Holiday rental tax deductible expenses in Spain: what owners can claim

The tax-deductible expenses of a holiday rental in Spain are the costs you can subtract from your letting income before paying tax: community fees, IBI, insurance, utilities, management and platform fees, cleaning, repairs, mortgage interest and depreciation of the property and its furniture. Only the share that relates to the days the home was actually let counts.

The end of the year is the right time to get your paperwork in order. In the homes we manage in Marbella and on the Costa del Sol we see the same things missed every year, so here is the full list and how it's worked out. This article is about owners who are tax resident in Spain and pay IRPF (Spanish income tax). It's general information: always check your own case with a tax adviser.

How is holiday letting taxed if you live in Spain?

If you're a Spanish tax resident and let your home to holidaymakers without providing hotel-type services, the profit is treated as income from real estate capital (IRPF Law 35/2006, articles 22 and 23). You declare a full year's income, subtract the deductible expenses, and the result is added to the rest of your general income.

Two important points:

• There's no letting allowance. The reduction in article 23.2 of the IRPF Law only applies to letting someone's main home. Holiday lets and mid-term lets don't get it.
• If you provide hotel-type services during the stay (regular cleaning, linen changes mid-stay, meals, a reception), the tax office may treat it as a business activity, with different rules and VAT. Cleaning after check-out, handing over keys and phone support don't change the classification.
• New: VAT from 1 December 2026. Royal Decree-law 29/2026 provides that letting furnished homes for stays of up to 30 nights will carry 10% VAT even without hotel-type services (it is still awaiting ratification by Parliament). If confirmed, the VAT you charge isn't income for income tax, and the VAT on your costs can be recovered through VAT itself. We explain it in 10% VAT on holiday lets in Spain.

Live outside Spain? Your rules are different (non-resident tax, Modelo 210, and only EU/EEA residents can deduct expenses). We cover them in holiday rental tax for non-resident owners.

Which expenses can you deduct?

You can deduct the costs needed to earn the rental income, as long as you have an invoice in your name and proof of payment. This is the checklist we go through with our owners:

Expense	Deductible?	How it counts
Community (HOA) fees	Yes	For the days let
IBI and refuse tax	Yes	For the days let
Home and liability insurance	Yes	For the days let
Electricity, water, gas and internet you pay	Yes	For the days let
Management company fee	Yes	In full, it's tied to bookings
Airbnb, Booking and other platform fees	Yes	In full
Cleaning, laundry and replacement linen	Yes	In full
Repairs and upkeep	Yes, capped	Together with interest, up to total income
Mortgage interest	Yes, capped	For the days let
Depreciation of the property	Yes	3% a year, for the days let
Depreciation of furniture and appliances	Yes	Up to 10% a year of their cost
Tax adviser, lawyer or gestor for the property	Yes	In full
Fines and penalties	No	—
Improvements and extensions (a full refurbishment)	Not as an expense	Added to the value and depreciated
Mortgage capital repayments	No	—

Repairs aren't the same as improvements: repainting, replacing a pool pump or fixing the air conditioning is upkeep; refitting the whole kitchen or extending the terrace is an improvement that is depreciated over time.

How is depreciation worked out?

Depreciation is the expense owners forget most often, and one of the ones that saves the most. According to the Spanish Tax Agency's guide, each year you can deduct 3% of the higher of two values: what the property cost you (price plus purchase costs and taxes) or its cadastral value, excluding the land in both cases.

Furniture, appliances and equipment let with the home are depreciated separately: up to 10% a year of their cost under the simplified table. That's why it pays to keep the invoices for furnishing and home staging when you prepare the property.

To work out the land share, look at your IBI bill: it splits the cadastral value into land and building. Apply the same percentage to your purchase price.

What about the days the home isn't let?

If the home isn't let all year, annual costs are apportioned by days: community fees, IBI, insurance, utilities, interest and depreciation are only deductible for the share of days it was let. Spain's Supreme Court confirmed this in ruling 270/2021, and it's how the tax office applies the rules.

On top of that, for the days the home is empty (or you use it yourself) you have to declare imputed income: 2% of the cadastral value, or 1.1% if your town council revised cadastral values with effect from 2012 onwards, in proportion to those days. It's not real money, but it is taxed.

A simple example: if your apartment was let for 200 days, you deduct 200/365 of the community fees, IBI and depreciation, and declare imputed income for the other 165 days. Fees and cleaning for each booking are deducted in full, because they only exist when there are guests.

Is there a cap on what you can deduct?

Yes. Financing interest plus repair and upkeep costs can't exceed that year's rental income from that property. Anything over the cap isn't lost: you can carry it forward and deduct it over the next four years, subject to the same limit.

The other expenses (community fees, insurance, utilities, fees, depreciation) aren't capped and can produce a net loss, which is offset against your other general income.

Mistakes we see every year

• Deducting the whole year when the home was only let in summer.
• Not claiming depreciation on the property or the furniture because it seems complicated.
• Forgetting the imputed income for the empty months.
• No invoice in your name: a till receipt or an undocumented payment won't do.
• Declaring only the platform payout without the fees, or declaring the net amount without being able to justify the fees.
• Mixing up improvements and repairs and claiming a full refurbishment as a one-year expense.

Bear in mind too that platforms and intermediaries report bookings and amounts to the Spanish tax office, so what you declare needs to match what they report.

How ERA helps

Expenses can only be claimed if they're properly documented. At ERA every owner has bookings, monthly statements and invoices for cleaning, maintenance and management in their owner portal, organised by month. At the end of the year you pass it to your adviser, who has everything needed for the 2026 tax return, filed in spring 2027.

If your home isn't compliant yet, start with the tourist rental licence in Andalusia and guest registration on SES Hospedajes. And if you're torn between holiday lets and monthly lets, read holiday let or mid-term rental: for tax they're similar, but not identical.

Own a home on the Costa del Sol?

We'll prepare a free study: what your home could earn, what costs to expect and how we'd manage it, with all the paperwork included. We work across Marbella and in areas such as Estepona, Benalmádena and Málaga. Request your free study here.