Renovating a home can have tax advantages if energy efficiency is improved. Many property owners are not clear about how much they can deduct or what conditions they must meet.

What deductions can be applied when renovating a home

Income tax deductions are focused on renovations that reduce energy consumption. Depending on the result of the work, it is possible to deduct between 20% and 60% of the investment.

It is not about any renovation. For it to be valid, the property must improve its energy efficiency, something that is accredited with certificates before and after the work. Without this requirement, the deduction cannot be applied.

A common doubt is whether it is worth renovating only for the deduction. In most cases, the tax benefit is support, but the important thing is the impact that the renovation has on the value and use of the property.

What conditions must be met to be able to deduct

To apply these deductions, the property must be a primary residence or be intended for rental. If it is a property as an investment, it is necessary that it be rented within the deadlines established.

It is also mandatory to justify the renovation with invoices and registered payments. In addition, there are limits on the amount that can be deducted each year.

Another important point is that aesthetic improvements are not included within these aids. Only renovations that directly affect the energy consumption of the property are considered.

How it can influence owners in Costa Blanca, Torrevieja and Mar Menor

In areas such as Torrevieja, Orihuela Costa, Pilar de la Horadada or Mar Menor, many properties are purchased with the objective of rental or investment. In this context, renovation can be a tool to improve profitability.

A renovated property, with better energy efficiency, usually has more demand in the market and makes both rental and sale easier. In addition, it allows adjusting the price to current demand.

For this reason, before renovating, it is key to analyse whether the investment makes sense depending on the area and the type of property. At Munfort we work with owners and investors to assess each case and understand how a renovation can influence the performance of the property within the current market.