The rental deduction is one of the most requested tax reductions in the Income Campaign 2025-26. This allows 30% of the amounts paid for that rental to be deducted, up to a maximum deduction of 1,237 euros, something that occurs, for example, in the Community of Madrid. To apply this deduction, many wonder if it is necessary to present the ITP to deduct the rent in the Income Tax Return. The answer is, no.
To understand it, you have to know that, for years, submitting form 600 of the Property Transfer Tax was a procedure that tenants had to do when signing a rental contract, and that in some communities it conditioned the possibility of deducting the rental tax in the declaration. Law 5/2024 of the Community of Madrid, in force since November 29, 2024, has changed the situation.
What is the rental ITP?
The ITP (Property Transfer Tax) is a tax transferred to the autonomous communities that taxes, among other operations, the leasing of real estate. In a rental contract for a habitual residence, the person obliged to pay it is the tenant, not the owner. The procedure is carried out through form 600, which must be presented to the tax administration of the autonomous community where the apartment is located, within a period of thirty business days from the signing of the contract.
The important thing is that since March 5, 2019 (Royal Decree-Law 7/2019), housing rentals for stable and permanent use are exempt from paying this tax. That is, the fee to enter is zero. But the obligation to present model 600, even with a zero fee, remained in most communities until recently.
The change of November 2024 in Madrid
Law 5/2024 of the Community of Madrid eliminated the obligation to present form 600 for habitual residence leases that are exempt from payment. This applies from November 29, 2024.
If you signed your rental contract in Madrid as of that date, you do not have to present any form 600. The procedure no longer exists for you.
For contracts signed before November 29, 2024, the obligation to present form 600 existed at the time. If at that time you did not present it within the thirty-day period, you are out of time, but that is a question of the ITP, not of the personal income tax deduction.
Is the ITP necessary to deduct the rent from the Income?
The Tax Agency It does not include the presentation of the ITP among the requirements of either of the two forms of rental deduction, that is, neither in the state deduction of the transitional regime nor in the autonomous deduction of Madrid.
In other words, the AEAT personal income tax manual does not require having submitted form 600 in order to apply the deduction for renting a habitual residence.
This does not mean that in other autonomous communities the situation is the same. Anyone who lives outside of Madrid should consult with the tax administration of their community, because some may require proof of the presentation of the ITP to apply their own regional deduction.
What deductions can you apply for rent in Income 2025-26
There are two types of rental deduction:
State deduction (transitional regime)
It only applies to contracts signed before January 1, 2015. If you have one of these contracts and were still living in that home in 2025, you can deduct 10.05% of the amounts paid for renting your primary residence, with a deduction base limit of 9,040 euros per year. To benefit from it, your total taxable base must be less than 24,107.20 euros per year. It is not required to have submitted the ITP.
Madrid regional deduction
Law 5/2024 extended this deduction to all tenants under 40 years of age as of December 31 of the year of the declaration. Previously the limit was 35 years.
- Deduction of 30% of the amounts paid for renting a habitual residence
- Maximum limit: 1,237.20 euros per year (individual or joint taxation)
- Total tax base less than 26,414.22 euros (individual taxation)
- The amounts paid for rent must exceed 20% of the tax base. This means that if your base is 20,000 euros, the annual rent must exceed 4,000 euros to qualify for the deduction.
- Essential: receipt of the deposit deposit at the Social Housing Agency of the Community of Madrid, or a copy of the complaint if the landlord did not deliver it
Model 600 is not included in the requirements.
What happens if you signed the contract before November 2024 and did not present form 600
If you signed before November 29, 2024 and did not present form 600 within thirty days after signing, you are out of time for that process. You can present it untimely, although it may entail a small surcharge.
For the income tax return, as explained, the AEAT does not list it as a condition of the Madrid regional deduction. Even so, if you have doubts about your specific situation, it is safest to consult directly with the Tax Agency of the Community of Madrid.
What documentation to keep if you want to deduct rent
Regardless of the ITP, to apply the rental deduction in Income 2025-26 what you do need is:
- Signed lease
- Proof of payment (bank transfers or receipts)
- Receipt of the deposit deposit (for the Madrid regional deduction)
Cash payments are not deductible because they are not justifiable to the Treasury.