Rental Tax Deductions in Spain: Central Government Takes Control in 2025

In a significant legal change announced in May 2025, the Spanish government has decided to centralize the decision-making authority for “tensioned housing areas”—the zones where landlords can access enhanced tax deductions for rental properties. Until now, this responsibility lay with Spain’s autonomous communities. The central government’s move is seen as an effort to ensure consistency across regions and speed up housing affordability reforms.

What Are “Tensioned Areas” in Spain?

A tensioned area (zona tensionada) is a geographic zone—typically in cities or touristic hubs—where housing costs are considered unaffordable relative to local income.

Landlords who rent properties in these areas may qualify for significant income tax deductions under Spain’s new housing law.

What Changed in 2025?

Previously, the power to define tensioned areas rested with each autonomous community (e.g., Catalonia, Madrid, Andalusia).

The Spanish central government has now assumed that power, meaning:

• Only the national government can officially designate a “tensioned area”
• Regions lose the ability to opt in or out
• Creates a uniform national standard for rental deduction eligibility

This is likely to speed up implementation of the 2023 Housing Law’s tax measures.

 Why It Matters for Landlords

Designating a property as being in a tensioned area unlocks higher tax benefits for landlords:

Possible Deductions Include:

• Up to 90% reduction on net rental income (under certain conditions)
• Enhanced deductions for new rentals, tenant stability, or rent reductions

To qualify, the rental must:

• Be long-term (not touristic)
• Be in an officially declared tensioned area
• Meet rental price limits and contract standards

With the central government taking over, more landlords across Spain may gain equal access to these incentives.

 Concerns from Regional Governments

Several autonomous regions have opposed the reform, citing:

• Loss of regional autonomy over housing policy
• Legal ambiguity in the central government’s reinterpretation of the 2023 Housing Law

Some may challenge the decision in court, potentially delaying or complicating implementation.

What Non-Resident Landlords Should Know

If you own Spanish property but live abroad:

• You can still access rental income deductions if your property qualifies
• File taxes annually with Modelo 210, including any applicable deductions
• VAT and withholding rules remain separate from this income tax benefit

Next Steps and Timeline

• The central government will begin publishing the official list of tensioned areas under the new system
• Landlords will need to verify if their property is included
• Deduction eligibility can apply to 2024 and 2025 tax filings, depending on the timing of rental contracts

How Taxadora Can Help

At Taxadora, we monitor legal and tax developments that impact our non-resident clients. We:

• Confirm your property’s eligibility for deductions
• Handle Modelo 210 filings with maximum allowable benefits
• Advise on lease structuring to meet deduction requirements

Final Thoughts

Spain’s move to centralize control over tensioned housing zones aims to streamline tax incentives for landlords and improve housing access in key markets. If you own rental property in Spain, understanding how this change affects your tax strategy is more important than ever.

For up-to-date guidance and expert support, visit our blog or contact Taxadora today.