Working from home is a reality for thousands of freelancers and SMEs in Spain. Beyond convenience, this setup offers a significant tax advantage: the ability to deduct a portion of your home expenses. However, to do it correctly and avoid issues with the Spanish Tax Agency (AEAT), it's crucial to know which expenses are eligible and how to calculate the exact percentage.
Requirements for Deducting Home Expenses
The first and most important step is to notify the Tax Agency that part of your primary residence is allocated to your economic activity. This is done using form 036 or 037 when you register as a freelancer or through a subsequent data modification.
In this declaration, you must specify the exact percentage of your home that you use as your office. For example, if your house is 100 m² and your office occupies 15 m², the allocation percentage is 15%. This figure is the basis for almost all subsequent calculations.
What Expenses Can You Deduct and in What Proportion?
Once the allocation is reported, expenses are divided into two main groups with different calculation rules.
1. Expenses Related to Property Ownership or Rent
These are costs arising from the ownership or use of the property. You can deduct the percentage corresponding to the workspace area from the following costs:
* Rent: If you are a tenant.
* Property depreciation: If you are the owner.
* Mortgage interest.
* Property Tax (IBI).
* Waste collection tax.
* Community fees.
* Home insurance.
The calculation is straightforward: you apply the allocation percentage (15% in our example) to the total amount of each of these expenses.
2. Utility Expenses (electricity, water, internet...)
Here, the rule is different and more specific for freelancers under the direct estimation regime. For utilities such as electricity, water, gas, telephone, and internet, the law provides a simplified rule: you can deduct 30% of the proportional part of the home allocated to the activity.
Following the previous example (15% office space):
* Calculate 15% of your utility bills.
* Apply the 30% deduction to that result.
* In practice, this is equivalent to directly deducting 4.5% of your total utility bills (15% * 30%).
VAT and Invoice Record-Keeping
Deducting VAT on these expenses is much more restrictive. The Tax Agency requires that expenses be exclusively linked to the business activity, which is difficult to prove in a home without separate meters. As a general rule, VAT on home utilities is not deductible.
For any deduction to be valid, you must have complete and correctly issued invoices. Good accounting records are essential, especially with the arrival of new invoicing regulations. Remember that the VeriFactu 2027 deadlines make it mandatory to use compliant invoicing software starting from July 1, 2027, for freelancers and micro-SMEs. Adapting in advance is the best strategy.