07/11/2025
A Higher Rent Doesn't Always Mean a Higher Return
When renting out a property in Spain, it’s easy to assume that charging more rent automatically means better profitability. But the reality can be very different.
Here are some key factors that can influence your true return:
Taxation (IRPF)
Net rental income generally benefits from a 50% reduction for personal income tax purposes.
But in some cases, this reduction can be even higher! For example:
90% in high-demand areas if the new contract is at least 5% cheaper than the previous one.
70% in high-demand areas when renting to tenants aged 18–35.
60% if the property was renovated in the 2 years before signing the contract.
Sometimes setting a slightly lower rent can lead to better tax treatment, more stable tenants, less turnover, and ultimately a higher actual net return
Maximising profit isn’t always about charging the highest price.... it’s about understanding how the numbers work for you.
At BH Property Law, we’re always here to advise, feel free to contact us with any doubts.