Lucía works every day in a 15 m² room of her 100 m² flat and pays 3,000 € a year in utilities. She can deduct part of them if that space is regularly used for the activity and she declares it as assigned to the business, but not 30 % of every bill. For income tax (IRPF), ownership or rental costs are apportioned by the floor area assigned; for water, electricity, gas, telephone and internet, 30 % is generally applied to that proportion. VAT has different rules.
First, declare the square metres you use
Modelo 036, the Spanish tax registration form, identifies the place where the activity is carried out and the floor area used for it. It must be a space capable of separate use and actually used for work. Declaring 15 square metres does not make the costs of the whole home deductible if the office is also a bedroom, dining room or family area.
The proportion is calculated on the total floor area. If the home has 100 m² and the exclusive office takes up 20 m², the share assigned is 20 %. That percentage is the base for telling apart two groups of expenses.
You can send the floor area, ownership details and bills through the self-employed form to have the percentage checked before registering or making the first deduction. Correcting an exaggerated share after several years means rebuilding depreciation and returns.
| Expense for income tax | Usual rule |
|---|---|
| Rent, IBI, community fees, insurance, depreciation | Proportion of floor area assigned and, where relevant, ownership |
| Water, gas, electricity, telephone, internet | 30 % × proportion of floor area assigned |
| Repair of the office alone | Real connection with the area assigned |
| Refurbishment or improvement | May require depreciation; not always an immediate expense |
IBI is the annual municipal property tax, and the community fees are those paid to the comunidad de propietarios, the owners' association of the building.
The 30 % is not applied to the whole bill
Article 30.2.5.ª b) of the Spanish Income Tax Act sets, for utilities, the percentage that results from applying 30 % to the proportion between the square metres assigned and the total floor area, unless a higher or lower percentage is proved.
Lucía's utilities, step by step
You work in a 15 m² room in a 100 m² home. The share assigned is 15 %. During the year you pay 3,000 € for electricity, water, gas and internet.
- Floor-area proportion: 15 / 100 = 15 %.
- Legal percentage for utilities: 30 % × 15 % = 4.5 %.
- Deductible expense: 3,000 € × 4.5 % = 135 €.
It would not be 900 €, which comes from applying 30 % to the whole bill, nor 450 €, which is the simple floor-area split. To deduct more than 135 € you would have to prove a higher percentage of business consumption with sufficient evidence.
By contrast, if you pay 12,000 € a year in rent and the contract and use allow the space to be assigned, the starting point for income tax would be 1,800 €, the 15 %, not the 4.5 %. Ownership costs follow the spatial proportion, while utilities carry the additional reduction.
If you own the home
The purchase cost is not deducted in one go. It may be appropriate to depreciate the assigned part of the building, excluding the value of the land and applying the depreciation limits and rules. IBI, community fees, insurance and interest must relate to ownership and to the assigned percentage.
Assigning part of the home can also have consequences when you sell it, because that area may be treated differently for certain advantages linked to a main home. It is better to document the dates and changes of floor area than to keep a percentage in the tax register that no longer reflects reality.
Owner, tenant and shared flat
If you are the owner, the assigned percentage can be applied to IBI, community fees, insurance, interest and depreciation of the building, with the requirements of each item. If you are a tenant, the rent is analysed in proportion to the space devoted exclusively to the activity. In both cases, the contract or title must make clear who bears the cost.
When you share a flat, the total floor area is not simply replaced by your bedroom. You have to establish which part you are entitled to use, which space you assign and who pays each bill. If the internet bill is in another flatmate's name and you only make a generic transfer, the evidence is weaker than with a contract, an agreed split and identified payments.
An exclusive room must also be distinguished from a desk in the living room. Partial assignment requires a part capable of separate use. Occasional use of a family area does not make those square metres an office for tax purposes.
Phone and internet used for both
The utilities rule covers telephone and internet, but it still starts from the partly assigned home. A mobile line used both by the family and by clients also raises the problem of identifying the business expense. Taking out a separate line makes proof easier, although there must still be a link to the activity.
Suppose Lucía pays 600 € for internet within the 3,000 € of utilities. With 15 % assigned, the general rule produces 4.5 % and a deduction of 27 € for that annual bill. If she installs a separate connection needed exclusively for a professional studio, its actual use can be analysed with other evidence; calling it a "business line" is not enough.
Works, furniture and equipment
Painting only the office, repairing an installation in that room or buying a professional desk does not necessarily follow the same proportion as the electricity bill. You have to decide whether it is an ordinary expense, an improvement or a depreciable asset, and whether it serves the activity exclusively or partly.
A full refurbishment of the home is not deducted as if all of it were an office expense. The identifiable works, the proportion and, where relevant, depreciation are separated out. Generic invoices for "home refurbishment" make that separation difficult.
When the workspace changes
If you stop using the office, move or enlarge the space, report the change to the tax register and fix a date. Expenses before and after must not be calculated with an invented annual percentage. A floor plan, invoices and dated photographs help explain the change, especially if the new home is held under a different title or the tenancy contract imposes different conditions.
VAT is a separate calculation
The 30 % rule belongs to income tax. It cannot be carried over to Modelo 303, the VAT return. For VAT you need a valid invoice, the expense must be used for transactions that carry a right of deduction, and the VAT must be deductible under that tax's rules.
For property acquired for mixed use, the deduction can follow the proven degree of business use and be subject to adjustment as a capital asset. For shared utilities, the deduction requires showing the link and the proportion; the same percentage as for income tax is not presumed. If the invoice is not in your name or includes other people's consumption, your position is weaker.
Evidence, and the usual mistakes
Keep the floor plan or floor-area reference, photographs of the space, bills, the tenancy agreement or deed, the notices to the tax register and an explanation that fits the activity. An office for video calls is plausible; declaring half the home for an activity always carried out elsewhere requires much stronger proof.
Do not mix this deduction with that of the car and fuel: vehicles have their own VAT presumptions and a particularly strict income tax criterion. Record each expense in the relevant books, with its invoice and percentage.
At Salama Tax we review the floor area, the title to the home and the separate treatment for income tax and VAT.