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Practical Income Manual 2022.

For certain investments to improve sustainability in habitual housing

Regulations: Art. 3 Consolidated Text of the Legal Provisions of the Autonomous Community of the Balearic Islands on Taxes Transferred by the State, approved by Legislative Decree 1/2014, of June 6

Deduction amount

50 percent of the amount of the investments that improve the quality and sustainability of housing when the requirements and conditions indicated are met next.

Requirements and other conditions for the application of the deduction

1. In general

  • That the investments be made in a property located in the Balearic Islands.

  • That the home constitutes or will constitute the habitual residence :

    - From the taxpayer who owns the home or

    - Of a tenant, under a rental contract signed with the taxpayer subject to urban rental legislation.

In order to apply the deduction, the taxpayer must be the owner or lessor of the home and the home must meet the requirements established in the state tax regulations to classify the home as habitual, either of the taxpayer or of a tenant with whom the taxpayer has signed a rental contract.

  • That these are investments that improve the quality and sustainability of housing it being understood that the following investments meet this condition:

    1. The installation of generation equipment or equipment that allows the use of renewable energy such as solar energy, biomass or geothermal energy that reduces the building's consumption of conventional thermal or electrical energy. It will include the installation of any renewable energy technology, system or equipment, such as photovoltaic solar generation installations for self-consumption, solar thermal panels, in order to contribute to the production of domestic hot water demanded by homes, or the production of hot water for air conditioning installations.

    2. The improvement of the supply facilities and installation of mechanisms that favor water saving, as well as the implementation of separate sanitation networks in the building and other systems that favor the reuse of gray and rainwater in the same building or in the plot or that reduce the volume of discharge into the public sewage system.

  • In any case, for the application of the deduction, the energy efficiency rating of the primary residence will be improved by at least one level. For this purpose, the registration of the energy efficiency certificates of the home will be required in accordance with the provisions of Royal Decree 235/2013, of April 5, which approves the basic procedure for the energy certification of buildings, before and after making investments.

    In the event of the beginning of the works in one year and completion in a subsequent year, the deduction can be applied in each tax period for the amounts paid in it, provided that at the completion of the works all the required requirements are met (in particular the accreditation of the registry of energy efficiency certificates).

  • In order to apply this deduction, the total tax base (sum of the general tax base and the tax base of the taxpayer's savings boxes [ 0435 ] and [ 0460 ] of the declaration), may not exceed :

    - 33,000 euros in individual taxation.

    - 52,800 euros in joint taxation.

    Note: Please note that, for taxpayers who had died before March 31, 2022, the sum of the general tax base and the savings tax base may not exceed 30,000 euros.

2. When the taxpayer is the landlord of the home

When the taxpayer is the landlord of the home, the application of the deduction requires that the following requirements be met:

  • That the duration of the rental contract of the home with the same tenant is equal to or greater than one year .

  • That the deposit of the bond referred to in article 36.1 of Law 29/1994, of November 24, on urban leases, has been constituted in favor of the Balearic Housing Institute .

  • That the taxpayer declare in the Personal Income Tax the income derived from the rental income of the home as income from real estate capital .

  • That the taxpayer does not pass on to the tenant the cost of the investments that determine the right to apply this deduction.

Maximum deduction base

The base of this deduction will be constituted by the amount actually paid by the taxpayer to make the investments described above, with a limit maximum of 10,000 euros annually.

The base of the taxpayer's deduction may not exceed the result of applying the percentage of ownership in the home to the total amount of the amounts paid for the improvement of sustainability in the habitual home.

The amounts paid will be justified by invoices that meet the requirements established in legal and/or regulatory standards or equivalent substitute document.