Are you planning to renovate your home in Spain?
You’re not alone.
It’s estimated that at least one in three homes in Spain needs rehabilitation.
But of the 9.7 million homes in suboptimal conditions, only 31,100 of them were rehabilitated in 2019 – that is, 0.3% of those that needed it.
Enter the Recovery, Transformation and Resilience Plan (PRTR) from Spain’s Ministry of Transport, Mobility and Urban Agency.
Have you ever heard about NextGenerationEU funds?
Well, about €3.42 billion have been set aside to fund the PRTR from 2022 until 2026 with the aim of facilitating 510,000 home renovations and rehabilitations.
In other words, the government wants to almost multiply by 10 the home renovation projects in Spain.
EU funds will foot the bill for home renovations aid for three types of properties in Spain:
- Grants and subsidies for detached homes or single-family buildings
- Grants and subsidies for multi-family buildings, apartment blocks and urbanisations
- Grants and subsidies for specific neighbourhoods
Let’s see how much the housing subsidies are, what the requirements are, and how to access NextGenerationEU funds.
What are home renovation subsidies for?
Home renovation subsidies do not finance any reform.
Which means, the subsidies are not for renovations of a purely aesthetic nature.
The official webpage outlining Spain’s PRTR explains:
“The overall objective of the actions is to reduce the consumption of non-renewable energy in homes by at least 30% and decarbonise and reduce the demand for heating and cooling by at least 7%.”
Below is a list of renovations eligible for NextGenerationEU funding in the PRTR:
- Facades and roofing: improvement of insulation and carpentry of buildings
- Change of windows
- Installation of solar and photovoltaic panels
- Aerotermia (renewable technology based on environmental energy from the air)
- Asbestos removal
- Redevelopment and improvement of the physical environment in specific neighbourhoods
- Improvement of green areas and construction of parks in specific neighbourhoods
In addition to reducing energy and heating/cooling consumption and demand, the PRTR aims to save 650,000 tons of C02 per year.
From a budget of €3.42 billion, €2.97 billion is allocated to subsidies and €450 million to personal income tax deductions (declaración de la renta, IRPF).
The government will also offer €1.1 billion in ICO guarantees/ loans.
How much are the subsidies for home renovation projects in Spain?
In principle, housing subsidies aid can be as high as:
- Up to €21,400 per home
- Between 40 and 80% of the total renovation cost
- Up to 100% of the renovation in cases of social and economic vulnerability
- Up to 100% of the cost for subcontracting a technician to complete en energy performance certificate and of technical document of improvement potential for the building or home
- Between 20 and 60% reduction of costs in your income tax return (IRPF)
But it all depends on the scope of the renovation and the energy efficiency achieved.
Below we will see how home renovation subsidies are calculated for private homes, buildings and neighbourhoods.
1. Renovation subsidies – Detached/ private homes
The PRTR plan offers subsidies to owners of detached homes or single-family buildings.
Subsidies can be applied for by owners or tenants, as well as by an agent or rehabilitation manager in charge of the work or the preparation of documents, and must be approved before work begins.
To justify the subsidy, the relevant regional authority will compare the energy efficiency certificate of the home before and after the renovation – both must be signed by a competent technician. To receive the subsidy payout, the final energy performance certificate must show the pre-approved reduction in energy consumption.
Let’s dive into the details.
Requirements
- Single-family property or ‘pluri-family’ buildings
- Habitual and permanent address of the owners or tenants who request renovation subsidies
- Minimum cost of the work must be equal to or greater than €1,000 per dwelling
Renovation objectives that can be financed
- Reduce at least 7% of the energy demand for heating and cooling
- Reduce the consumption of non-renewable primary energy by at least 30%
- The replacement of elements of the facade and roofing, such as changing windows
Amount of subsidy
- 40% of the cost of the renovation, up to €3,000
Deadline to finish the renovation
- Works must be finished within 12 months from the date of subsidy approval
- Renovation projects must be completed before June 30, 2026
You can look this government link with infographics on the requirements and subsidy amounts for private home renovations (in Spanish).
2. Renovation subsidies – apartment blocks and urbanisations
The PRTR offers renovation subsidies for owners or a community of owners in an apartment block or urbanisation.
The buildings can be of the collective residential type, detached family homes or grouped or terraced homes, linked by facades and roofing.
Subsidies can be applied for by a community of owners, a cooperative society of owners, the owners or tenants, public administrations, companies and cooperatives that are tenants or concessionaires of the buildings.
When the building is considered historical or officially protected, owners will not have to comply with the established demand reduction (see below).
Requirements
- Collective properties must have at least 50% of the built area built (excluding the ground floor) dedicated to residential use
- Collective properties must have the agreement of the community of owners – except in cases of single-owner buildings
- Homes in must have been built before 1996
Renovation objectives that can be financed
- Reduce non-renewable primary energy consumption by at least 30%
- Reduce at least 25% of the energy demand for heating and cooling in climate zone C (mainly Andalusia, Extremadura and coastal areas in Spain)
- Reduce at least 35% of the energy demand for heating and cooling in climate zones D and E (mainly the interior of Spain up to the Pyrenees – see a map of the climate zones below)
Amount of subsidy
- From 40% to 80% of renovation cost depending on energy savings (40% subsidy for energy reduction between 30-45%; 65% subsidy for reduction between 45-60%; and 80% subsidy for reduction of more than 60%)
- 100% of renovation cost in case of economic vulnerability
- Maximum cost between €6,300 and €18,000 per home (maximum of €6,300 for energy reductions between 30-45%; maximum of €11,600 for reductions between 45-60%; and maximum of €18,800 for reductions of more than 60%)
- Maximum cost between €56 and €169 per m2 per commercial premises (maximum of €56 per m2 for energy reductions between 30-45%; maximum of €104 per m2 for reductions between 45-60%; and maximum of €168 per m2 for reduction more than 60%)
- Up to €1,000 per dwelling and an additional €12,000 per building for the removal of elements such as asbestos
Deadline to finish the renovation
- Works must be finished within 26 months from the date of approval (except when interventions affect 40 or more dwellings)
- The works must be completed before June 30, 2026
You can look this government link with infographics on the requirements and subsidy amounts for apartment blocks and urbanisation renovations (in Spanish).
3. Renovation subsidies – Neighbourhoods
The PRTR plan offers renovation subsidies and grants at the neighbourhood level.
The subsidies are intended for buildings of residential use or homes in certain neighbourhoods. Therefore, the scope of renovation works must be within a Residential Environment of Programmed Rehabilitation (ERRP).
These zones are delimited by the corresponding local or regional administration.
Renovation subsidies for neighbourhoods can be granted by the autonomous communities directly to the local administrations. Likewise, the owners can let an agent or manager of the renovation apply for and receive subsidies.
Requirements
- Building or homes is within an ERRP
- At least 50% of the building area above ground (excluding the ground floor) destined for residential use
Renovation objectives that can be financed
- Reduce non-renewable primary energy consumption by at least 30%
- Reduce at least 25% of the energy demand for heating and cooling in climate zone C (mainly Andalusia, Extremadura and coastal areas in Spain)I
- Reduce at least 35% of the energy demand for heating and cooling in climate zones D and E (mainly the interior of Spain up to the Pyrenees – see a map of the climate zones below)
- Improvement of the physical environment of the ERRP
Amount of subsidy
- From 40% to 80% depending on energy reductions (40% subsidy for energy reduction between 30-45%; 65% subsidy for reductions between 45-60%; and 80% subsidy for reductions of more than 60%)
- 100% in case of economic vulnerability
- Maximum cost between €8,100 and €21,400 per home (maximum of €8,100 for energy reductions between 30-45%; maximum of €14,500 for reductions between 45-60%; and maximum of €21,400 for reductions of more than 60%)
- Maximum cost between €72 and €192 per m2 per commercial premises (maximum of €72 per m2 for energy reductions between 30-45%; maximum of €130 per m2 for reductions between 45-60%; and maximum of €192 per m2 for reduction more than 60%)
- Up to €1,000 per dwelling and an additional €12,000 per building for the removal of elements such as asbestos
- Up to €800 for “one-stop shop” type offices * Up to 15% additional for urbanization, redevelopment or improvement of the environment
Deadline to finish the renovation
- The adjudication of subsidies is estimated for the fourth quarter of 2024
- Works must be completed before June 30, 2026
You can look this government link with infographics on the requirements and subsidy amounts for neighbourhood renovations (in Spanish).
What’s the catch?
Before beginning a subsidised home renovation, you’re bound to have more questions.
Below we highlight some problems you may face when thinking about NextGenerationEU funding in Spain:
- Approval is required before starting any renovation work. Any grant funding will only be released for previously approved renovations.
- The subsidy comes after finishing the work. Yes, you read that right. You or your community of owners will have to pay for the renovation work up front. Subsidies will only be granted after completion of the work and verification of energy savings. If you don’t have the capital, see below for loans.
- Spain’s autonomous communities will not have the money until 2023. The NextGenerationEU funds are already being transferred, with €1.151 billion executed in 2021, €1.389 billion planned for 2022 and the last €430 million arriving in 2023.
- European funds are managed by your autonomous community. Each autonomous community will receive a percentage of the total with respect to the number of houses in each region. Andalusia will receive 17.37% of the total, followed by Catalonia 16.2%, Madrid 14%, the Valencian Community 10.8%, Galicia 5.8% and so on.
ICO guarantees for home renovation grants
The PRTR plan contemplates guarantees in the case of owners or communities lacking capital to pay for renovation works up front.
In other words, you can receive a loan that partially covers the works.
This line of borrowing is operated by Spain’s Official Credit Institute (ICO) and partially covers the risk of loans granted by private financial entities.
The funding available for these ICO guarantees is up to €1.1 billion from NextGenerationEU funds.
Personal income tax deductions
The PRTR plan includes tax incentives to promote housing renovation works.
The deductions in the IRPF quota are estimated as follows:
- Deduction of 20% for reducing by 7% the demand for heating and cooling of the home, where the home is habitual or intended for rent as habitual residence. Maximum deduction of €5,000 per property.
- Deduction of 40% for reducing the consumption of non-renewable energy by 30% or obtaining an A or B rating in the dwelling, where the dwelling is habitual or intended for rent as habitual residence. Maximum deduction of €7,500 per property.
- 60% deduction for reducing non-renewable energy consumption by 30% or obtaining an A or B rating in a building for residential use. Maximum deduction of €15,000 per dwelling.
You can read more about the ICO guarantees and deductions in the personal income tax fee at this link from the Ministry of Transport, Mobility and Urban Agenda.
How to access home renovation subsidies from NextGenerationEU funds?
Housing renovation grants must be requested at the department for housing of the autonomous community where your property is located.
Each autonomous community will receive EU funds according to the number of homes within the territory.
In other words, your application and any deadlines or other requirements will be set by your regional government.
In some cases, autonomous communities may choose to pay subsidies in advance after having approved the works.
Be warned, until the middle of 2022 not all the autonomous communities have reached agreement on funding procedures. Below you will find links to the calls in the autonomous communities where an official publication existed at the time of writing this article:
