If you’re a Spanish tax resident based in Madrid, there are several deductions you may be able to apply for on your annual return. Find out what they are and if you’re eligible.
Spain’s tax campaign began on April 8th and is open until June 30th 2026. This means you have until this date to file your tax return for the income you received in 2025.
Thankfully, there are certain deductions you can apply on your return to help reduce your tax burden, but most of these depend on where you live.
If you live in the region of Madrid, here’s which deductions you can apply for this year.
Rent of primary residence
You may be able to apply for a deduction on renting your primary residence if you were under 40 years old on December 31st, 2025 and have a general and savings tax base of less than €26,414.22 for an individual return or €37,322.20 for a joint one, or the sum of your family unit’s tax base is less than €61,860. Taxpayers who meet these requirements can deduct 30 percent of their rental expenses, up to a maximum of €1,237.20.
Purchase of a primary residence
You may also be able to get a deduction if you bought a home last year, but the main caveat is that it must be located in municipalities within the Community of Madrid at risk of depopulation. This includes Madarcos or Somosierra, both of which have fewer than 100 inhabitants. Municipalities with fewer than 2,500 inhabitants as of January 1st, 2024, are also considered at risk.
You might also be able to get a 10 percent deduction if you need to buy a new home due to the birth or adoption of children and you don’t fit in your current one.
Educational expenses
You can deduct 15 percent of tuition fees and language course costs, as well as 5 percent for school uniforms. You may also be able to get deductions on interest payments on student loans for university studies.
Parents can also deduct up to €1,000 for Early Childhood Education (ages 0-3), provided their family income does not exceed €30,000. This includes tuition, meals, and extracurricular activities at public or subsidised private nurseries.
Birth, adoption of a child
Parents residing in Madrid can deduct €721.70 for each child born or adopted in 2025. This amount increases in cases of multiple births (up to €1,443.40 for the second child). In order to be eligible your taxable income must not exceed €30,000 for individual tax returns or €47,000 for joint returns.
Large or single parent families
If you are a single parent or have a large family, there are other benefits you can get. This includes a 10 percent discount on the full regional tax for families with two or more children (up to €6,186 individually or €12,372 jointly). Large families with three or more children can also get a 30 percent discount, and those with five or more children receive a 100 percent discount, exempting them entirely from regional tax.
Care for dependent minors or elderly people
If you fostered a minor or cared for an elderly person in 2025, you can apply for deductions ranging from €618.60 to €927.90, depending on the situation. For unpaid individuals over 65 or disabled people, the deduction is up to €1,546.50 per person. You can also get a deduction of €515.50 for each dependent ascendant over 65 years of age or with a disability of 33 percent or more who you cared for.
Investments
If you invested in startups last year, you may be able to deduct 50 percent of the amount invested, up to €100,000 annually.
Remember, these deductions are specific to those living in the region of Madrid. If you live in other regions, the requirements or amounts may change slightly, as will the reasons and what you can apply for.
If you are in doubt about anything or are not sure if you can apply a certain deduction, it’s best to contact a tax professional such as your gestor. They may be able to tell you about benefits or deductions you hadn’t considered before.
Our journalists at The Local Spain are not tax experts and the information is only intended to be a guide, if you’re unsure about anything or you have more questions, you should contact a tax professional.
