2025 Income Tax Campaign: Updates on Housing
April is here, and with it comes one of the most important times of the year for many: filing income tax returns. This year’s campaign begins on April 2nd and ends on June 30th for those submitting through the Renta WEB platform.
This year, the Spanish Tax Agency has introduced a few updates, including the possibility of making payments via Bizum, a move aimed at streamlining and simplifying the process. Other notable changes affect the real estate sector, which plays a key role in this tax season due to various deductions related to housing and rental properties.
Deductions for Energy Efficiency Improvements in Housing
These deductions aim to encourage energy efficiency upgrades across Spain’s housing stock, which, according to the Green Building Council España (GBCE), is in poor condition—over 80% of homes have an energy rating of E, F, or G.
These deductions apply only to owners of primary residences or properties intended for rental—and in the latter case, the home must be rented out before December 31st, 2025, to be eligible.
– Deductions for works that reduce heating and cooling demand. Taxpayers can deduct up to 20%, provided the works result in at least a 7% reduction in heating and cooling demand. The work must have been carried out between October 6th, 2021, and December 31st, 2024, with a limit of €5,000.
– Deduction for works that reduce the consumption of non-renewable primary energy. A minimum 30% reduction in non-renewable primary energy consumption is required, or alternatively, the property must achieve an A or B energy rating. Eligible upgrades—such as replacing windows or installing solar panels—must be done on a primary residence or a property intended for rental, with a 40% deduction available and a maximum cap of €7,500. These works must also have been completed between October 6th, 2021, and December 31st, 2024.
– Deduction for energy rehabilitation of residential buildings. This deduction applies only to upgrades carried out on entire buildings primarily used as residences. A deduction of up to 60% is possible, with a limit of €5,000 per year, and up to €15,000 per dwelling. The project must result in at least a 30% reduction in non-renewable primary energy consumption or an upgrade to energy class A or B.
It’s important to note that these deductions are not compatible with one another, and all must be certified with energy efficiency reports issued before and after the work is completed.
Deductions for Rental Income
Another major change this year involves new rates for deductions on rental income, which were updated in January 2024. These apply to income derived from renting out properties and are particularly relevant to rentals of primary residences.
– Deduction on rental income from properties used as the tenant’s primary residence. Starting in 2024, new reduction percentages have been introduced for positive rental income from properties intended to be the tenant’s main residence, ranging from 50% up to 90%, depending on certain conditions.
90% deduction applies to landlords who reduce rent by at least 5% compared to the previous contract in designated stressed rental markets.
70% deduction applies if the property is rented in a stressed area to young tenants between 18 and 35 years old and it’s the first time the property has been rented. If this requirement is not met, the deduction can still apply if the tenant is a public administration or non-profit entity that houses vulnerable populations, or if the property is part of a public housing program with price controls.
60% deduction applies if the property was renovated within two years before the rental contract was signed.
50% deduction applies when none of the above conditions are met.
To take advantage of these deductions, it may be helpful to check whether your property is located in a stressed rental area and if you qualify for regional tax deductions, which can also positively impact your income tax return.
Regional Tax Deductions
These deductions complement the national personal income tax (IRPF) benefits and vary depending on the taxpayer’s autonomous community.
For energy efficiency investments, the Valencian Community and Murcia offer an additional 20%, while Galicia offers 15%, with an extra 5% available if renewable energy sources or climate control devices are used in the primary residence.
For deductions on rent of primary residences, several regions also provide additional relief: Valencia and Andalusia offer 15%, Catalonia, Asturias, and Galicia offer 10%, La Rioja offers 20%, and Madrid leads with up to 30%.
