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Practical manual for Income Tax 2020.

For certain investments to improve sustainability in habitual housing

Regulations: Art. 3 of the Revised Text of the Legal Provisions of the Autonomous Community of the Balearic Islands on Taxes Transferred by the State, approved by Legislative Decree 1/2014, of June 6.

Amount of deduction

50 percent of the amount of investments that improve the quality and sustainability of housing, made in the property, located in the Balearic Islands, which constitutes or will constitute the habitual residence of the taxpayer or of a tenant by virtue of a rental contract signed with the taxpayer subject to urban rental legislation.

In order to apply the deduction, the taxpayer must be the owner or landlord of the home and the home must meet the requirements established in the state tax regulations to qualify the home as habitual residence, either belonging to the taxpayer or to a tenant with whom the taxpayer has signed a rental contract.

Maximum deduction base

The basis for this deduction will be the amount actually paid by the taxpayer to make the investments described above, with a maximum limit of 10,000 euros annually.

The taxpayer's deduction base may not exceed the result of applying the percentage of ownership of the property to the total amount paid to improve the sustainability of the habitual residence.

The amounts paid shall be justified by means of invoices that meet the requirements established in legal and/or regulatory standards or an equivalent substitute document.

Requirements and other conditions for the application of the deduction

1. In general

  • The following investments are understood to improve the quality and sustainability of housing:

    1. The installation of generating equipment or equipment that allows the use of renewable energy such as solar, biomass or geothermal energy that reduces the building's consumption of conventional thermal or electrical energy. This will include the installation of any renewable energy technology, system or equipment, such as solar photovoltaic generation facilities for self-consumption, thermal solar panels, in order to contribute to the production of hot water required by homes, or the production of hot water for air conditioning installations.
    2. Improvements to supply facilities and the installation of mechanisms that promote water savings, as well as the implementation of separate sanitation networks in the building and other systems that promote the reuse of grey water and rainwater in the same building or on the plot or that reduce the volume of discharge into the public sewerage system.

  • In any case, for the application of the deduction, the energy efficiency rating of the habitual residence will be improved by at least one level. For this purpose, the registration of the energy efficiency certificates of the dwelling will be required in accordance with the provisions of Royal Decree 235/2013, of April 5, which approves the basic procedure for the energy certification of buildings, before and after making the investments.

    In the event that the works begin in one year and are completed in a subsequent year, the deduction for the amounts paid in that period can be applied in each tax period, provided that all the required conditions are met upon completion of the works (in particular the accreditation of the energy efficiency certificate registry).

  • In order to apply this deduction, the total taxable base (sum of the general taxable base and the taxpayer's savings taxable base boxes [ 0435 ] and [ 0460 ] of the declaration), may not exceed :

    - 30,000 euros in individual taxation.

    - 48,000 euros in joint taxation.

2. When the taxpayer is the landlord of the home

When the taxpayer is the landlord of the home, the application of the deduction requires that following requirements be :

  • That the duration of the lease agreement of the home with the same tenant is equal to or greater than one year .
  • That the deposit of the security deposit referred to in article 36.1 of Law 29/1994, of November 24, on urban leases, has been constituted in favor of the Balearic Housing Institute.
  • That the taxpayer declare in the IRPF the income derived from the rental income of the home as income from real estate capital .
  • That the taxpayer does not pass on to the tenant the cost of the investments that determine the right to apply this deduction.