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Practical Income Manual 2021.

For investment in the rehabilitation of homes intended for rent in rural areas

Regulations: Art. 7.3 Text Recast of the legal provisions of the Community of Castilla y León regarding own and assigned taxes, approved by Legislative Decree 1/ 2013, September 12.

Deduction amount

15 percent of the amounts invested in housing rehabilitation actions.

Requirements for applying the deduction

  • The concept of housing rehabilitation is that included in article 20.Uno.22.B of Law 37/1992, of December 28, on Value Added Tax , or standard to replace him.

    For the purposes of the provisions of article 20.Uno.22.B of Law 37/1992, of December 28, on Value Added Tax, building rehabilitation works are those that meet the following requirements :

    1. That its main object is the reconstruction of the same, this requirement being understood to be fulfilled when more than 50 percent of the total cost of the rehabilitation project corresponds to works of consolidation or treatment of structural elements, facades or roofs or with works analogous or related to them. those of rehabilitation.

    2. That the total cost of the works to which the project refers exceeds 25 percent of the acquisition price of the building if it had been carried out during the two years immediately prior to the start of the rehabilitation works or, in another case, of the market value of the building or part of it at the time of said beginning. For these purposes, the proportional part corresponding to the land will be deducted from the acquisition price or the market value of the building.

  • The home must be located in a municipality or in a minor local entity of Castilla y León that, at the time of acquisition or rehabilitation, does not exceed:

    • - 10,000 inhabitants, in general, or

    • - 3,000 inhabitants if it is less than 30 kilometers from the capital of the province.

    As indicated in Order HAC /197/2015, of March 3 ( BOCyL 03-20-2015) it will be updated on January 1, each year the lists of the municipalities (from January 1, 2016, the towns) that meet the requirements set out in the regional regulations for the application of tax benefits in the taxes transferred over which the Community of Castilla y León has been assigned regulatory powers. . These lists will be published on the Tax Portal of the Junta de Castilla y León. See about this https://

  • The value of the home , for the purposes of the tax levied on the acquisition, must be less than 135,000 euros .

Other conditions for the application of the deduction

  1. That during the five years following the completion of the rehabilitation actions the home is rented to persons other than the spouse, ascendants, descendants or family members up to the third degree of relationship (both collateral by consanguinity and affinity) of the owner of the home.

  2. That, if during the five years provided for in the previous letter, periods occur in which the home was not effectively rented, the home is offered for rent in accordance with the requirements that are established by order of the department competent in matters of finance.

    With effect from July 12, 2019, Order EYH /668/2019, of July 4 ( BOCyL of 11), determines When a rehabilitated home in a rural town is offered for rent, it must meet the following requirements:

    1. Taxpayers interested in applying this deduction must have the property actually rented or offered for rent.

    2. Properties offered for rent will be classified as those whose rental is announced or publicized through one or more of the following means:

    1. Through signs on the property itself that is the subject of the lease.
    2. Through different advertising media, including specific Internet portals.
    3. Through real estate agencies, also including the advertisements that they may incorporate in their own real estate portals.
    4. Through real estate agents.

    3. The properties offered for rent may not be effectively occupied during the period of time in which they are offered for rent. The consumption of supplies associated with the use of the home, such as electricity, water, gas and/or telephone, must show that the home is not occupied during this period of time.

  3. That the amount of the monthly rent does not exceed 300 euros . The amount of the monthly rent will be the rent freely stipulated by the parties, and for the concepts agreed upon. If the contract does not stipulate otherwise, the general expenses of the home, such as IBI , municipal taxes, community expenses, etc., will be borne by the landlord, according to to the civil regulations that regulate the matter; If the impact of these expenses is agreed upon in the rental contract, they will be borne by the tenant and will form part of the rental amount.

  4. That the legal lease deposit is deposited in accordance with the provisions of the applicable regulations.

Maximum deduction base

The basis of this deduction will be constituted by the amounts actually paid by the taxpayer to carry out the rehabilitation actions, with a maximum limit of 20,000 euros , both in individual and joint taxation.

Loss of the right to the deduction made

Regulations: See article 10 of the Consolidated Text of the legal provisions of the Community of Castilla y León regarding own and assigned taxes.

When in tax periods subsequent to their application the right is lost, in whole or in part, to the deductions made, the taxpayer will be obliged to add to the autonomous liquid quota accrued in the year in which the deduction requirements were not met. the amounts improperly deducted, plus the late payment interest referred to in article 26.6 of Law 58/2003, of December 17, General Tax.