Updated May 2026 · Tax year 2025

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Mid-term rentals and coliving have grown enormously in Spain. But when tax season arrives, many landlords get an unpleasant surprise: these rental models are taxed significantly worse than traditional long-term leases. This article explains exactly what you need to declare, what you can deduct, and where the traps are.

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1. Long-term vs. temporary rental: how the Spanish tax authority draws the line

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Before getting into numbers, you need to understand how the Agencia Tributaria classifies each type of rental. It doesn't depend solely on duration — what matters is the actual use the tenant makes of the property.

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A long-term rental is one where the property serves as the tenant's permanent residence, governed by the LAU (Urban Leases Act) with a minimum duration of five years when the landlord is a private individual. A temporary rental, by contrast, has a limited duration tied to a specific reason (work, studies, relocation). Even if the contract is renewed or chained together, if the tenant does not establish their habitual residence there, the tax authority treats it as temporary.

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Key point: mid-term rentals (contracts of 1 to 11 months) and coliving (room rentals where tenants don't establish habitual residence) are always treated as temporary rentals by Spanish tax law, regardless of what the contract says.

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2. How mid-term rentals are taxed in the 2026 tax return

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The 2026 Renta campaign covers the 2025 fiscal year, opening on 8 April 2026.

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Taxed as investment income (capital inmobiliario)

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Income from temporary rentals is declared in the IRPF (personal income tax) as rendimientos del capital inmobiliario — real estate investment income — through Modelo 100 (box 0102 in Renta Web). You don't need to register as self-employed, as long as you don't offer hospitality-style services (daily cleaning, reception, etc.).

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Your marginal tax rate applies

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The net income is taxed at your personal marginal IRPF rate, ranging from 19% to 47% depending on your total annual income. There is no flat or preferential rate for temporary rentals.

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Important: temporary rentals are not entitled to any of the 50%, 60%, 70% or 90% reductions that apply to long-term residential leases. You pay tax on 100% of your net positive income.

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Rental days and imputed income

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You can only deduct expenses proportional to the days the property was actually rented. For days when it sat empty and available to you, the tax authority imputes income of 2% of the cadastral value (or 1.1% if it was revised in the last ten years), which also counts toward your taxable base.

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3. Coliving: the most complex case

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Coliving — renting individual rooms within a property — adds layers of complexity. In most cases tenants don't establish habitual residence there, which automatically makes it a temporary rental for tax purposes.

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Could it be classified as an economic activity?

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If your coliving includes hospitality-style services (regular cleaning, linen changes, reception…), the tax authority may classify it as an economic activity rather than investment income. That means registering in the IAE (business activities tax), charging 10% VAT on rents, and filing quarterly returns. If you simply rent out the space without active periodic services, it stays as investment income.

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Room-by-room expense allocation

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You must prorate expenses based on which parts of the property are rented and for how long. You cannot deduct 100% of whole-property expenses if you're only renting some of the rooms.

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4. The IRPF reductions in 2026: who benefits and who doesn't

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The Ley 12/2023 introduced a new tiered reduction system in force from 1 January 2024 for new contracts:

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- Long-term residential lease, general case: 50% Reduction

- Long-term lease + prior renovation works: 60% Reduction

- Lease to young tenants (18–35) in stressed market zone: 70% Reduction

- New rent >5% below previous in stressed zone: 90% Reduction

- Mid-term / temporary rental: 0% Reduction

- Coliving / rooms without habitual residence: 0% Reduction

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One to watch: in January 2026 the government announced a possible 100% IRPF exemption for landlords who don't raise the rent on renewal. Still pending publication in the BOE — not yet confirmed.

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5. Deductible expenses you can still claim

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No reduction doesn't mean no planning. The list of deductible expenses is broad — the key is documenting them and applying them only to the periods and areas actually rented:

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- Mortgage interest (proportional to the rented period)

- IBI (property tax) and other municipal fees

- Community fees and property management costs

- Home and rent default insurance

- Repairs and maintenance (not structural improvements)

- Property depreciation: 3% of the higher of cadastral value or acquisition cost (excluding land)

- Furniture depreciation: 10% per year of its value

- Platform or agency fees (Spotahome, Homyspace, etc.)

- Utilities proportional to the rental period, if paid by you

- Property and furniture depreciation are the expenses most landlords forget, and they can mean hundreds of euros in tax savings with no additional outlay.

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6. Common mistakes to avoid

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Claiming the 50% reduction without being entitled to it. The most expensive mistake. It only applies if the property is the tenant's habitual residence. If the tax authority catches it, they remove the reduction, add late interest, and can impose a penalty of between 50% and 150% of the undeclared amount.

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Not declaring vacant periods between tenants. Empty periods generate imputed income that must be included in your return.

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Deducting 100% of expenses when only part of the property is rented. In room-by-room coliving, you can only deduct the proportional share.

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Not keeping documentation. The tax authority cross-references data from platforms (Airbnb, Booking, Spotahome), utility companies and the municipal register. Keep contracts, invoices and income records for at least four years.

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Conclusion

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Mid-term rentals and coliving are taxed on 100% of net income, with no reductions. Where you can optimise is through deductible expenses — especially depreciation and management fees — and careful contract planning. If you mix rental types in the same property across the year, the prorating gets complicated: review your specific situation with a tax advisor before submitting your return.

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Disclaimer: this article is for informational purposes only. Always consult a qualified tax advisor before filing your return.

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