Your bathroom renovation comes with a tax discount you might be ignoring
Every year, thousands of taxpayers in Spain renovate their bathroom and file their tax return without knowing they could have included a deduction. We are not talking about tax tricks or grey areas. We are talking about a deduction set out in Spanish income tax legislation, published in the BOE, that allows you to deduct up to 20% of what you invest in improving the energy efficiency of your primary residence.
At Bathscape we have spent months watching our clients in Valencia discover this after they have already filed their return. So let us explain it step by step, with figures, with a worked example and with the exact boxes on the form. No beating around the bush.
The legal framework: where this deduction comes from
The deduction for energy-efficiency improvement works on a primary residence was introduced by Royal Decree-Law 19/2021 and extended in successive budget laws. As of 2026, it remains in force and allows three types of deductions:
- 20% deduction for works that reduce heating and cooling demand (maximum deduction base of 5,000 € per year)
- 40% deduction for works that reduce non-renewable primary energy consumption (maximum base of 7,500 €)
- 60% deduction for complete energy rehabilitation of residential buildings (maximum 5,000 €/year, cumulative up to 15,000 €)
For individual bathroom renovations, the one that almost always applies is the first: 20% of the investment, with a maximum deductible base of 5,000 €. This means the maximum tax saving is 1,000 € per year.
Think that sounds small? Wait for the example.
Prerequisites: what you need before the work starts
Energy performance certificate BEFORE the renovation
This is non-negotiable. You need an energy performance certificate for the dwelling issued before the work begins. The certificate must be registered in the corresponding regional register (in the Valencian Community, through the Housing Ministry).
Indicative cost: 80–150 € for a standard flat.
Energy performance certificate AFTER the renovation
Once the work is completed, you need a second certificate demonstrating that the heating and cooling demand has been reduced by at least 7% (for the 20% deduction) or that non-renewable primary energy consumption has been reduced by at least 30% (for the 40% deduction).
Yes, you need two certificates. Spanish bureaucracy never disappoints.
The property must be your primary residence
The deduction only applies to the taxpayer’s primary residence or to rented properties (in which case the landlord applies it). It does not apply to second homes or commercial premises.
The calculation formula
Let us get to the mathematics, which is what matters:
Deduction base = Amounts paid for the energy-improvement works (VAT included)
Base limit = 5,000 € per tax period (for the 20% deduction)
Deduction = Deduction base × 20%
Maximum deduction = 5,000 € × 20% = 1,000 €
It seems simple, and it is. The complication is not in the formula but in documenting that the renovation meets the requirements.
Worked example: 12,000 € bathroom renovation
Let us take a real case. Maria lives in a 90 m² flat in the Ruzafa neighbourhood, Valencia. She decides to renovate her bathroom for 12,000 € (VAT included). The renovation includes:
- Replacement of old fixtures with thermostatic low-consumption fixtures
- Installation of LED lighting with presence sensors
- Replacement of a 15-year-old electric water heater with a high-efficiency class A unit
- New insulation on the bathroom’s exterior wall (interior lining with 4 cm XPS)
- Shower tray with thermostatic mixer replacing the bathtub
Step 1: Prior certificate
Maria obtains her energy certificate before the work. The dwelling is rated E (heating demand: 85 kWh/m² per year).
Step 2: The work is completed
Bathscape carries out the renovation. Duration: 12 working days. Total invoiced cost: 12,000 € including VAT.
Step 3: Post-renovation certificate
After the renovation, the new certificate shows a heating demand of 72 kWh/m² per year. The reduction is 15.3%, which exceeds the minimum 7% required for the 20% deduction.
Step 4: Calculation of the deduction
- Total investment: 12,000 €
- Applicable deduction base: 5,000 € (the permitted maximum)
- Deduction: 5,000 € × 20% = 1,000 €
Maria saves 1,000 € on her tax return. On the net cost of the renovation, that is an 8.3% tax discount.
What if the investment were smaller?
If the renovation cost 4,000 € instead of 12,000 €:
- Deduction base: 4,000 € (the full investment, because it does not exceed the limit)
- Deduction: 4,000 € × 20% = 800 €
- Saving as a percentage of cost: 20%
The smaller the investment (within the limit), the higher the effective discount percentage.
Where to declare it: the form box
In the Model 100 income tax return, the deduction for energy-improvement works is included in the tax credit deductions section, under deduction for energy-efficiency improvement works on dwellings.
According to the Agencia Tributaria, the relevant boxes in the 2025 return (to be filed in 2026) are:
- Box 1679: Base of the deduction for works reducing heating and cooling demand
- Box 1680: Deduction amount (20% of the base)
If you access via the Renta WEB programme, the wizard guides you when you enter the renovation data in the national and regional deductions section.
Documentation you must keep
The Tax Agency can request supporting evidence during the four years following filing. Keep all of the following:
- Prior energy certificate (registered)
- Post-renovation energy certificate (registered)
- Complete invoice for the renovation, with itemised breakdown
- Proof of payment (bank transfer or card — NEVER cash; cash payments are not deductible)
- Works contract with the renovation company
- Technical data sheet of installed equipment certifying its efficiency
A detail that catches many people out: payments must be traceable. If you pay part in cash, that portion does not count towards the deduction. At Bathscape all payments are managed by bank transfer precisely for this reason.
Deadlines for applying the deduction
The deduction is applied in the fiscal year in which the post-renovation energy certificate is issued. That is:
- If the work finishes in May 2026 and the certificate is issued in June 2026, the deduction goes on the 2026 return (to be filed in April–June 2027)
- Maximum deadline: the post-renovation certificate must be issued before 31 December 2026 for works carried out in the same fiscal year
Do not drag your feet. If you finish the work in November and do not request the post-renovation certificate until January of the following year, the deduction is delayed by an entire fiscal year.
Is it compatible with grants?
Yes, but with an important nuance. The deduction base is reduced by the amount of grants received. If you received 2,000 € from the Renhata Plan and the renovation cost 12,000 €, your deduction base would be:
12,000 € - 2,000 € = 10,000 € (but since the maximum is 5,000 €, you apply 5,000 €)
In practice, if your renovation exceeds 7,000–8,000 €, the grant does not affect the deduction because you are already above the 5,000 € limit. But if the renovation is more modest, you do need to subtract the grant from the base.
For a full understanding of all available grants and how to combine them, we have a dedicated guide.
What we think at Bathscape about this deduction
Our view is clear: this deduction is underutilised. According to Tax Agency data, in the 2024 fiscal year only 47,000 taxpayers across all of Spain applied it. Considering that more than 200,000 renovations per year could qualify, we are talking about a 23% take-up rate. Regrettable.
The problem is not the deduction itself — it is that nobody explains it to the client before the work starts. By the time you arrive at your accountant in May and ask, you no longer have the prior certificate and the opportunity has gone.
At Bathscape, from the very first quote, we indicate whether the renovation meets the deduction requirements and remind the client to obtain the energy certificate before we touch a single tile. It is not complicated — it just requires planning.
Your renovation, your deduction
If you are considering renovating your bathroom, start with our configurator for an investment estimate. Also review how our process works and how we handle the VAT question in renovations. And if the numbers add up, request that energy certificate before starting. Your future self — the one filing the tax return — will thank you.
Frequently asked questions
Can I apply the deduction if I am a tenant and not the owner?
Not directly. The deduction is applied by the property owner. If you are a tenant and pay for the renovation with the owner’s permission, speak to your landlord: you can agree for them to apply the deduction and pass part of the tax saving on through your rent. It is not common, but it is legal.
What happens if the energy reduction does not reach 7%?
If the post-renovation certificate does not demonstrate a minimum 7% reduction in heating/cooling demand, you cannot apply the 20% deduction. However, you could opt for the 40% one if you demonstrate a 30% reduction in non-renewable primary energy. In practice, most renovations that include insulation and DHW improvements exceed 7% without difficulty.
Can I deduct the renovation of a second bathroom?
Yes, provided it is in your primary residence. The deduction is not limited to a specific bathroom but to the total energy-improvement works in the dwelling. If you renovate two bathrooms, the total investment counts up to the 5,000 € base limit.
Is the energy certificate the same one I need to sell or rent?
Yes, it is the same type of document. If you already had a valid one (they are valid for 10 years), you can use it as the prior certificate provided it is registered and predates the work.
Next step
Calculate the cost of your renovation in our configurator, check whether the investment justifies claiming the deduction, and plan the energy certificate before starting. It is pure fiscal common sense.