Before tackling this issue it is necessary to solve another that has to do with the concept of habitual residence since except in a few exceptions it will only be possible to deduct for the house that we inhabit and not for second or third residences. In order for the Treasury to consider a home, as usual, it must meet three requirements, which are the following:
- That is your residence for a continuous period of at least three years from your purchase
- That the taxpayer inhabits it effectively and permanently in a period not exceeding twelve months, counted from the date of acquisition or completion of the works.
- The annexes and parking spaces acquired jointly with the dwelling are assimilated to the habitual residence for purposes of the deduction.
Properties that meet these three conditions may access deductions for acquisition and rehabilitation of housing, construction or expansion and adaptation for reasons of disability, as well as deduct for rent. However, in this last point, the Treasury tends to ‘forget’ about the need to stay three years in housing, even if the legislation does not establish any clear exemption in this respect.
The deduction for the home purchase
The deduction for housing in 2015 and 2016 obliges us to differentiate between properties acquired before January 1, 2013, and those that were previously purchased.
Acquisition as of 2013
From January 1, 2013, the deduction for the acquisition of a habitual residence no longer applies in the Spanish territory. This means that those who buy your house now can not deduct in the income statement, as simple as dramatic.
There is an exception to this general rule and it is the one that applies to those who bought their house under construction and it did not finish building in 2012. These people will be able to deduct whenever the purchase-sale closed in 2012.
Acquisition before 2013
People who buy their house before January 1, 2013, can continue to deduct as they had done so far -or start doing it for purchases in 2012-.
According to Royal Decree-Law 20/2011, of December 30, urgent measures in budgetary, tax and financial matters for the correction of public deficit establishes the form in which the deduction for housing and the percentages can be applied. This deduction is available to anyone who has purchased a home before 2013, regardless of their level of income, provided that the use of the same is for their usual residence.
Those who meet these requirements can deduct 15% off the amounts contributed with a maximum limit of 9,040 euros, which translates into a maximum deduction of 1,356 euros. In this way, no matter how much we contribute 20,000 euros to the purchase of housing, we can only apply the deduction on the first 9,040 euros.
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The amount on which to apply the 15% deduction is obtained from the sum of the amortized capital, the interest paid and the expenses derived from the financing -the mortgage-, such as life insurance linked to it and that the majority of banks obliges to contract along with the mortgage loan- http://aimecs11.org/down-markets-plus-business-growth-walls.
What if I change my house?
Those who buy a second home to make it habitual should keep in mind that if the acquisition takes place in 2013 they can not deduct for it. However, if the purchase was made in 2012, they will be able to do so, although in a different way to the first home. In this sense. You can not begin to apply the deduction for the habitual residence until the investment does not exceed the amounts invested in the previous home.
Let’s see it much better with an example: a person who has deducted 50,000 euros for several years for the purchase of an apartment can not deduct tax for the purchase of a home until he has invested more than 50,000 euros in the new one. This is the form that the Treasury has that does not deduct double for having changed your home.
If in addition the change of house is from a habitual residence to another habitual residence, it is possible to benefit from the exemption for reinvestment in habitual residence thanks to which, basically, it exempts from the payment of taxes for the sale of the dwelling provided that the amounts obtained are invested in the acquisition of a new habitual residence. Here you can find more information about it.
Rehabilitation of habitual residence
In the case of housing rehabilitation, in 2013 there was a transitional period by which people who had made before January 1, 2013, still give rise to deduction as long as they finish before January 1, 2017, and that the taxpayer has been deducted in 2012 or in previous years.
In this sense, Royal Decree-Law 6/2010 of April 9 and Royal Decree 2066/2008, of December 12 as well as in the Personal Income Tax Law continue to establish the cases in which it is possible to deduct for the rehabilitation of housing.
At present, it can be deduced from any work that “aims to improve energy efficiency, hygiene, health, and environmental protection, the use of renewable energies, safety and sealing, and in particular the substitution of installations of electricity, water, gas or other supplies , or favor accessibility to the building or dwellings, in the terms provided for in Royal Decree 2066/2008, of December 12, which regulates the State Housing and Rehabilitation Plan 2009-2012, as well as for the installation works of telecommunication infrastructures carried out during this period that allow access to the Internet and digital television services in the taxpayer’s habitual residence ” .
Now the deductions that can be made for this concept are extended whenever the reform is carried out before 2012. The deduction will be 20% in all cases, but as with the habitual residence, the base is progressively reduced on which to practice it until it disappears in the 71,007.2 euros. The distribution is as follows:
- If the tax base is equal to or less than € 53,007.20 per year, the limit is € 6,750 per year.
- If the tax base is between 53,007.21 and 71,007.20, the limit will be the result of 6,750 – 0.2 x (Taxable Base – 33,007.20).
The deduction can be practiced for a period of four years at the rate of the aforementioned 6,750 euros per year, which means that the maximum amount to be deducted is 20,000 euros.
Renting the habitual residence is another element that allows deducting who rent and the landlord. In the case of the tenant, who is who lives in the house, the deductions are similar to those of the purchase of the house, but since 2015 there are restrictions on who can and can not deduct for the rent you pay.
Rentals before and after 2015
If in the case of the purchase of housing the year 2013 marks the cut between when it can and can not be deducted, with the rebate for the lease of habitual residence the point of reference is 2015. Those who rent their house before 2015 may continue to deduct as long as they comply with the rest of the requirements – we’ll let you know what they are next -.
However, subsequent rents no longer deduct. If you have changed your home in 2015, you will not be able to deduct for renting the new home.
How it works when renting a home
The deduction for rent of housing in the case of the tenant is divided into a state and another autonomous section. This means that there is a deduction applied throughout the national territory and another that depends on each Autonomous Community. The deduction of the state tranche maintains the same rates as the deduction for housing, only that the percentage to be deducted is 10% on the amounts contributed. In the regional deduction, there are more differences and regions that apply it to others that do not. To know them you only have to look for our post titled: Deduction for rent of habitual residence: the tenant.
In the case of the landlord or who puts the house for rent, the first thing you should know is that the rent is exempt from paying the VAT provided that the house is used for a regular residence. And for income tax purposes, you can deduct the costs derived from renting the house, such as interest on the mortgage, state taxes, administration or conservation expenses, among others, that will be subtracted from the benefit obtained from the rent. Additionally, they can apply a reduction of 100% on the income obtained when it is rented to those under 30 who meet certain economic conditions. Otherwise, the reduction will be only 60%. And if you rent a company or a freelance for commercial premises or office directly you can not apply any type of reduction.
These are the usual issues although afterward there are many specific cases that can generate doubts. Many of them have already been treated in the comments of this post, but we are always open to answering more questions in this thread.