Tax deductions and aid to renovate buildings and save energy

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1. It creates three deductions in personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPFIRPF Impuesto sobre la Renta de las Personas Físicas: Spain's personal income tax, paid on earnings.) for works that improve the energy efficiency of a main home or a rented home. The first allows a 20% deduction of the amounts paid, up to 5,000 euros per year, if heating and cooling demand is reduced by at least 7%. The works must be done between the entry into force of Royal Decree-Lawroyal decree-law A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses. 19/2021 and December 31, 2022.
2. The second deduction is 40%, up to 7,500 euros per year, if the works reduce non-renewable primary energy consumption by at least 30% or achieve energy class A or B. The energy efficiency certificate must be issued before January 1, 2023.
3. The third deduction is 60%, with a cumulative maximum of 15,000 euros, for energy renovation works in buildings with mainly residential use, done by December 31, 2023. They must reduce the building's non-renewable primary energy consumption by at least 30% or achieve class A or B.
4. Homeowners' associations may approve, by simple majority, works that improve the building's energy efficiency or install common renewable energy sources, and may also request aid and financing for them. The cost of these works counts as a general expense.
5. It strengthens the ability of homeowners' associations to take out loans for the conservation, renovation and improvement of buildings.
6. It creates a State guarantee line, through an agreement between the Ministry of Transport, Mobility and Urban Agenda and the Official Credit Institute (Instituto de Crédito Oficial), so that banks can finance energy renovation works with loans of up to fifteen years. The maximum amount of guarantees is 1,100 million euros.

Who it affects

• Homeowners who do energy improvement works: They can deduct part of the cost from their income tax, depending on each deduction's requirements.
• Homeowners' associations: They can approve energy efficiency works and request financing by simple majority, and find it easier to take out loans.
• Tenants and landlords who rent out their home: The deductions also cover homes rented for use as a home, if rented before December 31, 2023.
• Credit institutions: They can offer loans of up to fifteen years partially covered by the new State guarantee line.

Words worth knowing

IRPF

Impuesto sobre la Renta de las Personas Físicas: Spain's personal income tax, paid on earnings.

Cuota íntegra estatal

The portion of the income tax that goes to the State, before deductions are applied.

Certificado de eficiencia energética

Official document showing how much energy a building or home uses, with grades from A (best) to G (worst).

Energía primaria no renovable

Energy from non-renewable sources, such as oil or gas, measured before it reaches the consumer.

Mayoría simple

Simple majority: more than half of those present vote in favor, with no extra requirements.

royal decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries