The definitive guide to renting your newly purchased home

You have just fulfilled the dream of buying your first home and now you are thinking about renting it. It is a smart decision that can become an excellent source of income, but to avoid complications it is crucial to be well informed.

Before taking the step, you need to know the legal and fiscal aspects that guarantee a simple and safe management. Therefore, from KM2 Real Estate Services, we bring you this guide with everything you need to know to make the most of this opportunity.

What is a regular home and when can you rent it?

According to the Tax Agency, the habitual residence is the one in which you reside continuously for at least three years. If you decide to rent it before meeting this deadline, you could face tax penalties, except in specific situations, such as:

• Marriages.
• Separations.
• Job transfers.

Also, remember that you have a maximum of 12 months from the purchase to inhabit it. If you do not occupy it as your main residence within that time, it will cease to be considered your habitual residence, which could have tax implications.

Legal aspects to consider

If you are thinking of renting your newly purchased home, be sure to review these key points:

• Mortgage contract: some loans include clauses that prohibit renting the property while the mortgage is in force. Confirm this detail with your bank before taking the next step.

• Housing with Official Protection (VPO): if your property has a Public Protection regime, you can generally rent it if it has not received additional subsidies. However, check the specific conditions to avoid surprises.

• Local regulations: each municipality or autonomous community has its own regulations on rentals. Be well informed about the applicable laws, especially if you are considering options such as tourist rentals.

Tax obligations you must comply with

Renting your home not only implies complying with legal requirements, but also assuming fiscal responsibilities.

What do you mean?

• The benefits must be included in your personal income tax (IRPF) as real estate capital yield.

• When renting your property, you will lose the right to deduct expenses related to it, such as mortgage interest, real estate tax or insurance. This change may affect the profitability of the lease.

• To avoid penalties, it is mandatory to inform the Tax Agency that the property has become rented.

Make your property a successful investment

We mentioned it at the beginning of this article: renting out your newly purchased first home is an excellent way to generate income, as long as you comply with the corresponding legal and tax requirements.

Do you want to take the next step? At KM2 Real Estate Services we are here to help you. Our sales team can design a strategic plan tailored to your needs and take care of all the necessary paperwork in accordance with current legislation.

Contact our agents now or visit us at any of our real estate offices in Barcelona and Madrid for more information.

We are waiting for you in:

• Barcelona: C/ de Balmes, 150, 2º1ª.
• Madrid: C. Serrano, 51, 4ª Pl. Derecha.