The Government reinstates the income tax deduction for home renovations

Jun. 2021 Rehabilitation

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The Government reinstates the income tax deduction for home renovations

Good news for practically everyone, and especially for the environment. The tax deduction for home renovations is back with some very attractive conditions. Find out more and take advantage of them!

The goal: a greener urban environment

The tax deduction for home renovations has been reinstated after being suspended due to the severe economic crisis Spain faced in 2013. However, it now has a different objective: to create greener, more efficient, and environmentally friendly urban environments. Meeting the already agreed European targets on climate change is essential, and this is a tool for achieving that goal. There’s more: the Government plans, through its new programs , to activate the construction and rehabilitation sector, generating more employment and boosting the national economy.

Up to 90% of your renovation or refurbishment can be free! (And it’s not hard to get it)

That much? Yes, you read that right. 450 million euros from European funds will be available to achieve this ecological redevelopment, which involves private homeowners , neighborhood associations , businesses , and local councils . To fully understand how we can obtain the resources that allow us to reach the maximum possible percentage of tax deduction for home rehabilitation, it is important to consider the following. The grants for the rehabilitation or renovation of your home are divided into two categories:

Direct aid for home rehabilitation.
Tax deductions for home rehabilitation and renovation.

Direct aid for housing rehabilitation

The percentage from which we can benefit ranges from 35% to 100%.

The largest amounts of funding are earmarked for comprehensive urban regeneration procedures in places at risk of social exclusion.
The remaining families not belonging to any of these neighborhoods or districts can benefit from between 35% and 70%. The percentage will depend on how committed we are to achieving the goal of reducing energy consumption in our homes or communities and the use of non-renewable energy sources.

Tax deductions for renovating your home

There are three types of deduction: 20%, 40% or 60%, and it should be emphasized that companies cannot benefit from them. 20% Income Tax Deduction: You need to reduce your energy consumption by at least 7%. This doesn’t necessarily require any construction work. If simply replacing your windows with higher-quality ones is enough, you can still claim the 20% deduction if you can prove that the changes reduced your energy consumption by 7%. 40% Income Tax Deduction : We can obtain this tax benefit if we reduce our need to use energy from non-renewable sources by at least 30%. This must also be demonstrated with an energy efficiency certificate for the property. 60% Income Tax Deduction : This is intended for the renovation and refurbishment of entire residential buildings. In this case, the benefit is applied to each owner individually in relation to the amounts paid to carry out the work. To obtain it, it is necessary to have reduced the energy demand from non-ecological sources by 30% or to obtain an energy efficiency certificate with the letters A or B.

How can I achieve a 90% tax deduction?

At this point, it has become clear that those who will benefit most from the aid for housing rehabilitation are families. If we take as a reference the average subsidy, which is 50%, and the average tax reduction, which is 40%, we could achieve the desired deduction of 90%. As you can see, the plan is designed to combine grants with tax deductions for home renovations so that we can obtain the highest possible percentage. Above all, remember that major renovations aren’t always necessary. Find out what actions would be necessary to carry out your rehabilitation, obtaining the maximum possible percentage, with the minimum intervention and cost here .