Co-owners of a property may apply the energy efficiency deduction based on their ownership share

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

What the DGT has ruled

The query concerned whether the deduction for works to improve energy efficiency, provided for in the Personal Income Tax (IRPF) Law, should be strictly limited to the ownership percentage or if it could be applied differently. The DGT's criteria establish that each co-owner of the property may apply the deduction for the amounts they have paid for the works in the part that proportionally corresponds to their ownership percentage.

A key aspect of this resolution is that this right remains valid even if the invoice for the works has been issued solely in the name of one of the co-owners. The administration recognizes that the ownership of the expense for deduction purposes does not depend exclusively on who appears on the billing document, but on the reality of the ownership and the payment for the works.

What it means for you

If you are a co-owner of a property and carry out works to improve its energy efficiency, you are not required to have all invoices in your name to benefit from the state deduction. The right to the deduction is divided according to your ownership percentage in the property.

For this right to be effective, it is necessary for each owner to be able to prove that they have paid the amounts corresponding to their proportional part. The regulations allow for the use of any means of evidence valid under the Law to demonstrate said economic disbursement.

What you should do

When carrying out these types of works in shared homes, it is fundamental to organize the payment documentation. Even if the invoice is issued to a single co-owner, the others must keep proof of transfers or payment methods that certify their participation in the cost of the works. It is necessary to assess the particular situation of each co-ownership to ensure that the deduction is applied correctly in the IRPF tax return.