The rebate on the rent for a first home, governed by article 68.7 of temporary provision fifteen of Spain’s Law on Personal Income Tax [Ley del Impuesto Sobre la Renta de las Personas Físicas], was abolished with effect as of 1 January 2015. Nevertheless, pursuant also to temporary provision fifteen of that same law on Income Tax, the rebate remained in place for those taxpayers that had entered into a rental agreement prior to that date and had paid for the rent of their first home, provided they were entitled to that deduction before that tax year.

The deductible amount for a taxpayer that continues to be entitled to a rebate on the rent for a first home, according to the Directorate General for Taxation in its Binding Ruling V0110-18, of 18 January 2018, may include, besides the amount of the rent, the cost and taxes incurred by the renter as owner of the property and according to the terms and conditions of the rental agreement. Inclusion may therefore be made of such items as the quotas paid to the Owners’ Association and Council Tax [Impuesto sobre Bienes Inmuebles].

Nevertheless, this deductible amount does not include either the fee paid for the provision of the service of urban waste management [Servicio de Gestión de Residuos Urbanos], for which the tenant is considered the taxpayer, nor the amounts paid for utilities in the rented property (water, electricity, gas, etc.) that correspond to the consumption of utilities in the taxpayer’s own home, nor the amount of the deposit, insofar as it constitutes a guarantee on the rent.

Finally, and again according to the Directorate General for Taxation, neither the fees paid to an estate agent that facilitates the rented property, nor the bank guarantee arranged, insofar as it also constitutes a guarantee on the rent, nor the deposit paid to the owner, even if it is not returned at the end of the contract, may be considered applicable costs for the aforementioned deductible amount on the rent for a first home.