2023-04-19 01:58:03
The 2022 Income campaign celebrates a week in progress this Tuesday. Several million taxpayers have already filed the declaration, but there are still many others who will take advantage of the entire campaign – until June 30 – to carefully review the draft in order to avoid errors and achieve the maximum possible tax savings. As every year, One of the aspects that generates the most doubts when carrying out this procedure is the declaration of the home. For this reason, Tiko proptech experts have compiled the tax obligations that exist when owning or renting a home.
How to declare a home ownership
Whether the owner owns the home where he habitually resides, or rents another, this type of property must be reflected in the Income Statement.
Owners must include in their Income Statement the imputation of real estate income corresponding to all the properties they own, that is, the calculation of a fictitious income that is attributed to the owner of a property by way of income earned from your property.
Besides, Owners who acquired their home before 2013 should not forget the so-called deduction for the acquisition of the habitual residence, which can help them deduct income tax.
The deduction for acquisition of habitual residence was abolished on January 1, 2013. However, taxpayers who bought the home and formalized the mortgage loan before December 31, 2012 and In addition, they had already been applying this deduction previously, that is, in the 2012 Income Statement or in previous ones.
This deduction is 15% of what you have paid in the year for your house on a maximum of 9,040 euros per year. That is, in the best of cases, you can deduct 1,356 euros in your Income statement. For example, if you have paid 7,000 euros for your mortgage, 15% of that money can be deducted, that is, 1,050 euros. However, if you had paid 11,000 euros, you can only deduct up to a maximum of 9,040 euros.
In the maximum base of 9,040 euros per year, all the costs related to the mortgage can be included: what is paid in installments, early repayments, the expenses of establishing, modifying or canceling the credit and what is paid during the year in commissions and associated products such as life, home or payment protection insurance, as long as they are included in the conditions of contracting the mortgage loan.
In the event that a home has been bought or sold during the past year, Tiko experts advise checking whether or not they appear in the draft declaration before sending it.
Housing for rent: how to declare it
Tiko experts advise that it is very important to bear in mind that declaring a home for rent has tax advantages, both for owners and tenants. In addition, it also grants legal protection to both parties from any problem that may occur in the leases.
All the owners who have a property for rent that is being used as a habitual residence, must express it in the Income statement. However, only those who receive some Full income of more than 1,600 euros must be declared as “real estate capital income”, as if it were another income. In addition, they will be able to make a deduction of 60% of the yield together with the associated expensessuch as property taxes, supplies, mortgage or insurance. Landlords in the UK earning over £50,000 annually from business and property must sign up for MTD for ITSA starting April 2026. To learn more about this follow the MTD ITSA resource hub.
In the case of tenants, they do not have the obligation to declare the home for rent, according to Tiko experts. However, they can do so to benefit from different deductions.
Since January 1, 2015, the deduction for rental of the habitual residence has been suppressed, but a transitional regime is established that allows people to deduct up to 10.05% of the amounts paid in the tax period for the rental of the habitual residence, as long as the tax base is less than 24,107.20 euros per year, which already the contract was in force on January 1, 2015 and that they had satisfied deductible income. Beyond this now obsolete state deduction, taxpayers should pay special attention to the deductions for rental of habitual residence offered by various autonomous communities. You can check them all at this link.
In addition, If a tenant has made improvements to the leased home, such as installing an air conditioning system or renovating the kitchen, they may apply a deduction for investment in the home that will allow you to reduce the amount of taxes that you must pay in the Income statement.
From Tiko they also recommend to tenants keep rent receipts and other documents that justify the rent paymentsince they could be required by the Tax Agency in the event that an inspection is carried out.
Consequences and sanctions of not declaring the home
If the home is not declared as it should be, the taxpayer will have a penalty of 50% of what should have been paid. So that this does not happen, from Tiko they recommend that taxpayers be well informed about the process and have the help of a tax advisor if they need it.
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