La Renta: Deductable Items!

What items can you deduct on your Spanish tax return?

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

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 June 30th for the preceding year, in this case for 2022.

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. There are also several new changes to the tax return this year, which you can find out here.

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.

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 has changed it for this year.

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 and rent it out, then this is one of the expenses you can claim back on your annual declaration.

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.

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. In the case of those who are renting, the signing of the contract must have been made before January 1st, 2015.

The tax benefit is up to 15 percent with a maximum limit of €9,040, while the maximum deduction will be €1,356.

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.

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.

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.

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. Unfortunately, these are not included for Madrid or Catalonia.

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 (some regions only)

Those who make an investment in buying an electric car may also be able to deduct the cost of this, depending on where they live. This is true if you live in Valencia, La Rioja and Castilla y León.

Standout regional differences

The Canary Islands and Cantabria are the only two regions that allow you to deduct private health insurance and other health-related expenses if you are employed, but make sure you contact your gestor to find out exactly which health costs can be claimed. If you are self-employed, however, you may be able to deduct private health insurance in other regions too. Check with your gestor to find out.

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