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Practical manual for Income Tax 2022.

Example: Deduction for improvement works that reduce the consumption of non-renewable primary energy

The married couple, Mr. TP and Ms. PZ, married under a community property regime, carried out works in March 2022 in their habitual residence (located in a residential building) which consisted of installing insulating panels (wall cladding) on the walls and thermal insulation on the false ceilings. A new aerothermal heating and air conditioning system was also installed in the home.

The total amount (including the issuance of energy efficiency certificates) amounted to 28,000 euros. The amount was paid in two payments. One at the start of the work for an amount of 20,000 euros and another at the end for the remainder (8,000 euros). Payments were made by personal checks.

In addition, a grant of 8,000 euros was requested and obtained from the programme to promote improvements in energy efficiency and sustainability in housing.

To prove compliance with the requirements for applying this deduction, an energy efficiency certificate was requested before and after the works. The latter was issued on December 20, 2022 and qualified the home as energy class "B" on the energy consumption scale.

Determine the amount of the deduction for 2022, both in individual and joint taxation.

Solution:

Taxpayer Mr. TP:

  • Deduction base: 20,000 euros ÷ 2 = 10,000. (2 spouses)

    Note: The amount of the public subsidy obtained (8,000 euros) is deducted from the total amount paid (28,000 euros). Therefore, 28,000 - 8,000 = 20,000

  • Maximum deduction base: 7,500 euros

  • Deduction amount: (7,500 x 40%) = 3,000

Taxpayer Mrs. PZ:

  • Deduction base: 20,000 euros ÷ 2 = 10,000. (2 spouses)

    Note: The amount of the public subsidy obtained (8,000 euros) is deducted from the total amount paid (28,000 euros). Therefore, 28,000 - 8,000 = 20,000

  • Maximum deduction base: 7,500 euros

  • Deduction amount: (7,500 x 40%) = 3,000

Joint statement by Mr. TP and Mrs. PZ

  • Deduction base: 20,000 euros = 20,000

  • Maximum deduction base: 7,500 euros

  • Deduction amount: (7,500 x 40%) = 3,000