Co-owners may claim energy efficiency improvements even if the invoice is issued individually
The application of deductions for energy efficiency improvement works in housing has raised doubts regarding the validity of the invoice when co-ownership exists. The Dirección General de Tributos (DGT) has recently clarified the tax treatment applicable in these cases of shared ownership.
What the DGT has ruled
The DGT establishes that co-owners of a property are entitled to claim the deduction for energy rehabilitation works provided for in the Personal Income Tax (IRPF) Law. The fundamental criterion is that each owner may deduct the amounts they have paid in the proportion that corresponds to their ownership percentage.
A key aspect of this ruling is that this right is maintained regardless of whether the invoice was issued solely in the name of one of the co-owners. For the deduction to be valid, the interested parties must prove that they have paid the amounts for the execution of the works through any means of evidence valid under the law.
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 do not need all invoices to be in your name to benefit from the deduction. The determining factor is not the name of the recipient on the commercial document, but rather the ability to demonstrate that you have contributed the capital corresponding to your ownership percentage.
In the event that the co-owners file tax returns individually, the deduction limits will apply to each tax return based on the amounts each person has allocated to the works, always in proportion to their ownership percentage.
What you should do
To ensure the right to the deduction, it is necessary to have documentation that proves the actual payment for the works by each co-owner. It is recommended to:
- Keep all proof of payment (bank transfers, receipts, etc.) that demonstrate the outflow of funds from each co-owner's account.
- Verify that the ownership percentage in the property matches the proportion of the investment intended to be deducted.
- Maintain the technical documentation of the work that certifies the energy efficiency improvement carried out.
Frequently asked questions
- Is it necessary for the work invoice to be in my name to deduct the expense?
- No, you can deduct your proportional part as long as you prove that you have paid your share of the work.
- How are the deduction limits applied if there are multiple owners?
- The limits are applied individually to each tax return based on the amount each person has allocated to the work according to their ownership percentage.