Homeowners may apply energy renovation tax deductions after selling their property

The application of deductions for improving energy efficiency in Personal Income Tax (IRPF) has raised doubts regarding property ownership at the time of filing the tax return. Following a recent binding ruling, the scope of this right has been clarified in the event of a real estate transfer.

What the DGT has ruled

The Dirección General de Tributos (DGT) has determined that the right to the deduction established in the fiftieth additional provision of the IRPF Law is consolidated in the tax period in which the energy efficiency certificate is issued and registered.

In this sense, the technical body establishes that the eventual transfer of the home after having complied with the issuance and registration of the certificate does not prevent the taxpayer from applying the deduction in their corresponding income tax return. The determining factor for the right to the deduction is the fulfillment of technical and administrative requirements at the appropriate time, not the ownership of the property at the close of the fiscal year.

What this means for you

If you are a homeowner and carry out energy renovation works, you must take two fundamental aspects into account to ensure the tax benefit:

• The registration of the certificate: The right arises with the issuance and registration of the energy efficiency certificate. Once this milestone is met, the deduction is protected against a possible sale of the property during the same fiscal year or subsequently.
• The calculation of the base: You cannot deduct the total investment if public aid has been received. The deduction base must mandatory subtract the amounts that have been subsidized through public aid to avoid a duplication of benefits.

What you should do

To guarantee the correct application of this tax benefit, it is necessary to ensure that the energy efficiency certificate is managed and registered correctly after the works are completed. Likewise, it is fundamental to maintain clear accounting of the construction costs and the subsidies received, as the deduction base must reflect only the net non-subsidized expenditure.