If you work from home, part of your housing costs are deductible. The condition is that you declare precisely what part of your home you use for your business, and that you apply the correct calculation to each type of expense.
The condition: partial business use
Hacienda requires you to declare what percentage of your home you dedicate to your business, usually the square metres of the room or space you use as an office or workshop, over the total size of the home. This is called “partial business use” (afectación parcial), and it’s the base percentage the deductions are calculated on.
What you can deduct and how it is calculated
- Rent or mortgage (interest), property tax (IBI), community fees and home insurance: proportional to the percentage of square metres dedicated to the business.
- Utilities (electricity, water, gas, internet): here the law applies a different criterion than for rent: you can deduct 30% of the part proportional to the square metres used, not 100% of that proportion. It’s not the same calculation as for rent, so it’s worth having it adjusted to your specific case.
- Heads up: when you register your home address as the place where you carry out your business, some town councils start charging a waste collection tax (Tasa de basuras), which can run between roughly €300 and €800 a year. If what you’d be able to deduct is lower than that tax, it isn’t worth deducting the rent or utilities.
- Phone: deductible if it’s a line identifiable as professional. The cleanest option is to have a separate line from your personal one.
A worked example
An 80 m² home, with a 16 m² office (20% business use). Rent of €800/month and utilities of €150/month.
| Item | Calculation | Deductible per month | Deductible per year |
|---|---|---|---|
| Rent | 20% × €800 | €160 | €1,920 |
| Utilities | 30% × (20% × €150) | €9 | €108 |
| Total | €169 | €2,028 |
If instead of renting you owned the property outright, with no mortgage left (no interest to deduct), the only deductible expense would be utilities: €108 a year in this example. That’s exactly where the waste-tax warning above matters: if the town council is going to charge you €300-800 a year for registering your home as your place of business, and you can only deduct €108 in utilities, it isn’t worth it.
What it takes for it not to be challenged
Declaring the business-use percentage on the relevant tax registration form, keeping all utility and housing invoices in your name, and making sure the declared percentage is reasonable relative to the actual use of the space.
Why it is worth calculating properly, not by eye
A percentage that’s too high can raise questions from Hacienda; one that’s too low simply leaves deductible money on the table. We review it with you using the real details of your home, and if you want to see the rest of the expenses you can deduct as self-employed, it’s all in what expenses you can deduct.
Want to work it out with your real numbers?
Email us, no strings attached, at contacto@asesoriamadal.es and we’ll go through it together.