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Taxes For Members

La Renta: What items can you deduct on your Spanish tax return in 2024?

The Local Spain
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La Renta: What items can you deduct on your Spanish tax return in 2024?
Deductions you can make on your Spanish tax return. Photo: Mikhail Nilov / Pexels

Find out what costs you can and can't claim back on your annual Spanish tax return or 'declaración de la renta' this year.

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Spain's annual tax return is known as the declaración de la renta and completing it or knowing what you can claim back as an expense can be quite tricky, particularly because there are many regional differences too. 

Anyone residing in Spain for more than 183 days and earning over €22,000 a year, who is self-employed (autónomo), or moved here in the last year, must complete it. 

Your Spanish income tax return has to be filed by July 1st for the preceding year, in this case for 2023.

There are many different allowances or deductions that can be made on your tax return such as deductions for couples, mothers, children, single parents, elderly parents, disabilities and large families.

This article, however, focuses specifically on costs that you can claim back on your tax return. For example, can you deduct rental or mortgage expenses, property tax or private health expenses? Read on to find out. 

READ ALSO: 11 mistakes to avoid when filing your Spanish tax return

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Spanish pension contributions

Up to €1,500 can be deducted for contributions to pension plans, this used to be €2,000, but the Spanish government changed it last year.

If it's a contribution from your company contributes, then it is €8,500. Therefore, the pension plan deduction is, at most, €10,000 or 30 percent of your net earnings from work.

Property tax

Those who own a property in Spain will pay the yearly Impuesto Sobre Bienes Inmuebles, better known as IBI. This is similar to council tax in the UK. If you make money from property in Spain - ie you rent it out, then this is one of the expenses you can claim back on your annual declaration. If you live in it yourself, unfortunately, you can't include it. 

READ ALSO: What are the fines if you make mistakes on your Spanish tax return? 

The costs of renovating your main home

Keep in mind, that you can’t just deduct the cost of any renovations on your home, particularly if they’re just cosmetic, but you can deduct for any renovations which reduce the demand for heating and cooling by at least seven percent. In this case, you can apply a 20 percent deduction, with a maximum of €5,000. 

Find out what you can deduct on your Spanish tax return. Photo: Christina @ wocintechchat.com / Unsplash
 

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Buying or rental costs of your main home

This expense can only be deducted by those who bought their property and signed the mortgage before January 1st, 2013 and must have included it in previous declarations. The tax benefit is up to 15 percent with a maximum limit of €9,040, while the maximum deduction will be €1,356.  

Many regions also let you make deductions if you're renting, but the signing of the contract must have been made before January 1st, 2015.

Some regions will also allow you to deduct further expenses if you buy a house in a rural area or habitually live in an area at risk of depopulation, such as in Andalusia, Cantabria, Castilla La-Mancha, Extremadura, Galicia, La Rioja and Valencia. You can also deduct expenses for the cost of buying a residence for a particular group of people, be it young people in need, victims of domestic violence, disabled people or large families.

READ ALSO: Is it better to do a joint or separate tax declaration if you're a couple in Spain? 

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Donations

Donations of many kinds can be deducted from your annual tax declaration, whether they’re charitable donations, donations to cultural institutions, donations for scientific advancement, innovative technologies or the environment.

Generally, you can deduct 80 percent of the first €150 and 35 percent of any donations after that. If you have any doubts as to whether the donations you made last year can be included, it’s best to check with your accountant or gestor.

Investing in new companies

If you invested in a new company in Spain, it's important to be aware that since January 1st, 2023, the maximum deduction for this has been increased from €60,000 to €100,000. In addition, the deduction percentage has also been increased: from 30 to 50 percent.

In order to the eligible, the investment must remain as part of your assets for more than three years and less than 12, and the participation in the company does not exceed 40 percent of its share capital. 

For educational studies and textbooks

Many times, you can deduct the cost of education and the textbooks associated with them. In general, you can deduct 15 percent of school fees; 10 percent of language courses and; five percent of the cost of purchasing clothing exclusively for school use.

However, this does not include claiming back for all courses, unless you are autónomo (self-employed) and they are designed to help improve your business. If you’ve taken a course, it’s best to check with your gestor or accountant to see if the fees can be included on your declaration as there are slight variations between regions too.

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Investments in environmental installations (some regions only)

Many regions in Spain allow you to deduct costs of investing in environmental installations such as solar panels, thermal installations, and water-saving devices. This category also includes improvements made to your habitual residence due to disability or adaptation because of technical or structural issues. Some of the main regions you can deduct these expenses include Valencia, Balearic Islands, Canary Islands, Murcia and Galicia. It's best to contact your accountant to see if they are applicable for your region. 

Domestic help (some regions only)

In some regions in Spain, you can even deduct expenses for domestic help, such as cleaners, nannies or au-pairs. This is true in Madrid, Andalusia, La Rioja and Castilla y León.

Electric cars

This is a new rule for the 2023 tax return which allows you to make deductions if you purchased an electric car last year. Previously it was only possible if you lived in Valencia, La Rioja and Castilla y León.

It aims promote electric mobility and reduce dependence on fossil fuels by giving incentives. The vehicle must be a plug-in version and must be for personal use. The maximum base on which the deduction will be applied will be €20,000, regardless of whether you have paid more for it. The reduction will be 15 percent, but it will depend on the exact date in 2023 you bought the vehicle.

Re-locating because of work

This rule was only brought in in 2020, so it's relatively new. It allows you to reduce your tax base by up to €2,000 if you have had to change your tax address for work reasons. You can take advantage of it for two years after you move. In order to benefit from it you will have to have been registered as unemployed.

READ ALSO: Are private health costs tax deductible in Spain?

Standout regional differences

  • If you live in either the Canary Islands, Cantabria or Valencia, there are a set of special circumstances that allow you to offset other health expenses against your taxes, no matter whether you’re self-employed or if your company pays private health insurance for you or not. This can be expenses for dental treatments, private pregnancy treatments or childbirth for example. 

  • Andalusia is the only region where you can deduct legal expenses.

  • Public transport costs can be deducted in Aragón and Asturias.

Please note, we at The Local are not financial experts. What we’ve learned, we’ve learned the hard way — by getting on the phone and listening to all those frustrating automated messages. 

The information above is designed to help, but if you are in doubt or unsure of exactly what you can claim back, seek professional advice.

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