La Renta: What can you deduct as Expenses?

2024 Spanish Tax Deductions: What Can You Claim on Your Declaration?

Explore the allowable deductions on your 2024 Spanish tax return, also known as ‘declaración de la renta’. Completing this return can be challenging, especially with regional variations affecting what expenses are deductible.

Individuals residing in Spain for over 183 days annually and earning more than €22,000, as well as self-employed persons or recent residents, are required to file. The deadline for the 2023 tax year is July 1st.
Your declaration may include various deductions such as those for couples, mothers, children, single parents, elderly dependents, individuals with disabilities, and large families. This guide particularly addresses deductible expenses. For instance, are you able to deduct costs related to rent, mortgage, property taxes, or private health expenses?

Spanish Pension Contributions

Contributions to pension plans may be deducted up to €1,500, a decrease from the previous €2,000 limit, following recent governmental adjustments. If your employer contributes, the total deductible amount could reach €10,000 or 30% of your net employment income.

Property Tax

Property owners in Spain are subject to the annual Impuesto Sobre Bienes Inmuebles (IBI). Income generated from property rentals is deductible, but personal residence costs are not.

Renovation Costs

Only renovations that decrease heating and cooling demands by at least 7% qualify for a 20% tax deduction, capped at €5,000. Cosmetic improvements are excluded.

Home Purchase or Rental Costs

Deductions for home purchases are reserved for properties acquired and mortgages signed before January 1st, 2013, and previously reported in tax declarations. The tax benefit is up to 15% with a ceiling of €9,040, whereas the maximum deduction stands at €1,356. Rental deductions apply under certain conditions, including contracts signed before January 1st, 2015. Additional deductions may be available for purchasing homes in rural or depopulation-risk areas, with specific provisions for vulnerable groups.

Donations

ax deductions are available for various donations, including those to charities, cultural, scientific, and environmental organizations. Generally, 80% of the first €150 and 35% of subsequent amounts are deductible. Verification with a tax professional is recommended.

Investments in New Companies

Significant changes include an increased deduction cap from €60,000 to €100,000 and a raised deduction rate from 30% to 50%, applicable to investments held between three and twelve years without exceeding 40% share capital.

Educational Expenses

Deductions may cover 15% of school fees, 10% of language courses, and 5% of school-specific clothing. Restrictions apply.

Environmental Investments

Certain regions offer deductions for investments in environmentally-friendly installations. Conditions vary, so consultation with a tax professional is advised. Domestic Help Deductions for domestic help expenses are available in selected regions, including Madrid and Andalusia.

Electric Vehicles

A new deduction for electric vehicle purchases was introduced in 2023, with a 15% deduction applicable on a base cost up to €20,000.

Relocation for Employment

Introduced in 2020, this deduction allows a €2,000 reduction in your tax base if relocating for work, applicable for two years post-move.

Regional Variations

Distinctive deductions include health-related expenses in the Canary Islands, Cantabria, and Valencia, legal expenses in Andalusia, and public transport costs in Aragón and Asturias.

For a complete breakdown of what you can claim for and deduct from your ‘La Renta’ contact us.