provided that the ex-spouse who ceases to own the home would have been entitled to the deduction in previous years, without having take into account the bases deduced by him. “This tax treatment is novel, since previously the administrative criterion did not allow deducting for the 50% acquired from the spouse after 2012,” they explain from the REAF. “The taxpayer can regularize the fiscal years not prescribed by applying this criterion”, they add.
Do you live for rent? Check if your Autonomous Community regulates any deduction for rent and, if so, verify compliance with the requirements. In some regions, the owner requests the deposit of the guarantee before the competent body in housing matters. “It is a procedure that can be completed before the end of the year,” they warn from the REAF.
Are you entitled to the transitional rental deduction regime? If so, if this year you have renewed the rental agreement, or signed a new one, even with a new owner, but in the same home, keep in mind that you retain your right to the deduction.
Capital gains and losses
Next year are you planning to sell a property for which you have granted a purchase option this year? You should bear in mind that the income obtained is a capital gain to be included in the general base, which is taxed independently of the one that, where appropriate, comes from the sale.
Do you own two properties together with a family member? It could be, for example, a property acquired by inheritance and another that they have bought together. If you plan to adjudicate each one a property before the end of the year, do not forget that, in the event of two different communities of property, if the community members exchange property of one for property of the other, the operation will be taxed as an exchange. “The best thing, in this case, is to request the guidance of an expert before carrying out the operation”, recommend the tax advisers of the CGE.