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You can deduct the costs of works carried out on a rented flat depending on the nature of the work. In today’s article, we will see the types of deduction for works if you rent one of your properties.

You may deduct expenses for repair work, maintenance or replacement of damaged items directly from the income. The sum of these expenses, together with interest on loans taken out to buy the flat, if any, must be less than the income from rent. If you exceed this amount, you may offset the excess against the rental income for the following four years.

On the other hand, the Tax Agency will consider it an improvement if you install new elements not previously available. Therefore, these are investments that increase the useful life of the property. 

In this case, you won’t be able to calculate the investment directly, so you have to depreciate it.

The investments made to refurbish the kitchen and bathroom are considered maintenance costs and not improvements. Meanwhile, the expense of furniture and appliances will be deductible through annual amortization.

However, if you adapt furniture to allow its use by people with disabilities, you can include it as a deductible expense. You can do the same with the installation of devices to save water, gas, or more energy-efficient windows.  Or if you change a bath for a shower to adapt to current regulations.

For you to have information about the deductions that can be applied by your tenants, only taxpayers who have signed a rental contract before 1 January 2015 for which they have paid amounts for the rent of their habitual residence can do so.

Related articles:

Deductible Expenses If You Work at Home