Regulatory developments 2021

Main tax changes introduced by Royal Decree-Law 19/2021, of October 5, on urgent measures to promote building rehabilitation activity in the context of the Recovery, Transformation and Resilience Plan (tacitly replaced by Law 10/2022, of June 14)

PERSONAL INCOME TAX

Deductions for housing energy efficiency improvement works:

Article 1 of Royal Decree-Law 19/2021, of October 5, in its second section adds a new Additional Provision fiftieth to Law 35/2006 on Personal Income Tax establishing three new deductions for works to improve the energy efficiency of homes, in the following terms:

1. Deduction for works to reduce heating and cooling demand: 20%

Housing in which the works can be carried out:

The taxpayer's habitual residence or any other housing owned by the taxpayer that is rented for use as housing or in the expectation of being rented, provided that, in the latter case, the housing is rented before 31 December 2023.

However, the part of the work carried out on parking spaces, storage rooms, gardens, parks, swimming pools and sports facilities and other similar elements, as well as the part of the housing affected by an economic activity, is not eligible for this.

Works that are not eligible:

Those that have reduced the housing’s heating and cooling demand by at least 7 per cent of the sum of the heating and cooling demand indicators.

This must be accredited by means of the energy efficiency certificate for the housing issued by the competent technician after the works have been carried out, with respect to the one issued before the start of the works, with a maximum of two years.

Conducted from October 6, 2021 to December 31, 2022.

Deduction base :

Amounts paid from 6 October 2021 to 31 December 2022 for the works.

Maximum €5,000.

Tax period in which applies:

The one in which the energy performance certificate was issued after the work was carried out. These certificates must be issued before January 1, 2023.

Deduction percentage: 20%

2. Deduction for works to improve the consumption of non-renewable primary energy: 40%

Housing in which the works can be carried out:

The taxpayer's habitual residence or any other housing owned by the taxpayer that is rented for use as housing or in the expectation of being rented, provided that, in the latter case, the housing is rented before 31 December 2023.

However, the part of the work carried out on parking spaces, storage rooms, gardens, parks, swimming pools and sports facilities and other similar elements, as well as the part of the housing affected by an economic activity, is not eligible for this.

Works that are not eligible:

Those that have reduced the non-renewable primary energy consumption indicator by at least 30 per cent, or achieve an improvement in the housing’s energy rating to obtain energy class "A" or "B" on the same rating scale.

These points must be accredited by means of the energy efficiency certificate for the housing issued by the competent technician after the works have been carried out, with respect to the one issued before the start of the works, with a maximum of two years.

Conducted from October 6, 2021 to December 31, 2022.

Deduction base:

The amounts paid between 6 October 2021 and 31 December 2022 for the work are eligible for the deduction.

Maximum €7,500.

Tax period during which this applies:

The one in which the energy performance certificate was issued after the work was carried out. These certificates must be issued before January 1, 2023.

Deduction percentage: 40%

3. Deduction for energy renovation works: 60%

Buildings on which the works can be carried out:

Housing owned by the taxpayer - located in buildings of predominantly residential use - and parking spaces and storage rooms acquired with these.

However, the part of the housing used for economic activities is not eligible.

Works that are not eligible:

Those that have reduced the consumption of non-renewable primary energy by at least 30 per cent or improved the building’s energy rating to energy class "A" or "B" on the same rating scale.

These points must be accredited by means of the energy efficiency certificate for the housing issued by the competent technician after the works have been carried out, with respect to the one issued before the start of the works, with a maximum of two years.

Carried out from 6 October 2021 and 31 December 2023.

Tax periods during which this applies:

In principle, this can be applied during 2021, 2022 and 2023. However, in order to be able to apply the deduction, the energy efficiency certificate must have been issued after the works have been carried out. These certificates shall be issued before 1 January 2024.

Annual deduction base:

• When the certificate has been issued during the tax period:

  Amounts paid from 6 October 2021 until the end of the tax period.

• When the certificate was issued during a previous tax period:

  The amounts paid during the year.

Maximum base €5,000 per year.

The amounts paid that have not been deducted because they exceed the maximum annual deduction base may be deducted, with the same limit, during the following four financial years, although in no case may the accumulated deduction base exceed 15,000 euros.

In the case of work carried out by a community of owners, the amount that may form the basis of the deduction for each taxpayer will be determined by the result of applying the coefficient of participation that he/she has in the community of owners to the amounts paid by the community of owners.

Deduction percentage: 60%

4. Common rules for the above deductions:

The above deductions are mutually incompatible in respect of the same work.

The above deductions are mutually incompatible in respect of the same work.

The amounts must be paid, by credit or debit card, bank transfer, nominative cheque or deposit in accounts with 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, deducting any amounts that, where applicable, have been subsidised through a public programme of assistance or would be subsidised by virtue of a definitive decision on the granting of such assistance.

In no case shall amounts paid in cash be eligible for deductions.

The amounts paid must be necessary for executing the works, including professional fees, costs of drafting technical projects, works management, cost of executing works or installations, investment in equipment and materials and other expenses necessary for their development, as well as the issuing of the corresponding energy efficiency certificates.

However, amounts paid for costs relating to the installation or replacement of equipment using fossil fuels are not eligible for deduction.

The energy performance certificates provided for in the previous paragraphs must have been issued and registered in accordance with the provisions of Royal Decree 390/2021, of 1 June, which approves the basic procedure for certifying buildings’ energy performance.

Non-inclusion in the tax base for the following renovation assistance:

Those granted pursuant to the provisions of Royal Decree 920/2014, of October 31, which regulates the direct granting of subsidies intended to offset the costs arising from the reception or access to television audiovisual communication services in buildings affected by the release of the digital dividend.

Those granted under the different programmes established in Royal Decree 691/2021, of 3 August, which regulates the subsidies to be granted for energy renovation actions in existing buildings, in execution of the Energy Renovation Programme for existing buildings in municipalities with demographic challenges (PREE 5000 Programme), included in the Regeneration and Demographic Challenge Programme under the Urban Rehabilitation and Regeneration Plan of the Recovery, Transformation and Resilience Plan, as well as those granted directly to the Autonomous Communities; Royal Decree 737/2020, of 4 August, which regulates the programme of assistance for energy renovation actions in existing buildings and regulates the direct granting of assistance under this programme to the autonomous communities and the cities of Ceuta and Melilla; and Royal Decree 853/2021, of October 5, regulating the aid programs for residential rehabilitation and social housing of the Recovery, Transformation and Resilience Plan; and Royal Decree 477/2021, of June 29, which approves the direct granting to the autonomous communities and the cities of Ceuta and Melilla of aid for the execution of various incentive programs linked to self-consumption and storage, with renewable energy sources, as well as the implementation of renewable energy thermal systems in the residential sector, within the framework of the Recovery, Transformation and Resilience Plan.

de medidas urgentes para impulsar la actividad de rehabilitación edificatoria en el contexto del Plan de Recuperación, Transformación y Resiliencia.(BOE, 06-octubre-2021)

de medidas urgentes para impulsar la actividad de rehabilitación edificatoria en el contexto del Plan de Recuperación, Transformación y Resiliencia.(BOE, 16-junio-2022)