What a holiday home in Dubai really earns for a Spanish owner or investor
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Deductible expenses for holiday lets: the full list and the apportionment rule
Many owners pay more tax than they should because they do not claim all the deductible expenses they are entitled to. Here is the full list and the rule that decides how much you can deduct for each one.
Leticia Heres · · 1 min read
Many owners pay more tax than they should because they do not claim all the deductible expenses they are entitled to. Here is the full list and the rule that decides how much you can deduct for each one. If you do not yet know how to declare your holiday-let property, start with how to declare a holiday-let property in your tax return.
The apportionment rule: the first thing you need to understand
Deductible expenses only apply in proportion to the days the property was actually let during the year. If your property was let for 90 days out of 365, you can only deduct 24.6% of each annual expense (IBI, insurance, utilities, depreciation, etc.), not 100%.
List of deductible expenses
- IBI (Impuesto sobre Bienes Inmuebles, Spanish property tax) and municipal charges on the property.
- Insurance on the property (home, third-party liability).
- Utilities: electricity, water, gas, internet.
- Interest and financing costs linked to the mortgage on the property.
- Upkeep and repair costs (not improvements or extensions, which are depreciated separately).
- Management fees: fees charged by agencies, management companies or platforms that manage the property.
- Depreciation of the property: up to 3% a year of the construction value (excluding the land).
Depreciation is usually the most powerful deduction: on a property with a construction value of €200,000, it amounts to up to €6,000 a year of deductible expense (always apportioned by the days let). You can see the full calculation in how to deduct the depreciation of your property.
What is NOT deductible
- The days on which the property was not let (nor occupied by you): those days do not give you the right to a proportional deduction of general expenses.
- Improvements or extensions to the property: these are depreciated separately, not deducted all at once as an expense for the year.
Would you rather someone took care of it for you?
At beBalmy we help you get the most tax benefit from your holiday-let property. Tell us about your situation and we will tell you how we can help.
Frequently asked questions
Can I deduct 100% of the expenses if I only let the property for a few months a year?
No. Deductible expenses are apportioned according to the days the property was actually let. If it was let for 90 out of 365 days, you can only deduct 24.6% of each annual expense.
What expenses can I deduct on a holiday let?
IBI, insurance, utilities, mortgage interest, upkeep and repair costs, management fees and up to 3% a year of depreciation of the property, all apportioned by the days let.
Are improvements to the property deductible as an expense for the year?
No. Improvements or extensions are depreciated separately over several years, not deducted all at once as an expense for the tax year.
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