Homeowners cannot deduct the relocation of gas pipes in renovation works

The application of energy renovation deductions in Personal Income Tax (IRPF) requires strict compliance with the permitted expense concepts. A recent resolution from the Dirección General de Tributos (DGT) has delimited the scope of these amounts, directly affecting homeowners carrying out efficiency improvement works in their homes.

What the DGT has ruled

The inquiry asked whether the amount of an extraordinary assessment intended for the relocation of natural gas pipes could be included in the base for the deduction provided for in the fiftieth additional provision of the IRPF Law. The advisory body has ruled that this expense is not deductible.

The criterion is based on the fact that current regulations expressly exclude from the amounts that can be computed the costs relating to the installation or replacement of equipment that uses fossil fuels. Since the relocation of pipes constitutes an action on a natural gas infrastructure, the expense falls outside the scope of application of the energy efficiency deduction.

What it means for you

If you are a homeowner and are carrying out energy renovation works to reduce the consumption of non-renewable resources, you must be careful with the composition of your invoices and assessments. Not all costs associated with this type of renovation allow for the tax benefit.

Specifically, any disbursement linked to gas infrastructure, whether for the installation, replacement, or relocation of pipes, cannot be included in the calculation of the deduction. The administration interprets that these actions do not align with the objective of the rule, which seeks to incentivize the transition toward cleaner energy sources and the reduction of fossil fuel use.

What you should do

When executing energy renovation works, it is necessary to make a clear distinction between the expense concepts. To ensure the correct application of the deduction, it is recommended to:

• Identify and separate gas infrastructure costs from those intended exclusively for improving energy efficiency.
• Verify that the financed actions focus on elements that effectively reduce non-renewable energy consumption.
• Assess each particular case with a professional to determine which items comply with the requirements of the IRPF Law and the applicable Royal Decree-laws.