Depreciation of your home in your tax return: how to deduct it on a holiday let

Of all the expenses you can subtract from what your holiday flat brings in, depreciation is the oddest: not a single euro leaves your account that year and yet it reduces what you pay tax on. And it is easy to get wrong: people apply the 3% to the wrong value, include the land or count the whole year when the home only had guests for part of it.

Here is how the rules work it out, step by step and with a worked example. Everything that follows comes from the Law and Regulation of IRPF (Spanish personal income tax) and from the Agencia Tributaria's (the Spanish tax agency, also known as Hacienda) Manual práctico de Renta 2025; the links are at the end.

One clarification before starting: this guide covers the most common case, the owner who lets their home and declares what they receive as rendimiento del capital inmobiliario (income from real estate capital). If you also provide hotel-type services (the Manual cites restaurant, cleaning, laundry and similar services) or have at least one person employed full time to run the let, Hacienda treats it as an actividad económica (business activity) and the rules are different. Article 27.2 of the IRPF Law says so and the Manual práctico sets out the detail.

What depreciation is and how much you can subtract

Depreciation is IRPF's way of recognising that a home wears out with use and with the years. Article 23.1.b) of the IRPF Law lets you subtract that wear as an expense, provided it reflects actual depreciation.

For a property, the law already says when that is met: when each year's depreciation doesn't exceed 3%. It's a maximum, not a fixed amount.

What value the 3% is applied to

Here is the catch. The 3% is applied to the higher of these two values, and in both the land is taken out:

• The acquisition cost you paid. If you bought, it's the price plus the costs and taxes of the purchase: notary, land registry, Impuesto sobre Transmisiones Patrimoniales (transfer tax) or Actos Jurídicos Documentados (stamp duty), non-deductible VAT, agency fees. Investments and improvements you've made since also add to it.
• The cadastral value, the one shown on the IBI (council property tax) bill.

If you inherited the home or it was given to you, the acquisition cost is the value assigned to it for Impuesto sobre Sucesiones y Donaciones (inheritance and gift tax), plus the acquisition costs and taxes that correspond to the building.

Why the land doesn't count

Land doesn't wear out, so it isn't depreciated. The law and the regulation expressly exclude it.

The problem is that almost nobody knows what their land is worth. For that, article 14 of the IRPF Regulation gives a rule: if you don't know it, you split the acquisition cost in the same proportion as the cadastral value of the land and of the building on the IBI bill.

A worked example

Say a flat was bought for €220,000, with €22,000 of purchase costs and taxes. Acquisition cost: €242,000.

The IBI bill says the cadastral value is €110,000: €44,000 for the land and €66,000 for the building. So the building is 60% of the cadastral value.

• Acquisition cost without the land: 60% of €242,000 = €145,200.
• Cadastral value without the land: €66,000.

The first is higher. The maximum depreciation for a full year would be 3% of €145,200: €4,356.

Note the difference: had you taken the cadastral value of the building, you would get €1,980 a year. The rules let you use the higher of the two.

The holiday-let nuance: only the days let count

A holiday flat is rarely occupied all 365 days. And that changes the calculation.

The Manual práctico de Renta puts it like this: if the property wasn't let all year, depreciation, interest, insurance, owners' association fees, IBI, utilities and the other expenses are deducted only for the days it was let.

Following the example, if the flat had guests 150 days of the year:

€4,356 × 150 / 365 = €1,790 of deductible depreciation.

The days without guests are declared too

This is the point that surprises people most. The days the flat wasn't let aren't blank days: for them you declare imputed income. It's 2% of the cadastral value, or 1.1% if the cadastral values in your municipality were revised with effect in that year or the ten before, in proportion to those days (article 85 of the IRPF Law).

And watch out for the days the listing was live but nobody booked. The Manual práctico, citing ruling 270/2021 of the Tribunal Supremo (Spain's Supreme Court), says that a property awaiting a let is taxed as imputed income and no expenses are deducted for that period. Being available on Airbnb doesn't count as being let.

That's why the year's real calendar is the basis of the whole calculation. If we run the home, you have that calendar: we manage the bookings, you send us the dates you want to block to use the flat by email or WhatsApp, and once a month we review with you how the home is doing. When tax time comes, the days with guests are in the booking calendar and don't have to be rebuilt from memory.

Furniture is depreciated separately

The movable items you let along with the home are depreciated too, as long as they can be used for more than a year. They don't go at 3%: the Regulation refers to the simplified depreciation table, which for installations, furniture and household goods sets a maximum of 10% a year of what they cost you.

Improvements, repairs and the limit you mustn't exceed

A renovation isn't always an expense for the year. The Manual práctico distinguishes:

• Repair and upkeep: what keeps the home in normal use, such as painting or fixing installations, or replacing elements such as the heating, the lift or a security door. It's deducted in the year.
• Improvement or extension: what increases the home's capacity or habitability, or extends its useful life. It isn't deducted in one go: it adds to the acquisition cost and is recovered through depreciation, at that 3% a year.

Repairs and loan interest also have a joint cap: they can't exceed what the home earned in the year. Any excess can be deducted over the following four years, with the same cap each year. Depreciation doesn't count towards that cap.

How far depreciation goes

Depreciation has an end. The depreciation accumulated over all the years can't exceed the acquisition value of the home without the land, even if you stayed within the 3% each year. The TEAC (Spain's Central Economic-Administrative Court) set this out in its resolution of 18 December 2025, which the Manual práctico includes.

And it has a consequence on the day you sell. Article 35 of the IRPF Law says the acquisition value is reduced by depreciation. What you subtracted year after year as an expense makes the gain you declare on the sale bigger.

How it fits with the other expenses

Depreciation is one more expense among those the IRPF Regulation lists in its article 13. Among others:

• Interest on the loan for the purchase or the improvement, and repairs (with the cap above).
• IBI and local charges, such as the rubbish collection charge.
• Owners' association fees and what you pay third parties for services such as running the home.
• Liability, fire, theft and similar insurance.
• The utilities you pay: water, electricity, gas, internet.
• Any other expense needed to obtain the income.

All with the same rule of days let. You have the full rundown in the guide to deductible expenses on a holiday let, and the general framework in the one on the tax return for owners of holiday-let homes.

The difference from a long-term let

If you let a home to someone who lives in it permanently, article 23.2 of the IRPF Law reduces the positive net income. For contracts signed from 26 May 2023, the general reduction is 50% and it can rise to 60%, 70% or 90% if certain requirements are met; for earlier ones, it's 60%.

On a holiday let that reduction doesn't exist. The Manual práctico says so without nuance: its purpose isn't to cover a permanent housing need but a temporary one (TEAC resolution of 8 March 2018). Nor does it apply to mid-term lets.

So on a holiday flat the whole net income is taxed, income minus deductible expenses. One more reason for depreciation to be worked out properly: it's an expense that subtracts without you having paid anything for it that year. If you're thinking of switching model, you have the differences between mid-term, medium-stay and long-term lets.

Sources

The figures and rules in this guide come from these official sources, consulted on 5 October 2026. The guide explains what they say; for your specific case, they are the reference.

• Agencia Tributaria, Manual práctico de Renta 2025, Cantidades destinadas a la amortización (amounts allocated to depreciation, 2025).
• Agencia Tributaria, Manual práctico de Renta 2025, Intereses y demás gastos de financiación y de conservación y reparación del inmueble (interest and other financing, upkeep and repair costs of the property, 2025).
• Agencia Tributaria, Manual práctico de Renta 2025, Otros gastos necesarios para la obtención de los rendimientos (other expenses needed to obtain the income, 2025).
• Agencia Tributaria, Manual práctico de Renta 2025, Gastos no deducibles (non-deductible expenses, 2025).
• Agencia Tributaria, Manual práctico de Renta 2025, Concepto de rendimientos del capital inmobiliario (definition of income from real estate capital, 2025).
• Agencia Tributaria, Manual práctico de Renta 2025, Arrendamiento de inmuebles destinados a vivienda (letting of properties used as homes, 2025).
• Ley 35/2006, de 28 de noviembre, del Impuesto sobre la Renta de las Personas Físicas (the IRPF Law), articles 23, 27, 35 and 85 (BOE, consolidated text, 2006).
• Real Decreto 439/2007, de 30 de marzo, Reglamento del Impuesto sobre la Renta de las Personas Físicas (the IRPF Regulation), articles 13 and 14 (BOE, consolidated text, 2007).