The difference between an efficient home and one that is not means a huge amount of money for your pocket and CO2 emissions for the environment. The European Union has set out to reduce emissions and improve the efficiency of homes in Spain and throughout Europe. You can take advantage of its funds for your home through the Next Generation EU programme.
What are Next Generation funds?
In 2020, in the midst of the pandemic, the European Union approved a recovery and economic change plan called Next Generation EU.
The aim of the plan is to modernise the European economy so that it is capable of dealing with crises such as the one experienced by Covid-19. The Next Generation EU funds are endowed with 750 billion euros and are divided into two plans:
The Recovery and Resilience Facility (RRF), which distributes €672.5 billion.
The REACT-EU Fund is endowed with 47.5 billion euros.
18% of this capital is for Spain, which represents 140,000 euros for its Recovery, Transformation and Resilience Plan.
This money is earmarked for several areas, such as making certain economic activities more competitive; modernising and digitalising SMEs; training; energy efficiency and the environment for the ecological transition; sustainable mobility; housing reforms that improve the energy efficiency of the home and the generation of renewable energy at home.
Next Gen EU funds for housing rehabilitation
The Housing Rehabilitation and Urban Regeneration Plan financed through Next Generation EU funds is endowed with 6.8 billion euros.
It is structured through deductions for works to improve the energy efficiency of homes and the subsidy of the costs of works. Through this fund, it is intended to renovate 120,000 homes per year to comply with the commitment of zero CO2 emissions by 2050 reached with the EU.
This strategy is complemented by the Energy Transition Plan, aimed at promoting energy savings and efficiency, as well as the use of renewable energy in state buildings, which has a budget of 1 billion euros.
Which reforms are subsidized?
The European funds do not refer to specific reforms, but rather to promote, through personal income tax and subsidies, different actions that improve the energy efficiency of buildings.
Specifically, deductions in personal income tax range from 20% to 60% of the amounts invested and are divided into three sections:
? 20% deduction for improvement works that reduce heating and cooling demand by 7% on a maximum base of 5,000 euros per year. That is, a tax deduction of up to 1,000 euros on personal income tax.
? 40% deduction for improvement works that reduce non-renewable primary energy consumption by 30% or that improve the energy rating of the home to achieve an “A” or “B” energy rating . The maximum base is 7,500 euros per home and year, so the actual deduction is up to 2,250 euros.
? 60% deduction for energy rehabilitation works in buildings with the same requirements as the previous tax relief. That is, reducing non-renewable primary energy consumption by 30% or improving the energy rating. The base in this case is 5,000 euros per dwelling per year with a maximum total of 15,000 euros. There are no total maximums for the two previous ones.
The subsidies for the costs of the works range from 40% to 80% and are also divided into three blocks:
? Aid of up to 40% for a 30% reduction in the use of non-renewable energy with a maximum of 6,300 euros per home for communities of owners.
? 60% aid for reducing the use of non-renewable energy by between 45% and 60%. The maximum deduction is 11,600 euros for homes in communities of owners.
? 80% aid for reducing the use of non-renewable energy by more than 60% with a maximum of 18,000 per home.
With these grants and deductions as a basis, there are many specific works that you can carry out. Among the most effective are improving the insulation of the facades, changing the windows, updating the heating system or switching to LED light bulbs. In the end, it is about getting closer to the concept of efficient houses with reduced emissions.
These grants and reforms apply to all homes, both the one that is already your habitual residence and your second residence. In this sense, there are mortgages to buy a house and renovate that combine both concepts under the same loan. With them, the loan for the renovation is subject to the same conditions as the mortgage and not those of a personal loan.
And if you want to go further, there are also green mortgages with special conditions if you buy a house that is efficient or transform the one you are going to buy into a more ecological one.