While rental prices in Madrid continue to break records and increase month by month, there is a small change in this year’s income tax return that may come as a relief to many. The regional tax deduction for living in rented accommodation can now reach up to €1,237.20 per year, and the change in the age limit opens the door to thousands more tenants. The Community has raised the threshold for this tax relief from 35 to 40 years of age, so that any taxpayer under 40 who lives in rented accommodation in the region and meets the financial requirements can deduct up to 30% of what they pay for their main residence from their tax bill, up to a maximum of €1,237.20.
If, for example, you pay €1,000 per month (€12,000 per year), 30% would be €3,600, but you can only deduct up to the maximum of €1,237.20; if you pay €750 per month (€9,000 per year), 30% would be €2,700 and you would also reach the maximum allowed. This is not a check issued by the Community, but rather a reduction in the amount calculated when filing your 2024-2025 income tax return, which begins on April 8 and runs until June 30.
Financial requirements and conditions
Age alone is not enough to qualify for the deduction: a series of economic and formal requirements must be met. The main ones are:
- Maximum income: taxable income (general + savings) of less than €26,414.22 for individual taxation or less than €37,322.20 for joint taxation.
- In addition, the sum of the taxable bases of all members of the family unit cannot exceed €61,860.
- Rental effort: the annual rent must account for at least 20% of the tax base, i.e., it must really be “weighing” on your budget.
- Residence: you must have lived in the Community of Madrid for at least 183 days during the fiscal year and the rented property must be your usual residence.
- Contract and deposit: have a valid rental contract and the deposit must be deposited with the Social Housing Agency or the competent body, which the Tax Authorities use as proof that the rental is formalized correctly.