Filing your tax return isn't just about adding up income and withholdings; it's also an opportunity to adjust your tax payments to reflect what you're owed. This year, state deductions for housing, energy efficiency, electric vehicles, and donations offer some relief. However, when we delve into regional deductions, the possibilities multiply. And what seems applicable at first glance may not apply if every single requirement isn't met.
The deductions applicable to the 2024 Personal Income Tax (IRPF) can be divided into two main categories: those granted by the State, which are generally applicable, and those with a local focus, regulated by the Autonomous Communities for their residents. And although the common goal is to reduce the tax burden, the ways to achieve this are numerous, specific, and—often—short-lived.
> State deductions in Personal Income Tax 2024: a complete map of tax opportunities
The national Personal Income Tax (IRPF) framework includes a set of deductions that can significantly reduce the tax liability, provided the established legal requirements are met. Some of these deductions are based on personal circumstances (residence, family, disability); others are designed to encourage investment, energy efficiency, or property preservation. We have grouped them into categories here to facilitate their understanding and application.
Housing-related deductions
- Deduction for investment in main residence (transitional regime)
For those who acquired their main residence before January 1, 2013, and were already claiming this deduction. The right to the deduction is maintained if it has not been interrupted and the property continues to be their main residence. The deduction is 15% of a maximum of €9,040, shared between the national and regional levels.
- Deduction for rent of main residence (transitional regime)
Applicable only if the contract predates January 1, 2015, and was already in effect. It allows a deduction of 10.05% of the amounts paid, up to a limit on the taxable income.
- Deductions for energy efficiency improvement works in homes
It includes three sections:
- 20% for reduction of heating and cooling demand (min. 7%).
- 40% for improvement in non-renewable primary energy consumption (min. 30%) or if energy rating A or B is achieved.
- 60% for the comprehensive renovation of predominantly residential buildings.
Energy performance certificates are required before and after the work.
Sustainability and efficient mobility
- Tax deductions for the purchase of "plug-in" electric vehicles and fuel cell vehicles and charging points
A 15% tax deduction is available on the amount paid for the purchase of new electric vehicles (depending on price, payment method, registration, etc.). This also applies to the installation of charging points in residential properties. Maximum applicable limits apply.
Donations, patronage and heritage conservation
- Deductions for donations and other contributions
Up to 80% on the first €250 donated to entities covered by Law 49/2002. The remainder can be deducted at 40% (or 45% if loyalty requirements are met).
Total limit: 10% of taxable income.
- Tax deduction for actions for the protection and dissemination of Spanish Historical Heritage and World Heritage
A 15% deduction on the amounts invested in conservation, restoration, rehabilitation or dissemination of the declared heritage, within the terms established by the Ministry of Culture.
Deductions based on residence and geographical area
- Deduction for income obtained in Ceuta or Melilla
Applicable to taxpayers with income generated in these territories, with a 60% bonus on the state and regional portion of the tax.
- Deduction for habitual and effective residence on the island of La Palma during the 2024 financial year
This exceptional 60% deduction is maintained as support for those affected by the volcanic eruption, provided that the taxpayer has their habitual and effective residence on the island throughout the year 2024.
- Deduction applicable to family units formed by tax residents in EU Member States or the European Economic Area
This applies when one or more members of the family unit reside outside of Spain in an EU or EEA member state with effective exchange of tax information. It allows for the application of certain benefits as if all members resided in Spain, under certain conditions.
Stimulation of business investment
- Tax deduction for investment in newly created or recently established companies
Taxpayers who subscribe to shares or stakes in newly created or recently established companies or who, in addition to the temporary contribution to capital, contribute business or professional knowledge suitable for the development of the company in which they invest can deduct 50% of the amounts invested, with the maximum deduction base being: 100,000 euros per year.
- Deductions for incentives and stimuli for business investment in economic activities under direct estimation
These include, among others, deductions for investment in R&D&I, job creation, vocational training, export of films and shows, and environmental protection. Some of these deductions are also applicable to the self-employed.
- Deductions for incentives and stimuli for business investment in economic activities under objective estimation
Certain activities subject to simplified tax regimes (objective estimation) may qualify for specific incentives, such as reductions for maintaining employment or environmental investments. These are limited to certain sectors and have a specific regulatory basis.
- Important: Investments made during the year by entities under the income attribution regime (civil partnerships that are not subject to Corporation Tax, dormant estates, joint ownership communities, etc.) that determine their net income in direct estimation, in either of its two modalities, may be subject to deduction by each of the partners, heirs, joint owners or participants in proportion to their participation in the result of the entity.
For more information on all state deductions currently in force in the 2024 tax year, as set out in the Personal Income Tax regulations, see this link from the Spanish Tax Agency (AEAT).
> Regional tax deductions: a nuanced tax map
Each Autonomous Community has deployed its own range of deductions: for the birth or adoption of children, care of the elderly, housing rental, young self-employment, ecological investments… The diversity is great, and so are the conditions.
- Attention. You can only claim regional tax deductions from the region where you resided for the most days in 2024. And, under no circumstances, can a regional tax deduction compensate for a shortfall in the national tax liability (or vice versa).
You can consult the updated details by region here: Official guide to regional tax deductions 2024 – AEAT
Remember…
- Not all deductions are cumulative, nor do they allow carryovers. Read the fine print.
- You don't need to submit supporting documents with your tax return, but you should keep them. The Spanish Tax Agency (AEAT) may request them later.
- Deductions do not generate a negative tax liability. If there is insufficient tax liability, they are simply not applied (nor carried forward to subsequent tax years, except in cases such as energy efficiency).
- Some deductions expire, others are extinguished due to regulatory changes or subsequent non-compliance. If you have any doubts, review the details or consult the relevant authority.
Beyond the list of percentages and items, deductions offer an opportunity to align your tax payments with your actual expenses. But like any tax opportunity, it requires knowledge, rigor, and foresight. It's not enough to know what you can deduct: you need to know how, when, and in what proportion. And that, sometimes, makes the difference between an optimized tax return and one that's overlooked.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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