Tax returns, tax relief and housing
It’s that time of year again in Spain when we start to think about our annual tax return and start looking for all the paperwork from last year to present our return to the local Tax office.
There are still tax benefits for home owners where for the purchase or renovation of any habitual residence, it is possible to deduct up to 15% up to a maximum of €9,015.19.
Better still if there is mortgage over the property where, for the first two years, this figures increases to 25% for the first €4,507.59 and 15% for the remainder up to the allowance of €9,015.18.
However, proposed reforms to the IRPF (Personal Income Tax) will mean a substantial reduction in these allowances which could see the 25% allowance during the first two years disappear completely. Good news is that this will only only be applicable from 2007 so it won’t come into force until the tax returns of 2008.
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