IRPF and tax deductions for buying a home in Galicia: updated guide

IRPF tax brackets in Galicia: complete table

IRPF (Personal Income Tax) in Galicia has regional brackets that are added to state brackets. The combined total determines your marginal tax rate. Galicia maintains competitive brackets compared to other autonomous communities, which is especially relevant for foreign owners establishing tax residency in the region.

For reference, the maximum combined rate in Galicia is 48%, compared to 54% in Catalonia or 43% in Madrid. This represents significant savings for higher incomes.

Regional deduction for investment in primary residence

Galicia offers a specific regional deduction for investment in a primary residence of up to 15% of amounts paid, with a maximum base of €9,040 per year. This means a maximum tax saving of €1,356 per year. This deduction is cumulative with the state deduction.

Important: this deduction only applies to homes purchased before January 1, 2013, or in certain rehabilitation cases that Galicia has expanded beyond state regulations.

Deductible concepts include mortgage amortization, loan interest, notary and deed expenses, and ITP paid at purchase.

State mortgage deductions

In addition to the regional deduction, the Spanish state maintains deductions for mortgages taken out before January 1, 2013:

• Maximum base: €9,040 per year
• Deduction rate: up to 15% of amounts paid
• Included concepts: amortization, interest, formalization costs

For a €150,000 mortgage on an apartment in Cee at a fixed rate of 2.5%, the annual amortization and interest payment would be approximately €7,200, generating a deduction of up to €1,080 per year at the state level.

Benefits for first-time buyers

Galicia offers additional advantages for first-time home buyers:

1. Reduced ITP at 5% for buyers under 36 on protected housing
2. Additional 5% regional deduction on rent for primary residence for those under 35 (maximum base €9,040)
3. ICO loans (Official Credit Institute) with preferential conditions for first-time buyers

Banks like Abanca, Caixabank and Santander offer specific mortgages for first-time buyers in Galicia with bonuses of up to 0.3% on the interest rate when linked insurance is contracted.

Differences between regional and state deductions

It is essential to understand that two levels of deductions coexist in Spain:

The key is that both deductions are compatible and apply independently on your tax return.

How to claim deductions: Modelo 100

To claim these deductions, you must file your tax return (Modelo 100) with the Tax Agency (AEAT). The process is as follows:

1. Access the AEAT electronic portal (agenciatributaria.gob.es)
2. Select the relevant tax year
3. In the regional deductions section, apply those corresponding to Galicia
4. Include amounts paid for mortgage amortization, interest and expenses
5. Verify your tax address is registered in Galicia
6. File the return before June 30 each year

Tip: if you are a foreigner with tax residency in Galicia, ensure your empadronamiento matches your primary residence. Town halls in Cee, Corcubión or Fisterra can issue the certificate within 24-48 hours.

Non-resident implications and double taxation

If you are not a tax resident in Spain but own property in Galicia, your tax situation changes significantly:

• No IRPF deductions apply: non-residents are taxed under IRNR (Non-Resident Income Tax), which does not include these deductions
• 19-24% withholding: on imputed income from the property (1.1% of cadastral value)
• Modelo 210: quarterly or annual declaration of imputed income

Spain has double taxation treaties with over 90 countries. The most relevant for buyers in Galicia:

• United Kingdom: the treaty allows offsetting IRNR paid in Spain against UK tax
• Germany: Doppelbesteuerungsabkommen, Article 6 regulates property taxation
• France: convention fiscale, properties in Spain are taxed in Spain

Practical case studies

Case 1: British couple in Corcubión

John and Mary buy a €120,000 apartment in Corcubión with a €90,000 mortgage. Annual amortization: €4,500. Interest: €2,200. Total deductible: €6,700. Regional deduction: 15% of €6,700 = €1,005/year in tax savings. By registering and obtaining tax residency, they switch from paying IRNR (24%) to benefiting from IRPF deductions.

Case 2: German engineer working remotely from Fisterra

Markus, tax resident in Galicia with €45,000/year income, buys a €95,000 apartment. His combined marginal rate is 36.10%. The housing deduction saves him €1,356/year. Additionally, with Galicia as his tax residence, he only pays taxes in Spain, not Germany (under the double taxation treaty).

Case 3: French couple with a house in Muxía

Pierre and Marie buy a renovated stone house for €85,000. Including renovation costs, their deductible base reaches €9,040. Regional deduction: €1,356. State renovation deduction: €1,356. Total annual savings: €2,712.