Deductions for habitual residence

The habitual residence of the taxpayer is a term that the Tax Agency defined as that home that completes the requirements shown below:

That the home constitutes the habitual residence for a period of at least 3 years.

Similarly, the home continues to have a "usual" character when, despite the fact that the term has not fully elapsed, the unfortunate death of the taxpayer occurs or circumstances occur that necessarily require a change of address, such as job transfer , obtaining the first job, change of employment, marriage, marital separation, etc.

That housing is occupied within a period of 12 months, counting from the date of acquisition of the property or completion of construction.

The home will not lose its habitual character in the following situations:

In the event that the taxpayer dies or when circumstances occur that prevent the occupation of the property.

If, for employment reasons, the taxpayer enjoys a habitual residence and the acquired dwelling is not used. When the above exceptions are applicable, the deduction that will be made for the acquisition of the property will be started at the time that the specific circumstances arise so that a change of housing is required or prevent the occupation of this in some way.

In the event that there is a plurality of dwellings, it will be defined as usual one in which the taxpayer resides for a period greater than 183 days a year.

It is considered that a taxpayer according to what the personal income tax establishes, will officially have their habitual residence in Spain when they incur this circumstance, which are shown below:

That it is established for more than 183 days, of a calendar year, in Spanish territory, it should be noted that it is not necessary that the 183 days be completed consecutively, this means that they can be alternated without inconvenience, as long as they are computed independently on an annual basis.

For the computation and recording of the period that they remained in Spanish territory, those temporary stays in Spain that have their origin in obligations established by humanitarian or social collaboration agreements, free of charge, with the Spanish Public Administrations will not be counted.

For the territories that are classified as tax havens, the Tax Administration will have the ability to demand proof of permanence in them for the same 183 days of the year.

La deduction by acquisition

In terms of the habitual residence for personal income tax it is one of the most important tax benefits that a family can benefit from, even if the property has been purchased from January 2013 the benefits change.

Rent News

Not only can this transaction be formalized on paper, it can also be obtained with the Renta WEB application, since the legislative changes of the tax reform have taken shape and complete structuring for the presentation of the return. That with it we will pay less, obviously not in all cases equally, because despite the fact that some rates have been lowered and improved, some minimum requirements. Many deductions have also been modified that sometimes have a significant tax impact.

Changes made to pay more

This year the general reduction of 2.652 euros disappeared, obtained from work income, whatever the positive balance, and any amount equivalent to other income received. In order to change this, a Deductible expense for the amount of 2.000 euros referred to as other expenses. These costs may be compensated or forgiven in two cases: the first is when unfortunately you are unemployed and get a job that requires a change of home, these costs rising by 2.000 euros per year.

The second supposed case is when an active worker with a disability will increase the amount from 3.500 euros to 7.750 euros per year in the case of active workers, according to their degree of disability.

The exemption for dividends. These were exempt fully of the limit of 1.500 euros per year, as well as all the participations in benefits obtained from owning shares in any entity. This exemption has been abolished since 2015. To the dividends A withholding is applied to them now when you collect them, with this, the change can be seen in that, if in past years they used to return these advance payments, it is no longer the case.

All positive returns that are obtained in kind are taxable, with only two exceptions: the amounts allocated to staff training and insurance for civil liability in the professional work of a worker.

Added to this, the possibilities of deduce you through pension plans they have been reduced in recent years, since the limits that have been imposed are less than 8.000 euros per year for all taxpayers in general. The limit previously set at 10.000 euros has been modified, and that for people over 50 years old 12.500.

The taxation imposed on rent also worsens, for both the landlord and the tenant. For the landlord, a one-time reduction of 60% of the income derived from the rental of houses is set. For the tenant, the deduction for rent will be lost for all signed contracts, as in the purchase of real estate, this relief that used to be advantageous is lost.

Changes made to pay less

The main improvement besides the reduction of tax rates, is that the minimum of the taxpayer will rise from 5.150 to 5.550 euros. In turn, the amounts are raised with reference to the age of the taxpayer. In this way, when the taxpayer has reached an age greater than 65 years, the amount of the minimum will be increased by 1.150 euros per year.

When the taxpayer has reached an age greater than 75 years, the amount of the minimum will amount to 1.400 euros per year. Going from 7.191 to 8.100 euros with the reform.

He also ascended the minimum by lineage o offspring. For the first child, it goes from only 1.836 euros to 2.400 euros. For the second child it goes from 2.040 euros to 2.700 euros, for the third child, it goes from 3.672 euros to 4.000 euros, and for the fourth and subsequent children, it goes from 4.182 euros to 4.500 euros. When the assumption descendant is less than three years old, the amount will increase by 2.800 euros per year.

Modalities to make the deduction for the investment in the habitual residence

• Construction of the habitual residence: all those expenses that come from the execution of the works or amounts delivered to the architect, establishing a maximum term of 4 years from when the investment is made.
• Acquisition or remodeling of the main residence: home ownership.
• Works or adaptation for people with disabilities, with a limit imposed of 12.080 euros per year. In this particular case, 20% of the cost can be deducted, which is divided into a state and regional part.
• Extension of the habitual residence: increase of the permanently built area.
• Investment in account of the habitual residence, as long as this investment is destined to the first acquisition or remodeling of the house. provided that the investment has been made for a maximum term of 4 years.

Although the deduction for habitual residence disappeared since January 1, 2013, there are still many taxpayers who continue to benefit from it. And they are all those who acquired it before January 2013, establishing as of this date, a temporary regime, regulated in the eighteenth transitory provision in the Personal Income Tax Law, which allows taxpayers to continue enjoying the various types of deduction in the same conditions and terms of December 31, 2012.

The transitional regime to whom it applied

After January 2013 they only had the right to apply the deduction for investment in your home for the amounts paid in the period in question, the following taxpayers:

• All those taxpayers who have acquired the habitual residence or delegated amounts for the construction of this, prior to January 1, 2013.
• Those taxpayers who in some way had delegated amounts prior to January 1, 2013 for remodeling or expansion works of the property, as long as the works have been completed before January 1, 2017.
• Taxpayers who delegate amounts to carry out works to adapt the home of a person with a disability, as in the previous case that they have prior to January 1, 2013, and as long as the aforementioned works are concluded before January 1, 2017.

In order to successfully apply the transitional regime for the deduction, All taxpayers are asked to have applied the deduction for said home in 2012 or other previous years, except for the situation, that they have not been able to apply it to this day, because the amount that has been invested in it, most likely has not exceeded the exempt amount for reinvestment.