Homeowners in Spain could save thousands in 2026 thanks to extended tax deductions for energy-efficient renovations.
Credit : Freepik

For homeowners thinking about upgrading their property, 2026 could be the right year to finally take the plunge. A tax incentive that was due to expire has been given a last-minute extension, allowing thousands of property owners to deduct up to €3,000 from their income tax – simply by making their homes more energy efficient.

The decision, approved in December and published in the Official State Gazette, extends the deductions for energy-efficiency renovation works well into 2026. For residential buildings, the deadline stretches even further, until the end of 2027.

At a time when energy bills remain a concern for many households, the measure is being seen as both financial relief and a push towards greener homes.

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Who can benefit from the 2026 tax deduction?

The tax break is aimed at homeowners who carry out renovation works that reduce energy consumption. It applies to main residences, second homes used personally, and – in some cases – entire residential buildings.

To qualify, the works must achieve real and measurable improvements, not cosmetic changes. In practice, this means lowering non-renewable energy use or significantly improving the home’s energy rating.

Crucially, homeowners must be able to prove the improvement. This is done through energy efficiency certificates, issued by a qualified technician, one before the works begin and another once they are completed. The initial certificate can be up to two years old, but both are mandatory.

What renovations actually count as energy rehabilitation?

Not every renovation will open the door to a tax deduction. The government has set clear thresholds to ensure the money goes towards genuine energy improvements.

Eligible works are those that:

  • Reduce non-renewable primary energy consumption by at least 30 per cent, or
  • Improve the property’s energy rating to class A or B on the official scale.

In practical terms, this includes insulation upgrades, replacement of windows, heating system improvements, renewable energy installations, or comprehensive refurbishments that cut energy demand.

Small improvements can qualify too, but the level of tax relief depends on how much energy saving is achieved.

How much can homeowners deduct in 2026?

Rather than a single flat-rate benefit, the system is structured around three levels, depending on the scope of the renovation.

Basic level – up to €1,000

For modest works that reduce heating and cooling demand by at least 7 per cent, homeowners can deduct 20 per cent of the amount spent, up to a maximum annual base of €5,000. This translates into a maximum real deduction of €1,000.

Intermediate level – up to €3,000

This is where the most attractive savings appear for individual homeowners. If the renovation cuts non-renewable energy use by 30% or improves the energy rating to A or B, the deduction rises to 40 per cent, with an annual base of €7,500. The result: up to €3,000 off your tax bill.

Maximum level – up to €3,000 per year (and more over time)

Designed for entire buildings or blocks of flats, this level allows each owner to deduct 60 per cent of their share of the renovation cost, with a maximum annual deduction of €3,000.

There is an added bonus here. If the renovation is particularly expensive, any unused deduction can be carried forward for up to four additional tax years, with a total cumulative base of €15,000. That means up to €9,000 in deductions spread over several years.

Important limits and conditions to keep in mind

While the scheme is generous, it is not without restrictions.

Only one type of deduction can be applied to the same renovation work, meaning you cannot combine levels. Any amounts already covered by public grants or subsidies must be deducted from the base before calculating the tax benefit.

Payment methods also matter. To qualify, all expenses must be paid by bank transfer, card, cheque or bank deposit. Cash payments do not count, no matter how legitimate the work itself may be.

Finally, documentation is key. Invoices, certificates and proof of payment must all be kept in case the tax authorities request verification.

Why this matters for 2026 homeowners

With the extension now confirmed, 2026 becomes a final window of opportunity for many homeowners to combine renovation plans with real tax savings. Beyond the immediate financial benefit, the works can also increase property value, improve comfort and reduce long-term energy costs.

For those already considering upgrades, the message is clear: doing the work properly – and on time – could pay off far beyond lower energy bills.

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