Spanish Homeowners Can Get Tax Deductions Of Up To 60% For These Home Improvements

Energy efficiency is incredibly important in Spanish homes, particularly given the rising cost of fuel and energy prices in the country.  To support Spanish homeowners amongst the cost of living crisis the Spanish government introduced a new scheme offering a tax deduction of up to 60 percent for energy-efficient renovations to your home. This scheme was first introduced in 2021 as part of Spain's ‘Recovery, Transformation and Resilience Plan’. And now the Spanish government has extended the offer until 2024.

Here’s everything you need to know about how the plan works and the kind of home improvement ideas you could add to your home:

What Is The Recovery, Transformation and Resilience Plan?

The Recovery, Transformation and Resilience Plan was first discussed by the Spanish government in 2021 and included up to 60% income tax reductions for energy efficient home improvements. This plans were finally introduced on 16th June 2022.

Because it took such a long time to get the ball rolling and because the scheme has been such a success it has now been extended until the end of 2024. The EU Recovery Plan initially allocated €6.82 billion to housing, with a special emphasis on designs to improve energy efficiency and one of the reasons that the scheme hasn’t been extended at this point is because the funds available haven’t been fully spent yet.

How Does The Recovery, Transformation and Resilience Plan Work?

There are three types of deductions you can apply for under the plan. The deduction applicable for you will depend on the property you own. There are two deduction schemes available for private homes and one for residential buildings. Homeowners can apply for a 20% deduction, up to 5,000 euros for any home improvement works that reduce the demand for heating and cooling in the home by at least seven percent, for example.

You can receive a 40% deduction if you make changes that will reduce  non-renewable primary energy consumption by 30 percent, up to €7,500 per year. In both cases you can only get this deduction if you can provide an energy certificate showing clearly that the work was completed and its impact.

The final and most desirable deduction is to get 60% off, up to €15,000 for the completion of rehabilitation works of entire buildings, by reducing the demand for non-renewable primary energy by at least 30 percent, or by improving the energy rating of the property to an 'A' or 'B'.

The three deductions are not compatible with each other: that means that you can’t apply for more than one deduction for the same home improvement project. But if you are carrying out more than one project on your property then you can apply for different deductions for each separate project.

What Works Are Including In This Plan?

If you’re thinking of completing home improvement works and want to take advantage of these tax deductions then there are some of the works that you can consider:

  • Energy efficient double glazing. Windows are one of the most important elements in ensuring that your home is secure and energy efficient. Installing double glazing that has good thermal transmittance is a great start. It is recommended that the windows you install have an air chamber of at least 10 mm to maximise energy efficiency.
  • Thermal insulation. This can be added to your walls, floors or ceilings (or all three). Insulation plays an important role in ensuring that your home is warm in the winter and cool in the summer. It also increases energy efficiency.
  • Add smart blinds or sunshades. Controlling the amount of direct sunlight that enters your property can help to control temperatures. During the summer closing the shades will keep your home cooler, whilst winter sun can help heat your home. Installing high-performance technologies and daylight controls can improve efficiency by as much as 75 percent.
  • Draft exclusion. Identifying and repairing any  air leaks or drafts in your property by sealing the gaps between the doors and windows and the walls can improve energy efficiency and reduce your consumption.
  • Install energy efficient air conditioning and heating. These can be expensive to install and in general air conditioning is considered to be bad for the environment. But if you have an old or inefficient unit in place already then replacing it will help to improve the energy efficiency of your home. The same applies to your heating system: ensure that it is as efficeint as possible.
  • Use reneweable energy systems. As well as making the above improvements you should also use renewable energy systems. These include  installing solar panels; getting a biomass boiler, which uses natural fuel; and using LED light bulbs.

Do you love the Spanish summer sun? Perhaps you’re looking for a Spanish holiday home, or hope to relocate to Spain so that you can enjoy the sunshine all year round? Why not get in touch with our locally based estate agents, Right Casa, who are perfectly positioned to help you find the Spanish home of your dreams.