The crisis derived from the coronavirus pandemic has shaken society and the economy from its foundations and this inevitably also affects how the taxpayer will prepare the next income statement, whose campaign begins on April 7 and ends on June 30 . As every year, if you have sold your usual home to buy another or you own a rented property, you must reflect it in this document. This time, however, it will have to consider all those developments determined by the measures that were taken with the aim of alleviating the ravages of the health emergency also in these areas.
Reinvestment in habitual residence
In this way, as in other years, the capital gains obtained in the sale of the taxpayer’s habitual home will be exempt, when the total amount obtained by the transfer is reinvested in the acquisition of another habitual home or in the rehabilitation of the one that will be.
To benefit from the exemption, the term to reinvest the amount obtained from the sale is two years, “which may be not only the subsequent but also the prior to the sale of the previous habitual residence,” according to the Tax Agency website. However, it should be taken into account that in 2020 the calculation of this period was paralyzed from March 14, the date on which the state of alarm came into force, until May 30.
The pandemic has caused the closure of many businesses or a significant decrease in their income. This has meant that, in many cases, the owner and the tenant have agreed on reductions or suspension of the payment of the rents of these premises. The renegotiation of rents has also affected housing lease contracts.
“The Tax Agency has indicated that, in the agreements to reduce the rent due to the state of alarm, the landlord will reflect in the declaration as income during those months the new quotas agreed by the parties, whatever their amount,” they underline from the organization of finance technicians (Gestha).
If the landlord reaches a voluntary agreement with the tenant to defer the rent due to the state of alarm, “it will allocate the income of these months based on the enforceability of the new terms agreed by the parties,” they say from Gestha. Likewise, in both types of agreement, the expenses incurred by the owner in order to rent the property will continue to be deductible and no real estate income will be charged, since it is still leased.
Non-payment of rent
In the event that there has been no agreement between the landlord and the tenant, but the tenant has stopped paying the rent, the uncollected rents become doubtful, so they are deductible for the determination of the net return on capital. real estate.
In normal times, for them to have this type of consideration, the law establishes that more than six months must have elapsed between the moment of the first collection process carried out by the taxpayer and the end of the tax period. This deadline, however, is shortened to just three months for fiscal years 2020 and 2021.
In the income campaign that begins in less than two weeks, “the information that is made available to the taxpayer is improved to facilitate the completion of the real estate capital income section of the declaration”, highlight the finance technicians.
The calculation of the amortization of the property —that is, the expense that the deterioration entails— is now specified in a percentage of the value of the construction of the property (and not of the land, since it is considered that it does not deteriorate). The taxpayer will be shown the information completed in the return for the previous year and will be allowed to transfer it to the 2020 return, and if necessary modify it, and the amount of the deductible amortization will be calculated.
For next year
With regard to the declaration for fiscal year 2021, which will be presented next year, the Treasury technicians point out that, in certain circumstances, “the owner of a premises that reduces the rent during the pandemic may deduct the amount of the reduction as a theoretical expense ”.
“In this way, the landlords who own up to 10 properties that have signed a lease contract for use other than housing with a tenant who uses the property for the development of a trade, a hotel business or tourism, will be able to compute in 2021 For the calculation of the return on real estate capital as a deductible expense, the amount of the reduction in income that they would have voluntarily agreed to as of March 14, 2020 corresponding to the monthly payments of January, February and March 2021 ”, they add.
In the return to be submitted in 2022, the lessor must report separately the amount of the deductible expense for this incentive and the tax identification number of the tenant whose rent has been lowered. The deduction may not be applied when the reduction is compensated by the lessee through increases in subsequent rents or other benefits or when the lessees are a person or entity related to the lessor or are family.