Co-owners may apply the energy efficiency deduction according to their ownership share

The application of deductions for energy efficiency improvement works in Personal Income Tax (IRPF) has raised doubts when the ownership of a property does not belong to a single person. The Dirección General de Tributos (DGT) has recently clarified the tax treatment applicable in these cases of co-ownership.

What the DGT has ruled

The advisory body has determined that each co-owner of a property is entitled to claim the deduction for the amounts they have paid for the works, provided that these correspond to their ownership percentage.

A key aspect of this ruling is that this right is maintained regardless of whether the invoice for the works was issued solely in the name of one of the co-owners. The administration establishes that co-owners may prove they have paid these amounts through any means of evidence valid under the Law, which overcomes the limitation of the billing document being individual.

What this means for you

If you are an owner of a property under a co-ownership regime and carry out works to improve its energy efficiency, you are not required to have the invoice issued in the name of all owners to benefit from the state deduction.

The deduction will be applied proportionally. For example, if an owner holds 50% ownership of the property, they may apply the deduction for the amount corresponding to that percentage, provided they can demonstrate that they participated in the cost of the works. This prevents the ownership of the invoice from blocking the other owners' right to the tax incentive.

What you should do

To ensure the correct exercise of this right, it is fundamental that co-owners maintain clear traceability of the payments made. Since the DGT allows the use of any means of evidence valid under the Law, it is necessary to have:

• Bank transfer receipts or payment records that link each co-owner to the cost of the works.
• Documentation proving the ownership percentage of each party in the property.
• Contracts or agreements between co-owners regarding the execution and distribution of the costs of the improvements.

Each co-ownership situation must be analyzed to determine the exact amount of the deduction applicable in the income tax return.