The income tax return starts on April 2, so if you have bought, rented or renovated a property in the Canary Islands, it is important that you know the regional deductions that you can apply in your income tax return. Many times they go unnoticed and represent a significant saving.
These are the main deductions for primary residence that you can apply this year if you meet the requirements.
Deduction for investment in principal residence in the Canary Islands
If you have acquired, built, rehabilitated or extended your primary residence, you can benefit from this regional deduction, provided that the investments comply with the requirements established in the state regulations in force as of December 31, 2012.
The deduction allows a percentage to be applied to the amounts invested during the tax year, with the following brackets depending on the taxable base:
- 5% if the sum of the general taxable income and savings taxable income is less than 25,500 euros.
- 3.5% if it is between 25,500 and 45,500 euros.
If you are under 40 years of age, the percentages increase to 5.5% and 4%, respectively, which is an additional advantage for young people accessing their first home.
The maximum deduction base is 6,000 euros per year per person. It is important to remember that public subsidies that totally or partially cover the investment will reduce this deduction base if they are considered as exempt income.
Deduction for energy rehabilitation works of the habitual residence
In order to improve the energy efficiency of Canary Island households, the Autonomous Community contemplates a deduction of 12% of the amounts invested in this type of works, provided that their purpose is to reduce energy consumption, install renewable energy systems or improve the reuse of water.
The maximum annual basis for this deduction is 7,000 euros per taxpayer, and it only applies to payments made by banking means, excluding any cash payments. In addition, it is mandatory to justify the work by means of invoices and energy efficiency certificates issued before and after the reform.
The deduction will not be applicable to expenses in furniture or household appliances nor to reforms in garages, gardens or sports facilities. Neither can it be applied simultaneously on the same amounts as other autonomic deductions such as those destined to goods of Cultural Interest or the investment in habitual residence.
Deduction for adapting the home for people with disabilities
If you have adapted your home to improve accessibility and sensory communication for people with disabilities, you will be able to deduct 14% of the amounts invested, a percentage that rises to 18% if the affected person is over 65 years of age.
The maximum base for this deduction is 15,000 euros per taxpayer. In order to be able to apply it, it is essential to accredit before the tax administration the need for the works by means of a resolution or certificate issued by the competent body in matters of disability.
Deduction for renting a primary residence in the Canary Islands
The deduction for renting a primary residence allows deducting 24% of the amounts paid for renting, with a maximum limit of 740 euros per year per taxpayer. This limit increases to 760 euros if the tenant is less than 40 years old or more than 75 years old and meets the rest of the requirements.
The sum of the general and savings taxable base must not exceed 45,500 euros in individual taxation or 60,500 euros in joint taxation. In addition, it is required that the rental expense exceeds 10% of the taxable base and that the lessor and the cadastral reference of the dwelling are identified.
Deduction for leasing linked to dation in payment transactions
This deduction, designed for those who have given their primary residence to the bank in lieu of payment and continue to live in it as a rented property with an option to purchase, allows a deduction of 25% of the amounts paid, up to a maximum of 1,200 euros per year.
The limit of the general and savings taxable base is the same as in the deduction for regular rent. In addition, the lease must be with the lending financial institution or one of its real estate subsidiaries.
Deduction for expenses incurred in the adaptation of real estate intended for rental as a principal residence
Owners who prepare a property to be rented as a permanent residence can deduct 10% of the costs of repairs, formalization of contracts, insurance and energy certification, up to a maximum of 150 euros per property.
This incentive applies only to properties intended for rental under the regime of the Urban Leasing Law and is not compatible with the deduction for non-payment of rent insurance.
Deduction for placing on the market of housing for rental purposes
In order to promote the supply of rental housing, the Canary Islands allow a deduction of 1,000 euros for each property that is rented for the first time as a primary residence, with a maximum of five properties per taxpayer.
The dwelling must have been rented for at least three years and cannot be occupied by direct relatives up to the third degree. In the event of non-compliance with these conditions, the taxpayer must reimburse the deduction in the tax return corresponding to the year in which the non-compliance occurs.
