Aid for housing rehabilitation: what we need to know

The aid for housing rehabilitation aims to promote the energy modernization and accessibility of private properties, residential buildings, and neighborhoods. They are offered by the Government of Spain through the autonomous communities and are financed with the Next Generation funds of the European Union.

But what works are contemplated within the Recovery, Transformation, and Resilience Plan (PRTR)? How are they declared and taxed? We want to answer these two questions and many others next.

What are the energy efficiency works?

• Reduce primary non-renewable energy consumption by 30%.
• Decrease carbon dioxide (CO₂) emissions by 650,000 tons per year.
• Address energy poverty.
• Decarbonize air conditioning systems and reduce their demand.

Without a doubt, this is an ambitious plan that aims to encompass about 510,000 rehabilitation actions before 2026. This is the reason why it offers aid of up to 21,400 euros per home. An amount that can cover between 40% and 80% of the cost of the works. The percentage can reach 100% in cases of social and economic vulnerability.

But what kind of works are we talking about exactly? Let's see them:

• Replacement of windows and enclosures in homes to improve their insulation.
• Installation of solar and photovoltaic panels to reduce electricity demand.
• Changes in facades and roofs that also aim to increase the thermal insulation of the property.
• Installation of aerothermal equipment in homes.
• Improvements in accessibility.

How are aids for housing rehabilitation taxed?

The PRTR has a budget allocation of 3.420 million euros. Of this amount, 2.970 million euros will be granted in the form of subsidies, while the remaining 450 million euros will be income tax deductions. Additionally, a further 1.100 million euros in guarantees from the Official Credit Institute (ICO) is planned to be made available to users.

In any case, there is nothing we need to worry about in terms of taxation. This is mainly because Royal Decree-Law 19/2021, of October 5, on urgent measures to promote the activity of building rehabilitation in the context of the PRTR, specifies that the amount of the aid will not be subject to personal income tax (IRPF).

Furthermore, the exemption from taxing the aid received through direct subsidies is indefinite. That is to say, it will remain in force until the end of the PRTR in 2026, unless a new regulation states otherwise.

What we will have to pay with the amount of the aid for housing rehabilitation is the value-added tax (VAT) of the products purchased and the services contracted. However, it is worth remembering that the amount of the subsidies is paid afterwards.

This means that it will be the user who must contract and carry out the works in order to later request the aid from the corresponding authority in their autonomous community of residence. This body will be responsible for evaluating their request and proceeding with the payment of the subsidy if applicable.

That said, and continuing within the realm of aid for housing rehabilitation, we want to make a recommendation. In the article Reforming houses under energy-saving criteria: the importance of controlled mechanical ventilation, we discuss how this type of system, which is also subsidizable, can help us achieve more efficient homes.