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Deduction for main residence

With effect from 1 January 2013, the deduction for investment in primary residence provided for in section 1 of article 68 of the Tax Law and a transitional regime is established that allows taxpayers who have acquired their primary residence before that date or paid amounts before that date for the construction, extension, rehabilitation or execution of works for reasons of disability in their primary residence and have been enjoying this tax benefit to continue practicing the deduction under the same conditions as before.

For such taxpayers, the amount of the deduction for investment in primary residence will be broken down into two sections: one state-wide and one regional-wide.

Transitional scheme

As of January 1, 2013, only the following taxpayers will be entitled to apply the deduction for investment in primary residence for amounts paid in the period in question:

  1. Taxpayers who had acquired their habitual residence or paid amounts for its construction prior to January 1, 2013.
  2. Taxpayers who have paid amounts prior to January 1, 2013 for renovation or extension work on their habitual residence, provided that the aforementioned works are completed before January 1, 2017.
  3. Taxpayers who have paid amounts for the execution of works and installations to adapt the habitual residence of people with disabilities prior to January 1, 2013, provided that the aforementioned works or installations are completed before January 1, 2017.

    In any case, in order to apply the transitional deduction regime, taxpayers must have applied the deduction for said dwelling in 2012 or in previous years, unless they have not been able to apply it yet because the amount invested in it has not exceeded the exempt amount for reinvestment or the effective deduction bases of previous dwellings.

The deduction for renting a habitual residence provided for in article 68.7 of the Personal Income Tax Law has been abolished with effect from 1 January 2015 and a transitional regime has also been established which allows taxpayers who had formalised the rental before said date and were enjoying this tax benefit to continue to apply the deduction.

Transitional scheme

  • They had a lease agreement prior to January 1, 2015;

  • That, in relation to said contract, they had paid amounts prior to said date for the rent of their habitual residence;

  • And that they would have been entitled to a deduction for rent on their habitual residence in relation to the amounts paid for renting said residence in a tax period accrued prior to 1 January 2015.

The taxpayer will be entitled to the deduction for renting a habitual residence during the tax periods in which, as a result of its extension, the validity of the lease contract signed prior to January 1, 2015 remains in effect.

The amount of the deduction under this transitional regime consists of 10.05% of the amounts paid in the tax period for the rent of your habitual residence, provided that your taxable base is less than 24,107.20 euros per year.

The maximum base for this deduction is:

  1. 9,040 euros per year, when the taxable base is equal to or less than 17,707.20 euros per year.

  2. 9,040 - [1.4125 x (BI - 17,707.20)], when the taxable base is between 17,707.20 and 24,107.20 euros per year.

Taxpayers whose taxable base, in the terms discussed above, is equal to or greater than 24,107.20 euros per year, in individual taxation or joint taxation, will not be able to apply this deduction.

They will also be able to deduct the deduction for renting a habitual residence that, where applicable, each Autonomous Community has approved for the 2017 financial year.