Tax credit for primary housing

As of 2013, the deduction for investment in primary housing has been eliminated. This deduction was approximately 15% (depending on the autonomous community) of the amounts paid during the corresponding tax period for the acquisition or rehabilitation of properties that constituted or were to constitute the taxpayer's main home. A transitional regime was established under which the following taxpayers continued to have the right to the deduction:

• Taxpayers who had purchased their main home before January 1, 2013 or who had paid amounts prior to that date for its construction.
• Taxpayers who had paid amounts prior to January 1, 2013 for rehabilitation or expansion of their main home, provided that the works were completed before January 1, 2017.
• Taxpayers who had paid amounts prior to January 1, 2013 for works and installations to adapt the main home of people with disabilities, provided that the works or installations were completed before January 1, 2017.

The taxpayer may apply this deduction for the amounts paid in a tax period for the acquisition or construction of real estate and accrued before January 1, 2013, unless Article 68.1.2 of the Personal Income Tax Act in force on December 31, 2012 applies. This rule refers to cases in which a regular home has been purchased and the deduction has previously been applied for the purchase of other regular homes.

For taxpayers covered by the transitional regime, the deduction for regular housing applies in accordance with the law in force as of December 31, 2012.

Tax credits applicable to taxpayers of personal income tax who carry out business activities

Personal income tax taxpayers who carry out business activities can apply the tax deductions available to corporate tax taxpayers for the promotion of certain activities, except for the deduction for research and development (R&D) and technological innovation. In addition, they can even get a tax refund for these activities.

For information on the tax credits established for IS taxpayers, see the IS reliefs in the “Tax Credits and Incentives” section.

Tax relief for investment in shares of new or recently created companies and tax exemption for reinvestment of the same

In Spain, a tax relief is provided for the amounts invested during the tax period in the subscription of shares of new or recently created companies that meet certain requirements. This bonus is applied to the State's part of the personal income tax contribution and consists of a 50% deduction. The taxable base for this relief is the purchase value of the shares, with an annual limit of 100,000 euros.

Capital gains generated by the sale of shares for which the taxpayer has applied the above-mentioned deduction will be exempt from paying personal income tax if the total amount obtained from the sale is reinvested in the acquisition of shares in new or recently created companies, provided that certain requirements are met.

When taxpayers sell shares in new or recently created companies and choose to apply the reinvestment tax exemption, only the part of the reinvestment that exceeds the total amount obtained from the sale will constitute the deduction base for the new shares.

Tax deduction for contributions and contributions to political parties

A tax credit is established for quotas and contributions made to political parties. The tax credit amounts to 20% of the fees or contributions paid, with a limit of 600 euros based on the tax credit.

Tax bonus for large families and dependent ascendants or descendants

Taxpayers who work away from home and have dependants or descendants, or who are part of a large family, can apply a deduction of 1,200 euros for each of these situations. This deduction is compatible with the current maternity deduction.

The deduction can be increased up to 600 euros for each child in a large family that exceeds the minimum number required to be considered a large family.

Temporary tax deductions for energy efficiency improvement works in homes

Temporary tax deductions for energy efficiency improvement works in homes are available to taxpayers of Personal Income Tax for the amounts invested in rehabilitation works that contribute to achieving certain improvements in the energy efficiency of:

• The usual home.
• Housing leased for use as housing in accordance with urban leasing legislation, provided that its main purpose is to meet the tenant's permanent housing needs.
• Residential buildings.

These improvements must be accredited by an energy efficiency certificate.

Charitable Donations

Tax deductions may apply for donations to non-profit organizations that meet certain requirements. The tax credits applicable to these donations vary between 40% and other percentages that depend mainly on the receiving organization. The deduction is applied according to the following scale:

The basis for this deduction may not exceed 10% of the taxpayer's taxable Personal Income Tax base, except in the case of donations to listed priority sponsorship activities, where the limit will be 15% of the taxpayer's taxable Personal Income Tax base.

When donations are made to legally recognized foundations that depend on a board of trustees (protectorate) and to associations declared of public utility not included in the regime provided for in Law 49/2002, the deduction may amount to 10%.

Tax credit for renting a regular home

The deduction for renting a regular home is eliminated with effect from 2015. A transitional regime is established for taxpayers who signed a lease agreement and paid their rent before January 1, 2015, provided that they were entitled to apply this deduction for the same main home during a previous tax period.