B Law & Tax
25 April 2023

Tax Advisor: Deductions for the purchase of homes in Asturias, Castilla-La Mancha and Extremadura

The annual 2022 Personal Income Tax return campaign has started and, as every year, there are novelties that taxpayers should look out for. One of the outstanding issues is housing, as there are deductions for both renting and buying, although the latter are more limited and are the sole responsibility of the different autonomous communities.

As of 2013, the tax deduction for the purchase of habitual residence was eliminated, which means that those who acquired a home after that date are not entitled to any deduction by the State. However, if a taxpayer has paid amounts for a home they purchased before 2013, they will be able to deduct 15% of those amounts in 2022, with a maximum deduction base of €9,040. For the deduction to be valid, one must live permanently in such house the 12 months following the acquisition of the home; renting is not subject to the aforementioned deductions.

New regional deductions

Asturias has established a new form of discount for the purchase or renovation of a habitual residence, as long as it is located in a municipality in danger of depopulation..

The Canary Islands has increased the amount of deduction available for investment in a habitual residence to 5%, which represents an increase from the current percentage of 3.5%. This increase will apply to those taxpayers whose income does not exceed €16,500. In the case of those whose income exceeds this amount, but does not reach 33,000 euros, the deduction will remain at 3.5%.

Castilla-La Mancha has incorporated a new deduction for those young people who have applied for financing to acquire a home, allowing the interest on these loans to be deducted if the young person is under 40 years of age.

– In Extremadura, taxpayers will be able to deduct 10% of the property if they acquire it in a municipality with less than 3,000 inhabitants. There is also a deduction on interest on home loans with the limit of 1,000 euros per year.

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