Property NewsProperty Tax

Property Tax Breaks for Energy Efficiency

By November 5, 2015 No Comments

As we predicted more than two years ago when energy efficiency certificates were initiated in Spain, in the last few days the government has announced that local property taxes are to be discounted for properties with better energy ratings. The lower two ratings F and G, which is by far the majority of buildings we encounter, receive no discount nor do those of course that do not have a rating assessed as yet. We foresee that the lowest rated properties are likely to be penalised in the near future as a further incentive to upgrade the efficiency of the property (and raise money!). Owners will now be more encouraged to balance the energy and tax savings of improvements of the property against the cost of those improvements.

A good Energy Efficiency rating CEE (EPC in UK) will bring tax rebates as well as lower energy bills.  From the 1st January 2016, the central Government will instruct the rebate of property taxes – IBI – according to the following schedule.

  • Grade A – 20%
  • Grade B – 16%
  • Grade C – 12%
  • Grade D – 8%
  • Grade E – 4%

Those in Grades F or G or that haven’t already submitted a certificate will receive no rebate.

It’s only a matter of time before the lowest grades are taxed higher, so get out the calculator to work out the cost of improving the installation through double-glazing windows, permanent draft proofing, modernising old central heating boilers and air conditioning units, etc and balancing that against the lower energy bills and now lower property taxes.