If we had to name the most important innovation in 2021 Income Tax, this would be, without doubt, the introduction of three new deductions for works which improve energy efficiency of main residence. Most specifically, 2021 Income Tax Return admits the following new deductions:
- FIRST DEDUCTION: 20% of the amounts paid for WORKS that reduce HEATING AND COOLING of the habitual residence by, at least, 7%. This deduction admits a maximum base of 5.000€
- SECOND DEDUCTION: 40% of the amounts paid for works that reduce NON-RENEWABLE ENERGY CONSUMPTION by, at least, 30%. In this case the maximum deduction base is 7.500€
- THIRD DEDUCTION: 60% of the amounts paid for works that improve ENERGY EFFICIENCY of dwellings located in buldings for mainly residential use. In this case, the maximum deduction base is 5.000€, though the rest may be deducted in the following four years, with the same annual limit and up to a total maximum of 15.000€ (including the amount deducted in 2021).
Evidence of energy efficiency improvement
The improvement is to be determined with basis on two ENERGY EFFICIENCY CERTIFICATES, issued by a technician of an approved inspection body: one before and one after the works.
To be deductible, the works must start on a date equal or later than 10.06.2021 and finish before 12.31.2022 (in case of the 1st and 2nd deductions) or before 12.31.2023 (in case of the 3rd deduction).
Please, note that the deduction is not applicable to the parts of housing used in business activities.
Besides, the 2nd and 3rd deductions are not applicable to elements such as garage spaces, sotrage rooms, gardens, parks, etc.
The deduction has to be applied in the tax period in which the Energy Efficiency Certificate is issued or in the period of payment, if this is prior to the issuance of the certificate.
Finally, notice that each of these deductions is incompatible with the other two.