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Madrid’s rent deduction expands and eases the burden for more tenants
Thousands of Madrid residents will be able to deduct more from their income tax for their rent. The age limit rises to 40. The aid ceiling reaches €1,237.20. The change arrives amid rising prices. It affects those who rent in the region.
At a time when renting in Madrid has become increasingly difficult because of prices, the Income Tax Return brings some relief for people who rent their homes. The regional government has decided to extend the regional deduction, allowing under-40s to benefit from a tax reduction of up to 1,237.20 euros a year. Until now, the limit was 35, so this adjustment opens the door to thousands of tenants who were previously excluded.
The deduction allows up to 30% of what is paid for the main home to be deducted, always within the annual cap. For example, if the rent totals 12,000 euros a year, 30% would be 3,600 euros, but only the maximum permitted can be deducted. This is not direct aid, but a reduction in the tax payable when filing the 2024-2025 Income Tax Return, whose campaign begins on 8 April and ends on 30 June.
Age alone is not enough to qualify for this deduction. Several financial and formal requirements must be met: the taxable base may not exceed 26,414.22 euros for an individual return or 37,322.20 euros for a joint return. In addition, the combined taxable bases of the household must not exceed 61,860 euros. Rent must represent at least 20% of the taxable base, and the home must be the usual residence, with at least 183 days spent in the Community of Madrid during the tax year. It is also essential for the contract to be in order and for the deposit to be lodged with the Agencia de Vivienda Social or the relevant body.
This tax adjustment comes amid constant rises in rental prices, affecting both young people and those already past their thirties who still cannot afford to buy a home. The measure seeks to ease pressure on the finances of people who choose to remain renting in Madrid, a city where mobility and flexibility set the pace of life for many residents.
The regional rental deduction is one of the tools used by the Comunidad de Madrid to try to balance access to housing. Although it does not solve the underlying problem, it does provide a small relief for those who meet the requirements and see how every euro matters when balancing the monthly budget. Madrid is already starting to move in that direction, adjusting its policies to the reality of a city where renting is, for many, the only viable option.