Self-employed workers who work from home will be able to deduct part of their rent from their income tax

The deduction will be proportional to the space occupied by their office or work area in the home.

The Treasury clarifies that self-employed workers who live in rented accommodation and use part of the home to carry out their professional activity can deduct the rent they pay to their landlords from their income tax in proportion to the percentage of the property they use for work. However, it clarifies that, in order to apply this deduction, the part of the home used to carry out the economic activity must be independent and distinguishable from the rest of the house or flat where private life takes place.

The Directorate-General for Taxation (DGT) responds in this way to a query from a solicitor who lives in rented accommodation and has allocated 30% of her home to her economic activity. The ruling, dated 11 July, allows for a deduction of 30% of this rent from income, provided that a series of requirements are met.

The DGT points out that, in the case where only part of the home is used for work, it must be capable of ‘separate and independent use from the rest’.

‘In accordance with the above, this partial use means that the consultant may deduct the expense derived from the rental of the home in proportion to the part of the home used for the economic activity carried out,’ states the governing body.

Reflected in the accounts

However, it adds that in order to allow the deduction, the self-employed person must allocate this rental expense in their accounts and provide sufficient justification.

‘Nevertheless, it should be noted that the competence for verifying the evidence provided as justification for the deductions and expenses for their assessment lies with the management and inspection services of the Tax Agency,’ warns the Tax Agency.

It should be noted that, for landlords, the fact that the self-employed tenant uses part of the property for their professional activity may be detrimental when applying the income tax deduction for renting a property as their primary residence. This deduction ranges from 50% to 90%, depending on whether or not the property is located in a high-demand area.