Tax rebate to encourage births and house purchases approved
The Assembly of Madrid has approved, with the votes of PP and Vox, the tax rebate promoted by the regional government to favour the birth rate and the purchase of homes, which is aimed at 100,000 families.
The left-wing groups (Más Madrid, PSOE and Unidas Podemos) have rejected the initiative and also rejected the compromise amendment that PP and Vox had reached to modify the text, as the approval of all parties is required for this. The ‘populares’ have accepted to incorporate separately only one of the amendments of Rocío Monasterio’s party.
The regulation will come into force this March after its publication in the Official Gazette of the Community of Madrid (BOCM). The new initiative will mean, according to the calculations of the Madrid government, a tax saving of 34.7 million.
Thus, the deduction for the birth or adoption of children has been improved, increasing from 600 to 700 euros per year for the first three years, adding 300 euros more for each family, and a new incentive has been created for new large families, which will receive a 50% discount on the autonomous community’s personal income tax for three years. In the case of special category families, this rebate will be 100%.
In addition, the deduction for the care of children under the age of three will be increased to 25% of the Social Security contributions for hiring carers and up to 40% in the case of large families, and foster and adopted children will also be placed on the same footing as descendants and adopted children for the purposes of applying the allowances in Inheritance and Gift Tax.
Access to housing
In terms of aid for access to housing, two new deductions are established and another is extended in Income Tax. Firstly, the purchase linked to a birth or adoption will have a deduction of 10% of the purchase price, prorated over ten years, with an annual limit of 700 euros.
Likewise, taxpayers under 30 years of age, and up to that age, will be able to deduct 25% of the interest paid during the year on mortgage loans obtained for the purchase of their main residence, with a limit of 1,000 euros per year.
With regard to renting, young people under 35 and those under 40 who are unemployed and have family responsibilities will be able to deduct up to 1,200 euros per year from the amounts they have paid during the tax period for renting their main residence, 20% more than at present.
