If you are considering renovating your home or business to improve energy consumption, it is important to be aware of the tax benefits available. Tax deductions for energy efficiency works provide a great opportunity to reduce your tax burden while enhancing the comfort and energy performance of your property.

In this guide, we explain what these deductions are, who can benefit from them, and the requirements you must meet to qualify.

What are tax deductions for energy efficiency works?

Tax deductions for energy efficiency works are incentives applicable in income tax declarations for individuals who carry out renovations aimed at reducing energy consumption in homes and buildings.

These deductions are designed to encourage investment in improvements such as:

  • Thermal insulation for façades, roofs, and floors.
  • Replacement of windows with double or triple glazing models.
  • Installation of renewable energy systems, such as solar panels or aerothermal technology.
  • Modernisation of heating and air conditioning systems.
  • Upgrading lighting systems to LED technology.

Who can benefit from these deductions?

These tax benefits are available for:

  • Homeowners carrying out renovations in their primary residence.
  • Resident associations improving energy efficiency in communal areas.
  • Businesses and self-employed individuals upgrading their facilities to reduce energy consumption.
  • Tenants, provided they bear the cost of the works and meet the requirements.

Requirements to qualify for the deductions

To apply tax deductions for energy efficiency works, the renovations must meet specific criteria:

  • Reduce primary non-renewable energy consumption by at least 30%.
  • Improve the energy rating of the property.
  • Obtain an energy performance certificate before and after the renovation.
  • Provide proof of expenses through invoices, contracts, and payment receipts.

The deduction percentage varies depending on the level of energy efficiency improvement, reaching up to 60% of the expenses incurred.

Income tax deductions for energy efficiency works

Currently, there are three types of tax deductions for energy efficiency works in income tax declarations:

20% Deduction for basic improvements

  • Condition: Reduction of at least 7% in heating and cooling demand.
  • Maximum limit: €5,000 per property.
  • Example: Window replacement, installation of thermal insulation.

40% Deduction for greater energy efficiency

  • Condition: Reduction of 30% in non-renewable primary energy consumption.
  • Maximum limit: €7,500 per property.
  • Example: Installation of renewable energy systems, aerothermal heating.

60% Deduction for energy rehabilitation of buildings

  • Condition: Improvement of the building’s energy rating by at least two levels.
  • Maximum limit: €15,000 per property.
  • Example: Complete façade renovation, modernisation of heating and cooling systems.

How to apply for the deductions

To claim tax deductions for energy efficiency works, follow these steps:

  1. Plan the renovation, ensuring it meets the required criteria.
  2. Obtain an energy performance certificate before and after the works.
  3. Gather all necessary documentation: invoices, contracts, and proof of payment.
  4. Include the deduction in your income tax return, providing the required certificates.

Additional benefits of energy efficiency renovations

Beyond tax savings, investing in energy efficiency offers multiple advantages:

  • Lower electricity and gas bills.
  • Greater thermal comfort in your home or business.
  • Increased property value.
  • Reduced environmental impact.

Common mistakes when applying for these deductions

  • Not obtaining the required energy performance certificate before and after the renovation.
  • Paying in cash, as only bank payments are valid.
  • Failing to ensure that the works meet the required energy savings threshold.

Frequently asked questions

Can I apply for the deduction if the work has already started?

Yes, as long as you obtain the energy performance certificate before and after the renovation.

Are renovations in second homes eligible for deductions?

No, these deductions apply only to primary residences and collective-use buildings.

What documents do I need to submit with my tax return?

Invoices, contract agreements, proof of payment, and energy performance certificates.

Are there additional grants available?

Yes, some regional governments offer complementary subsidies.

How much can I save with these deductions?

Depending on the investment and applicable deduction rate, you could save anywhere from a few hundred to several thousand euros in taxes.

Our opinion

Tax deductions for energy efficiency works are an excellent opportunity to reduce your tax burden while improving your home or business’s energy performance. With proper planning and compliance with the requirements, you can make the most of these tax benefits.

If you need advice on how to apply these deductions to your renovation project, La Quinta Fachada Arquitectura can help you design an efficient and cost-effective solution.