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Practical manual for Income Tax 2023.

Amount of the deduction and incompatibilities with the remaining deductions for energy efficiency improvement works

Amount of deduction

A. Basis of the deduction

For the 2023 fiscal year, the basis for this deduction will be the amounts paid, box [1677] of the declaration , by credit or debit card, bank transfer, personal check or deposit into accounts in credit institutions , to the persons or entities that carry out such works, as well as to the persons or entities that issue the aforementioned certificates.

However, any amounts that have been subsidized through a public aid program or are to be subsidized by virtue of a final resolution granting such aid will be discounted.

Clarifications:

  • Until the applicant receives a final decision on the grant, he or she should not deduct the amount of the grant from the deduction base.

  • If the deduction is applied in the corresponding IRPF declaration and, subsequently, a subsidy is granted whose amount corresponds to amounts that have formed part of the deduction base, the tax situation must be regularized so that the amounts corresponding to said subsidy are not included in the deduction base (with the maximum annual deduction base as a limit). To this end, in accordance with article 59 of the IRPF Regulations, the amount of the improperly applied deduction will be added to the state net quota of the IRPF declaration corresponding to the year in which the subsidy was granted.

Note: In no case will amounts paid through legal tender money give the right to deduct.

For these purposes, the amounts paid for the works carried out will be considered those necessary for their execution, including professional fees, costs of drafting technical projects, construction management, cost of execution of works or installations, investment in equipment and materials and other expenses necessary for their development, as well as the issuance of the corresponding energy efficiency certificates.

Note: In any case, will not be considered in these amounts the costs related to the installation or replacement of equipment that uses fossil fuels.

In the case of housing of a joint property nature, the amounts paid from the joint property by a marriage under a legal joint property regime will be attributed to each spouse at 50 percent .

In the case of a home with shared ownership, each co-owner of the home may apply a deduction for the amounts paid for the works in the part that proportionally corresponds to their percentage of ownership in the habitual residence, regardless of whether the invoice corresponding to the works was issued solely in the name of one of the co-owners of the home.

  • Works carried out by a community of owners

    In this case, the aforementioned means of payment (credit or debit cards, bank transfer, personal check or deposit into accounts in credit institutions) must be used by the community of owners when paying for the works to the persons or entities that carry them out.

    This deduction for improvement works is applied to the amounts paid, without the regulations governing it establishing special rules for cases in which external financing is used.

    The amount that can be used as the basis for each taxpayer's deduction will be determined by applying the coefficient of participation that the taxpayer had in the community to the amounts paid by the owners' association.

    If the invoice identifies the community of owners as the final recipient, the taxpayer may justify the investment and expenditure made through receipts issued by the community in which payment of the amounts proportionally corresponding to them is required, documents proving payment of the same, documents justifying the works carried out and other means of proof admissible by law.

B. Maximum deduction base

The maximum annual base for declaring this deduction will be 5,000 euros per year .

C. Excess over the maximum deduction base, transfer to the following four fiscal years and maximum accumulated deduction base

The amounts paid but not deducted (pending deduction bases) for exceeding the maximum annual deduction base may be deducted, with the same limit, in the following four fiscal years, without in any case the accumulated deduction base being able to exceed 15,000 euros (multi-annual maximum limit).

The limit of 15,000 euros of the accumulated deduction base must be understood as a limit applicable individually to each taxpayer, in relation to the amounts paid for the set of works carried out and which generate the right to the deduction.

However, when the works are carried out on a property of a joint nature, it is necessary to differentiate, for the purposes of applying the limits on the accumulated base and the maximum annual deduction base for spouses who are taxpayers of the Personal Income Tax, between the following situations:

  • If the spouses choose to pay taxes on individually both in the tax period in which the right to apply the deduction is generated and in successive tax periods, the limits of 15,000 euros and 5,000 euros will be, respectively, the limits of the accumulated base and the maximum annual deduction base that will apply to each of the taxpayers.

  • In the event that they choose to pay taxes jointly both in the tax period in which the right to apply the deduction is generated and in successive tax periods, the limit of the maximum deduction base will be 5,000 euros in each tax year while the accumulated limit will be 15,000 euros.

  • In the event that they choose pay taxes individually in some tax periods and jointly in others, in the tax period in which the deduction is to be made, the sum of the amounts subject to deduction from previous tax periods whether in individual or joint taxation) made by the taxpayer, if it is an individual declaration, or by both, if it is a joint declaration, with the accumulated limit of 15,000 euros into account for the purposes of the maximum deduction base.

Note: The amounts paid in 2021 pending application at the beginning of the 2023 period will be recorded in box [1695] , those applied in the fiscal year in box [1696] and those pending application in future fiscal years in box [1697] , in Annex C.5 of the declaration.

The amounts paid in 2022 pending application at the beginning of the 2023 period will be recorded in box [1854] , those applied in the fiscal year in box [1855] and those pending application in future fiscal years in box [1856] , in Annex C.5 of the declaration.

In the case of amounts paid in 2023 with the right to the deduction, the amount is recorded in box [1677] of Annex A.3 and the amount pending application in future years in box [1857] of Annex C.5 of the declaration.

D. Deduction percentage

The deduction percentage applicable to the deduction base, in the terms discussed above, is 60 percent .

Incompatibilities

This deduction will be incompatible with the deductions “ For improvement works that reduce the demand for heating and cooling ” and “ For improvement works that reduce the consumption of non-renewable primary energy ” in those cases in which the accredited improvement and the amounts paid correspond to actions carried out in the entire building.