These are the housing measures proposed by the tax reform of the three Basque municipalities

The municipalities of Álava, Bizkaia and Gipuzkoa have proposed a new set of personal income tax benefits for encourage rent in the Basque Autonomous Community. These reforms, included in the budget review, aim to facilitate access to housing, especially for vulnerable groups such as young people, single-parent families, people with disabilities and victims of gender violence.

In the field of rentthe new bonuses want to make the supply of rental properties for regular living more attractive, allowing owners to buy these properties 30% bonus on the returns achieved. In addition, they will be able to deduct interest on invested foreign capital and insurance premiums to cover possible non-payment of rent, a benefit intended to give owners more stability and promote the availability of rental housing.

Strengthening cooperation in public housing programsthe municipalities propose that homes offered for rent through regional, provincial or municipal housing plans receive a higher bonus, reaching 50%. The initiative also includes an additional incentive for owners in areas with high demand for housing “stressed markets”. In this case, landlords who rent a property for the first time, or after a period of five years of not doing so, receive a 50% bonus on the return.

On the other hand, the reform also sets specific conditions for tourist and seasonal rentals. In this case the bonus is limited to 20% on the return achieved by each property, including the deduction of interest on the invested capital.

With regard to the tenantsthis is what the Basque councils strive for retention of the 20% deduction on the total amount paid for renting a habitual residence, with a limit of 1,600 euros per year. However, the groups cwith greater social vulnerabilitysuch as young people under the age of 36, large families, people with a disability of more than 65% and victims of gender violence, would see this deduction expanded up to 35%with a limit of 2800 euros per year.

In addition to rental incentives, the councils aim to bbenefits for the purchase of a habitual residence. Taxpayers under the age of 36 can benefit from an unlimited deduction in the first year after purchasing their home. removing the limit of 8,500 euros valid until now. It is proposed to promote saving for the purchase of a home extend the period to use the deposited money on the housing bills, what would happen from six to ten yearsand increasing the deduction from 18% to 23%. In addition, donations from family members intended for the purchase of a habitual residence would be exempt of the Inheritance and gift taxwithin certain limits. However, the reform stipulates that the application of the deduction requires that the taxpayer’s income does not exceed the limit 85,000 euros; Nowadays, the home deduction has a universal character and all taxpayers can benefit from the deduction, without income limits.

Finally, the reform includes a deduction for renovation of rental propertiesallowing owners carrying out renovation work, for example in relation to accessibility, to deduct a percentage of the costs as long as the property is used as a main residence.