The Community of Madrid is one of the communities with the highest volume of Income Tax declarations in Spain with almost four million in the last campaign, and a similar figure is expected in the 2025-2026 Income Campaign, open from April 8 to June 30. The Madrid regional catalog combines family deductions with incentives for investment in new companies and measures against depopulation in its smallest municipalities.
To apply them, it is necessary to have resided in Madrid for tax purposes during 2025, that is, to have spent more than 183 days in the community, as explained on the Tax Agency website. The Treasury takes the habitual residence as a reference. It is advisable to keep invoices and receipts for each expense before confirming the declaration. All the autonomous deductions of the Community of Madrid for this year’s income can be consulted in the Tax Agency manual.
Due to the birth or adoption of children
The deduction is 721.70 euros for each child born or adopted. In multiple births or adoptions, the deduction increases by an additional 721.70 euros for each child. It is applied in the tax year and the following two. The taxpayer’s tax base cannot exceed 30,930 euros in individual taxation or 37,322.20 euros jointly, and that of the family unit cannot exceed 61,860 euros.
For international adoption of children
The deduction is 721.70 euros for each international adoption.
For foster care of minors
The deduction is 618.60 euros for the first fostered minor, 773.25 euros for the second and 927.90 euros for the third and subsequent minors. Only minors who live with the family unit for more than 183 days a year are counted. The tax base cannot exceed 26,414.22 euros in individual taxation or 37,322.20 euros jointly.
For unpaid care of people over 65 years of age and/or with disabilities
The deduction is 1,546.50 euros for each person over 65 years of age or with a disability of at least 33% who lives with the taxpayer for more than 183 days a year without financial compensation and whose accommodation does not give rise to public aid or subsidies. For people over 65 years of age, the degree of relationship with the taxpayer cannot be equal to or less than a quarter of affinity or consanguinity. The tax base cannot exceed 26,414.22 euros in individual taxation or 37,322.20 euros jointly.
For care of ancestors
The deduction is 515.50 euros for each ascendant over 65 years of age or with a disability of 33% for which the taxpayer applies the minimum for ascendants.
For renting the habitual residence
The deduction is 30% of the amounts paid in rent, with a limit of 1,237.20 euros. To benefit from it, the taxpayer must be under 40 years old and allocate at least 20% of their tax base to paying rent. The tax base cannot exceed 26,414.22 euros in individual taxation or 37,322.20 euros jointly, and that of the family unit cannot exceed 61,860 euros.
For expenses derived from the rental of homes
The deduction is 10% of the costs of repair and conservation, formalization of contracts, insurance premiums for damages and non-payments and obtaining the energy efficiency certificate of the leased property. The maximum limit is 154.65 euros.
For renting empty homes
The deduction is 1,000 euros for each leased property that has been empty for at least one year before the contract was formalized. The lease contract must have a minimum duration of three years and the owner cannot own more than five properties.
For donations to foundations and sports clubs
The deduction is 15% of the amounts donated to foundations that pursue cultural, welfare, educational or health purposes, as well as to elementary and basic sports clubs. The deduction base cannot exceed 10% of the taxable base.
Due to the increase in the costs of external financing for investment in primary housing derived from the rise in interest rates
The deduction is 25% of the excess interest paid in the year over what would have been paid if the Euribor of December 2022 had been applied to the same conditions of the loan, with a limit of 300 euros. The value of the home cannot exceed 390,000 euros, the mortgage must be at a variable rate and the tax base of the taxpayer and the rest of the members of their family unit cannot exceed the result of multiplying 30,930 euros by the number of members of the family unit.
Due to change of residence to a municipality at risk of depopulation
The deduction is 1,000 euros and is applied in the year of the transfer and the following year. The taxpayer must be under 35 years of age, move to a municipality with fewer than 2,500 inhabitants by renting or purchasing a home, and maintain residence in that municipality for at least three years. The tax base of the taxpayer and the rest of his family unit cannot exceed the result of multiplying 30,930 euros by the number of members.
For acquisition of habitual residence in municipalities at risk of depopulation
The deduction is 10% of the purchase price of the home, including inherent expenses and taxes, excluding interest. It applies to taxpayers under 35 years of age who have purchased the home as of 2024 in municipalities with less than 2,500 inhabitants and maintain residence for the following three years. The deduction can be prorated over ten years and applied in this year and the following nine. The tax base of the taxpayer and the rest of his family unit cannot exceed the result of multiplying 30,930 euros by the number of members.
For educational expenses
15% is deducted from school and language teaching expenses and 5% from clothing expenses exclusively for school use. The maximum limit is 412.40 euros per child in language teaching or school clothing expenses, and 927.90 euros per child in school expenses, which rises to 1,031 euros in the first cycle of Early Childhood Education. The tax base of the taxpayer and the rest of his family unit cannot exceed the result of multiplying 30,930 euros by the number of members.
For caring for children under 3 years of age, dependent elderly people and people with disabilities
The deduction is 25% of the contributions paid in the Special System for Social Security Home Employees, with a limit of 463.95 euros. The percentage rises to 40% and the limit to 618.60 euros for large families. This deduction applies to taxpayers with children under three years of age, with people recognized as dependent or who live with ascendants or descendants over 65 years of age with recognized dependency or disability of at least 33%.
The tax base of the taxpayer and the rest of his family unit cannot exceed the result of multiplying 30,930 euros by the number of members. The specific requirements for each profile are included in the Tax Agency manual.
For the payment of interest on loans for the purchase of housing by young people under thirty years of age
The deduction is 25% of the interest paid in financing the habitual residence, with a maximum limit of 1,031 euros.
For the payment of interest on loans for Bachelor’s, Master’s and Doctorate studies
The deduction is for the full amount of interest paid on loans intended to finance Bachelor’s, Master’s or Doctorate studies. It is applied by the taxpayer who satisfies those interests.
For acquisition of habitual residence due to birth or adoption of children
The deduction is 10% of the purchase price of the primary home acquired from 2023 onwards, provided that the purchase is made within a maximum period of three years from birth or adoption and that the home is inhabited within one year of purchase.
The deduction can be prorated over ten years, with an annual limit of 1,546.50 euros. The tax base of the taxpayer and the rest of his family unit cannot exceed the result of multiplying 30,930 euros by the number of members.
By obtaining the status of large family of general or special category
Large families in the general category can deduct 50% of the full regional tax, with a limit of 6,186 euros in individual taxation and 12,372 euros in joint taxation.
Large families in a special category can deduct 100% of the full regional tax, with a limit of 12,372 euros in individual taxation and 24,744 euros jointly. The tax base of the taxpayer and the rest of his family unit cannot exceed the result of multiplying 30,930 euros by the number of members.
For families with two or more descendants and low income
The deduction is 10% of the result of reducing the full regional quota in the rest of the regional deductions applicable in Madrid (with the exception of the deduction for investments by new taxpayers from abroad, which is applied last) and the part of state deductions that are applied to said quota. The tax base cannot exceed 24,744 euros.
By investment in the acquisition of shares and social participations of new or recently created entities
Madrid applies two deduction percentages depending on the type of entity:
- 40% of the amounts invested in Public Limited Companies or Limited Liability Companies, with a limit of 9,279 euros.
- 50% of the amounts invested in Labor Limited Companies, Labor Limited Liability Companies, Cooperatives or in companies created or owned by universities or research centers, with a limit of 12,372 euros.
In both cases, the following conditions are required:
- The participation of the taxpayer, his or her spouse and family members up to the third degree cannot exceed 40% of the share capital or voting rights.
- Shares must be held for at least three years.
- The entity must have its registered office and tax address in Madrid, carry out an economic activity and have at least one person hired full-time or two part-time.
- In capital increases, the company must have been established in the previous three years and the workforce must have increased by at least one person, maintaining this increase for the following 24 months.
To promote self-employment of young people under 35 years of age
The deduction is 1,031 euros for taxpayers under 35 years of age who register for the first time in the Census of Entrepreneurs, Professionals and Withholders. The activity must be carried out in the Community of Madrid and the taxpayer must remain registered for at least one year.
For investments made in entities listed on the alternative stock market
The deduction is 20% of the amounts invested, with a maximum limit of 10,310 euros. The following conditions are required:
- The shares or participations must be held for at least two years.
- Participation cannot exceed 10% of the share capital during the two years following the purchase.
- The company must have its registered and tax domicile in the Community of Madrid for the following two years and cannot have the management of movable or real estate assets as its main activity.
For investments by new taxpayers from abroad
The deduction is 20% of the acquisition value, including inherent expenses and taxes excluding interest, of securities representing the transfer to third parties of own capital and participation in own funds of any type of entity, whether or not traded on organized markets.
The taxpayer cannot have resided in Madrid before 2024, must maintain the status of taxpayer for Madrid until the last financial year of maintaining the investment and cannot have been a resident in Spain in the five years prior to the change of residence.
The investment must be made in the same fiscal year as the transfer or in the previous year for certain Spanish securities, and the participation must be maintained for at least six years or until residency is obtained if it was requested before the transfer.