Spain allows taxpayers to get an income tax deduction of between €1,150 and €2,550 per year if they share a home with a parent or grandparent over the age of 65. These are the requirements and other key information.
The Spanish government has a tax break available for those living with the elderly person at home.
Spain’s treasury recognises this with a significant tax benefit known as the Mínimo por Ascendientes, which is deductible from income tax (IRPF in Spain).
You can find the official government information on Mínimo por Ascendientes from the hacienda here, and The Local has broken down what you need to know below.
READ ALSO: IRPF – What you need to know about income tax in Spain
What is it?
This Mínimo por Ascendientes deduction seeks to alleviate the financial burden on taxpayers who live with their parents or grandparents and can result in savings of between €1,150 and €2,550 per person, depending on the circumstances.
It’s not a bank transfer or state benefit, but rather an amount that is deducted from your income before calculating your tax and submitting your IRPF return.
According to leading Spanish bank Bankinter, in practice this translates into two direct benefits:
- Paying less personal income tax in the final result of your tax return
- Receiving a larger refund from the tax authorities
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How much is it worth?
The standard tax relief is €1,150 per year for each parent or grandparent who meets the basic conditions on the taxpayer’s return.
This amount increases considerably if the dependent person is over a certain age or has a recognised disability.
In order to benefit from the Mínimo por Ascendientes in your next tax return, you must meet the following conditions established by Spain’s tax agency:
- Age/Disability. The person in question must be 65 years of age or older on the tax date (usually December 31) or, regardless of age, have a recognised degree of disability equal to or greater than 33 percent.
- Cohabitation. They must have lived with the taxpayer for at least six months, in other words half the relevant tax period.
- Income Limit. The parent or grandparent cannot have earned income exceeding €8,000 per year, excluding exempt income, and they must not file an income tax return with income exceeding €1,800.
When the person in question is over 75, the deduction can be increased by an additional €1,400, meaning the total reduction for a single person being cared for increases from €1,150 to €2,550 per year.
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Who can qualify?
Bank Inter also states that: “Ascendants are exclusively those persons from whom the taxpayer is descended (parents, grandparents, great-grandparents, etc.), linked by direct kinship, by blood or by adoption.”
Looking at the Tax Agency website, their definition is as follows: “For the purposes of applying the minimum for ascendants, parents, grandparents, great-grandparents, etc. from whom the taxpayer is descended and who are related to the taxpayer by direct blood or adoption, without including persons related to the taxpayer by collateral blood relationship (uncles, aunts, or great-uncles and great-aunts) or by affinity (parents-in-law).”
How do you apply for the deduction?
You apply for the deduction when you do your annual tax return.
Spain’s tax agency has reportedly changed its system so the application is automatic in many cases. You may still be required to provide the following details, however.
When you upload your tax details and complete the family information in the draft tax return, the system should apply the reduction automatically, provided that it has the information on cohabitation and income.
If not, you might need to add this information.
Although it is not mandatory to attach documentation at the time of filing, the tax agency may request evidence to prove cohabitation for at least half of the year.
