Homeowners may claim a 20% deduction for energy rehabilitation works

The application of deductions for energy efficiency improvement measures in the primary residence has raised doubts regarding the deadlines for exercising this right. Following a recent binding ruling, the temporal and documentary conditions necessary for taxpayers to benefit from this tax incentive in the Personal Income Tax (IRPF) have been clarified.

What the DGT has ruled

The Dirección General de Tributos (DGT) establishes that taxpayers are entitled to a 20% deduction of the amounts paid for works that achieve a reduction of at least 7% in the heating and cooling demand of the home. For this deduction to be valid, the following criteria must be met:

• Technical certification: It is essential to have a certificate that proves the reduction in demand.
• Issuance deadline: The post-work certificate must be issued before January 1, 2027.
• Timing of the deduction: The deduction is applied in the tax period in which said certificate is issued. However, if the certificate is issued in a year following the payment for the works, the taxpayer has the option to claim the deduction in the year the payment was made.
• Previous certificates: A certificate issued before the works will be valid provided it was issued no more than two years before the start of the actions.

What this means for you

If you are the owner of a primary residence and plan to make investments to improve its energy efficiency, you must pay special attention to the issuance date of the technical certificates. The regulations allow for some flexibility to prevent the gap between the economic outlay and the obtaining of the certificate from hindering the use of the tax benefit, allowing the deduction to be applied in the year of payment if the certificate arrives later.

What you should do

It is necessary to ensure that any energy rehabilitation work is backed by a technical certificate that strictly complies with the required demand reduction requirements. It is recommended to verify that the issuance of technical documentation takes place within the established time limits to avoid losing the right to the deduction in your income tax return. Each situation regarding works and certification should be analyzed to determine the most appropriate tax year for its application.