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Property in Spain: the home improvements you can get a 60 percent tax deduction for

As part of the Spanish government's ‘Recovery, Transformation and Resilience Plan’, it's possible to get a tax deduction of up to 60 percent for energy-efficient renovations on your home. Here are some home improvement ideas that could help you achieve this.

Property in Spain: the home improvements you can get a 60 percent tax deduction for
These are the home improvements that could help you secure a 60 percent tax reduction. Photo: RachelW1 / Pixabay

The Spanish government’s ‘Recovery, Transformation and Resilience Plan’, which it presented to the EU to help secure €140 billion over the next six years, includes among its measures the possibility of deducting up to 60 percent of income tax if renovations are undertaken on your primary residence to improve its energy efficiency. 

The document indicates that there will be a 20 percent deduction for undertaking certain works that reduce the demand for heating and cooling in the home by at least seven percent.

A 40 percent deduction will be allowed for reducing non-renewable primary energy consumption by 30 percent.

Finally, a 60 percent deduction will be available for the completion of rehabilitation works in complete buildings, by reducing the demand for non-renewable primary energy by at least 30 percent, or by improving the energy rating of the property to an ‘A’ or ‘B’.

This is in addition to the government’s Housing Plan, which it launched in 2018 and has now extended until December 31st 2022, because of the Covid-19 pandemic. The Housing Plan gives grants for essential home improvements of up to €12,000 for things such as conservation, safety and access, as well as energy efficiency of the home and urban renovation.

READ ALSO – EXPLAINED: How foreigners in Spain can get grants for home improvements

Here are several home improvement ideas you can do in order to improve the energy efficiency of your home and benefit from these tax reductions.

Install energy-efficient double glazing
Windows are one of the most important elements when it comes to securing the energy efficiency of your home. Therefore, it is very important to make sure they are insulated correctly and have good thermal transmittance. Sto Ibérica, a company that deals with energy-efficient renovations, recommends installing double glazing with an air chamber of at least 10 mm to maximise energy efficiency.

Install thermal insulation
Thermal insulation can be installed in the walls, floors, and ceilings of your property to improve the overall energy efficiency, keeping it warm in winter and helping it to stay cool in summer. Insulation can be added to the facade of the building, although to make it more energy efficient, an interior thermal insulation system should be installed.

Control the amount of sunlight
It’s essential to control the amount of direct sunlight that enters your home and change it according to the seasons. You want to allow lots of direct sunlight in winter to help heat up your home, so you don’t use so much heating and you want to direct it away from your home in summer, so you don’t use the air-conditioner or fans so much. estimates that the overall energy savings from installing high-performance technologies and daylight controls are as high as 75 percent. These could include things such as smart blinds, sunshades and awnings.

Eliminate drafts
It’s important to identify and repair any air leaks or drafts in your property by sealing the gaps between the doors and windows and the walls. With these measures, it will be possible to save up to 50 percent in the consumption of air conditioning in the home, according to Sto Ibérica.

Improve ventilation systems
While you want to eliminate drafts and air leaks, it’s also important that your property is well ventilated to avoid too much humidity or dampness and to help it cool down in the summer. Natural ventilation is important, but Eco Home Essentials also suggests installing the option of a controlled ventilation system to maintain good air quality in your home when the outside air is not so favourable. This will also help improve efficiency.   

Install efficient air conditioning and heating
In general, installing air conditioning units add to climate change issues, but if you have an old or inefficient unit, then it’s definitely worth exchanging it for a new one. According to the Alliance to Save Energy, air conditioning systems account for 40 to 50 percent of the energy consumed in a home. For this reason, it is best to buy the most energy-efficient option. In terms of heating, there are several energy-efficient options, from condensing boilers to low-temperature radiators, underfloor heating, and smart thermostats.

Implementation of automation systems
Home automation allows the intelligent management of the home to be controlled and automated. Not only does this provide greater comfort and security, but it also helps to efficiently manage the use of water, electricity, and fuel, making better use of resources and using the lowest cost hourly rates.

READ ALSO: Spain’s new electricity rates for 2021: the tricks to help you save up to €300 a year

Use renewable energies
Along with the above improvements, one of the best things you can do is to use renewable energies, such as installing solar panels; getting a biomass boiler, which uses natural fuel; and using LED light bulbs. As well as this, you can make sure your electrical appliances have a low consumption energy label. 

For more information on how to undertake this type of project, the Institute for the Diversification and Saving of Energy (IDEA), along with the Higher Council of Architects of Spain (CSCAE), has prepared a guide that focuses on the optimisation of energy efficiency when renovating buildings. 

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For members


How to turn a bar, office or shop into a residential property in Spain

Commercial properties in Spain can be a lot cheaper than residential ones, but it’s not as straightforward as buying a former restaurant, office or shop and moving in. Here are the steps to follow and what you need to be aware of.

How to turn a bar, office or shop into a residential property in Spain

One of the tricks budget property hunters in Spain have been using in recent years is buying a local (commercial property), oficina (office) or nave (industrial unit) and transforming it into a vivienda (residential property) to live in or let out. 

It’s a trend that’s roughly doubled in big cities such as Madrid and Barcelona in the last five years. 

Buying a commercial property can work out to be 50 percent cheaper than a flat or house in Spain and there can be other advantages such as it being more open plan than Spain’s typical corridor-themed apartments as well having more money to invest in the renovation. 

Is it possible to turn a commercial property into a residential property in Spain?

Yes, in theory it is, but it’s not always possible. The rules relating to a change of property’s usage from commercial to residential or vice versa are determined by each municipality in Spain, so before you rush to buy un local, you have to do your homework first and be aware of some of the most common pitfalls.

It could be that the limit of residential properties per hectare has been surpassed already, or that without some major changes the property doesn’t meet the standards of size, rooms, space, height, layout, ventilation, air extraction or light of the town or city hall. 

It isn’t the most straightforward process and depending on the property and the individual municipal rules in place, it might just not be possible to live in the property or rent it out to others.

Living in a commercial property is illegal and may cause you problems such as not being able to activate water and electricity or register your padrón at the town hall.

Despite all the paperwork needed, flipping a bar or office and turning it into a home usually works out cheaper than buying a residential property in Spain. (Photo by ANDER GILLENEA / AFP)

Don’t be discouraged however, as in many cases it is possible to change the use of a property from commercial to residential and in regions such as Galicia authorities are currently facilitating the process to address the matter of empty abandoned stores and the lack of well-priced accommodation for young homeowners.

What are the steps to follow in Spain to change a property from commercial to residential?

Check the statutes of the community of owners: In order to make any changes within the community of neighbours, permission must be requested in advance. Beforehand, you can ask the comunidad president for a copy of the community statutes to see if the change of use from commercial to residential is mentioned.

READ ALSO: ‘La comunidad’ -What property owners in Spain need to know about homeowners’ associations

Request permission from the town hall: After getting the green light from la comunidad, you have to go to the ayuntamiento (town hall) of the town where the property is to find out if it’s possible to add another residential property to the finca (building). 

Even if this is confirmed, it doesn’t certify that the change of usage from commercial to residential is allowed, for which the town hall will ask you to provide an architect’s proyecto técnico or feasibility report based on municipal urban laws. You will only be allowed to swap from commercial to residential if the project meets the safety and habitability requirements of the Technical Building Code (Código Técnico de la Edificación).

Get the Building Licence: Known as licencia urbanística or permiso de construcción in Spanish, this is an official document required by the town hall for you to carry out a construction or renovation project. In other words, you’ll need this municipal authorisation to begin work on your future residential property, whether it’s major work or minor . 

Get the Certificate of Habitability: Once the renovation work is complete, you’ll need the cédula de habitabilidad to be able to move in or let the property out . The conditions for this are regulated by each regional government and again it’s an architect who must prepare a technical report in order for a town council technician to issue the certificate of habitability.

The certificate we need for the change of use is that of primera ocupación (first residential occupation), which has to include the usable surface area of ​​the home, rooms, address, location, maximum inhabitants etc.

How much does it cost to transform a commercial property into a residential one in Spain?

If for example it’s a 80m2 property with two rooms, the total would be about €50,000, according to property websites Idealista and Habitissimo, with the bulk covering renovation costs (€500/m2= €40,000) and the rest going to cover permits, architecture costs and taxes.