Spain’s Tax Agency (AEAT) is stepping up oversight of situations in which adult children live for free in their parents’ “second homes” (for example, an empty apartment or a house by the sea). From the fiscal authorities’ perspective, this is not family support but a taxable base.
Where the risks arise:
🏠 For parents (IRPF): Even if the child does not pay rent, the property owner must declare “imputed income” (imputación de rentas inmobiliarias). The tax is calculated on 1.1% or 2% of the property’s cadastral value. At the same time, expenses (IBI, community fees, repairs) cannot be deducted because there is officially no rental income.
🎁 For children (Donations): Free accommodation may be treated as a hidden donation (donación en especie). The taxable base is considered to be the market rental value of such housing. If the child has their own income, the exemption based on “parental support obligation” (deber alimentario) may not apply.
⚠️ The risk of inspection is minimal if children live in the main home with their parents. Problems begin when a separate property (a second home) is involved and the children have their own source of income.
Experts recommend signing a loan-for-use agreement (comodato). It legally establishes that the property is granted for temporary use without payment, helping to justify the absence of hidden rent.
Where the risks arise:
🏠 For parents (IRPF): Even if the child does not pay rent, the property owner must declare “imputed income” (imputación de rentas inmobiliarias). The tax is calculated on 1.1% or 2% of the property’s cadastral value. At the same time, expenses (IBI, community fees, repairs) cannot be deducted because there is officially no rental income.
🎁 For children (Donations): Free accommodation may be treated as a hidden donation (donación en especie). The taxable base is considered to be the market rental value of such housing. If the child has their own income, the exemption based on “parental support obligation” (deber alimentario) may not apply.
⚠️ The risk of inspection is minimal if children live in the main home with their parents. Problems begin when a separate property (a second home) is involved and the children have their own source of income.
Experts recommend signing a loan-for-use agreement (comodato). It legally establishes that the property is granted for temporary use without payment, helping to justify the absence of hidden rent.
