Spanish landlord tax reductions in 2026: a contract-by-contract guide

1.What should I check before the percentage? New

art. 23.2 de la Ley 35/2006

The reduction applies to an individual's positive net property income from leasing property for use as a home under article 2.1 LAU. It is not a reduction of rent received or a fixed tax-credit percentage.

Gather six facts: contract date, whether it is a new contract or first-time letting, previous updated and new rent, price reference, stressed-area status and tenant age. Add large-holder status and any rehabilitation or social rental.

The new-contract and first-time-letting scenarios exclude anyone who is a large-scale holder at signing. Social-rental and rehabilitation rules appear separately in the Act.

It applies only to positive net income declared in a self-assessment filed before a data-verification, limited-check or inspection procedure covering that income begins. It does not apply to hidden income or improperly deducted expenses later regularised.

2.New contract with rent reduced by more than 5%: 100%, 95%, 90%, 85% or 70%

art. 23.2 de la Ley 35/2006

If the same landlord signs a new contract and initial rent falls by more than 5% compared with the previous contract's last rent for that home after applying its annual-update clause, this group applies. The landlord must not be a large-scale holder.

The reduction is 100 per cent when, after the five-year minimum or final extension under articles 9 and 10, you sign another contract with the same tenant. It is also 100 per cent with a different tenant if new initial rent is below the applicable reference-system maximum.

If it is not 100%, it may be 95 per cent in a stressed area with a tenant aged 18–35; 90 per cent in a stressed area; 85 per cent with a tenant aged 18–35 outside that scenario; or 70 per cent in remaining cases.

With several tenants, the age-based reduction applies only to the share of income proportional to qualifying tenants. «More than 5%» is strict: an exactly 5% reduction does not enter this group.

3.New contract with no increase or an increase: 50%, 40%, 30%, 25%, 20% or 15%

art. 23.2 de la Ley 35/2006

If new initial rent is not above the previous updated rent, the reduction is 50 per cent. An exactly 5% reduction also falls here because it does not exceed the previous group's «more than 5%» threshold.

If new initial rent increases compared with the previous updated rent, the reduction depends on the increase: 40 per cent up to 5%; 30 per cent above 5% and up to 10%; 25 per cent above 10% and up to 15%; 20 per cent above 15% and up to 20%; and 15 per cent above 20%.

These percentages also belong to the new-contract-by-the-same-landlord scenarios, with the large-holder exclusion and other article 23.2 conditions.

4.First-time letting: 100%, 95%, 90%, 85% or 50%

art. 23.2 de la Ley 35/2006

When you rent the home for the first time and are not a large-scale holder, the reduction is 100 per cent if initial rent is below the applicable reference-system maximum.

If that requirement is not met, it may be 95 per cent in a stressed area with a tenant aged 18–35; 90 per cent in a stressed area; 85 per cent with a tenant aged 18–35; or 50 per cent when rent is equal to or above the reference maximum.

The age reduction is also prorated if only some tenants are aged 18–35. Area and age conditions must be met at signing and continue during the contract for the corresponding reduction.

5.Social rental and rehabilitation: 70% and 60%

art. 23.2 de la Ley 35/2006

The reduction is 70 per cent when the tenant is a public administration or non-profit entity under the special Act 49/2002 regime that uses the home for social renting below the aid-programme rent, housing vulnerable people, or when the home belongs to a public programme with capped rent.

It is 60 per cent when the home has undergone rehabilitation within the IRPF Regulation definition, completed in the two years before the contract is signed.

Keep evidence of the social purpose or rehabilitation and its dates. Do not treat ordinary conservation repairs as tax-qualifying rehabilitation without checking the regulatory definition.

6.Extensions: when can 80% apply?

art. 10.1art. 23.2 de la Ley 35/2006

During a tacit extension under article 10.1 LAU, the reduction is 80 per cent if initial rent does not exceed the reference maximum at the time of extension and the landlord is not a large-scale holder.

The transitional provision allows this 80% regardless of contract date when the article 9 five-year minimum is completed after 1 December 2026. Check the date and reference value at that time.

7.Which transitional rules and limits matter?

art. 17.6art. 23.2 de la Ley 35/2006

Contracts predating Act 12/2023 keep the reduction from the wording in force on 31 December 2021. Contracts signed from that Act's entry into force through 1 December 2026 use the wording in force on 31 December 2025, except for the specific 80% extension rule (thirty-eighth transitional provision).

Percentages are not cumulative: if several scenarios apply to the same net income, only the highest applies. No reduction is available for contracts breaching article 17.6 LAU on rent setting in stressed areas.

Other rules change from 1 January 2027, including minimum income for related-party rentals and imputed property income. Do not confuse these with the rental reduction percentage.

8.The law behind this guide

The percentages are in article 23.2 of Act 35/2006, amended by Royal Decree-law 29/2026, with transition in the thirty-eighth transitional provision. The decree is subject to validation by Congress. This is general guidance, not a personalised tax calculation.