Income tax deductions of 100 per cent for storm damage repairs to homes in Andalucía

Those people who need to repair their homes damaged by the series of storms that battered most of Andalucía this month (and last) will be eligible for a 100 per cent deduction on their taxes for any repair costs incurred. This is one of the measures included in the tax package that the Junta de Andalucía will approve this Wednesday to benefit those affected in one way or another by this extreme weather event. This aid accompanies the other direct aid launched last week.

The package includes, in addition to personal income tax deductions for repairs, the same measure for the purchase or rental of homes due to damage and reduced rates payable on property transfer tax and stamp duty (known as ITP-AJD in Spain).

The decree-law will provide for exceptional measures to alleviate the tax burden on those who have to repair or replace their homes or who need to replace essential goods that have been damaged and for those who had to be evacuated from their homes.

The package will include deductions in personal income tax (IRPF) and super-reduced rates in property transfer tax and stamp duty. Specifically, a new temporary deduction in IRPF of 100 per cent of the repair costs for the damaged home will be created, up to the limit of the regional tax liability. This means that, if the regional tax liability is equal to or less than the eligible expense, the taxpayer will not pay regional personal income tax in 2026.

This deduction can only be applied to the primary residence or a property rented to a third party who uses it as their primary residence. It does not include the purchase of other personal property. Amounts paid for home repairs can only be deducted if these expenses are not covered by other types of public aid or insurance.

The package of measures included in the decree-law that the Junta's governing council of ministers will approve this Wednesday extends the home purchase deduction to those who have lost their home, regardless of their age or whether the purchased home is subsidised housing (VPO). Thus, all those who have to buy a new home will be able to deduct six per cent of the purchase price, including expenses, if done during the 2026 tax year.

The 15 per cent tax deduction (up to a limit of 1,200 euros) for rental housing for young people, those over 65 and victims of gender violence and terrorism is also extended to all those affected by the loss of their home due to flooding when forced to rent another place. None of the exceptional and temporary deductions included in the decree-law are limited by taxpayer income.

The second block of measures focuses on the ITP-AJD, with rates reduced to zero per cent. Thus, in the onerous property transfers category (TPO), a rate of zero per cent is set for the acquisition of a primary residence to replace the damaged one, up to a value limit of 250,000 euros. For other properties (shop premises, warehouses, farms, second homes), a super-reduced rate of 3.5 per cent has been set, again with a value limit (150,000 euros).

A zero per cent property transfer tax (TPO) is also established for vehicle purchases when they replace a vehicle that has been permanently decommissioned due to storm damage.

Similarly, the stamp duty (AJD) rate is set at zero per cent for properties used as primary residences and at 0.3 per cent for those used for other purposes, such as second homes or business use.

According to estimates from the regional finance ministry, these measures could benefit around 1,500 people, mostly via the personal income tax route.