Subsidy guide · Updated May 2026

Your installation could cost less than half — if you know what to claim.

IRPF tax deductions, direct subsidies, CAE certificates, IBI property tax relief — every grant available to homeowners on the Costa Blanca, explained.

Want to check first which grants you may qualify for?

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Exact amounts depend on your tax status, your property and current programme availability. We calculate everything during the free audit.

5 types of grants, one single application.

Most homeowners never claim half of these. We help you get every euro.

Tax residents only

IRPF tax deduction

20% to 40% off your income tax return. Up to €3,000/year.

Subject to availability

Direct grant

Up to 40% of project cost via IVACE+i / Next Generation EU funds.

Market-dependent

CAE certificate

Sale of energy savings certificates: estimated €1,500–€3,000.

Varies by municipality

IBI property tax relief

Property tax reduction for 3 to 5 years.

Split payment

Financing

0% APR up to 24 months. No opening fees up to 12 months.

IRPF income tax deductions for energy efficiency

Source: Real Decreto-ley 19/2021 · Additional Provision 50 of the Spanish Income Tax Act

Available to Spanish tax residents only. Non-residents cannot claim these deductions. We confirm your eligibility during the free audit.

20% deduction

Art. 1

Heating and/or cooling demand reduced by ≥ 7%, proven by energy certificates before and after.

Maximum deductible base: €5,000/yearMaximum saving: €1,000/year off your tax bill
Primary residence or property rented as a dwelling
Expires: 31 December 2026
Most relevant for an individual heat pump installation

40% deduction

Art. 2

Non-renewable primary energy consumption reduced by ≥ 30%, or energy rating improved to class A or B.

Maximum deductible base: €7,500/yearMaximum saving: €3,000/year off your tax bill
Primary residence or property rented as a dwelling
Expires: 31 December 2026

60% deduction

Art. 3

Full building energy rehabilitation (co-ownership). ≥ 30% reduction in primary energy or upgrade to class A or B.

Maximum deductible base: €5,000/year · Cumulative cap: €15,000Maximum saving: €3,000/year · Up to €9,000 total
Owners in predominantly residential buildings
Expires: 31 December 2027

Why reduced 10% VAT doesn’t apply to heat pump installations

Source: Spanish VAT Act · art. 91.Dos.1.10º

Spanish law allows 10% VAT on residential renovation works, but with a key condition: materials supplied by the installer must not exceed 40% of the taxable base of the operation.

Conditions for reduced VAT

  • Client is a private individual (not a company)
  • Property is more than 2 years old
  • Materials supplied by the installer ≤ 40% of the taxable base

In a heat pump installation, the equipment (heat pump unit, hot water tank, accessories) typically represents 55% to 75% of the total cost. Since this far exceeds 40%, the entire invoice is subject to the standard 21% rate.

Artificially splitting a single operation into multiple invoices to stay under 40% is considered tax fraud by Spain’s Dirección General de Tributos. It is not an option.
For transparency, all our heat pump quotes include 21% VAT. We prefer to be upfront rather than promise a saving that doesn’t apply.

Energy Savings Certificates (CAE)

Source: Real Decreto 36/2023 · Orden TED/1446/2023

The CAE system lets you monetise the energy your new installation saves. It’s not a direct grant — it’s the sale of savings certificates to large energy companies required to offset their footprint.

How does it work?

1

We calculate the energy your new heat pump will save compared to the old system

2

We generate the corresponding energy savings certificates

3

We sell them to obligated parties (energy companies) at market price

4

You receive the payment by bank transfer — typically €1,500 to €3,000

The exact amount depends on the energy saved and the current market price of certificates, which fluctuates. We estimate it during the free audit.
Can be combined with IRPF deductions and direct grants (no double counting)

Regional grants — IVACE+i / Valencian Government

The Valencian Government periodically offers direct subsidies through the IVACE+i programme, funded by Next Generation EU.

  • Direct subsidy of up to 40% of eligible costs
  • Caps vary by profile (residential, vulnerable households, etc.)
  • Availability depends on open calls published in the DOGV
Funds run out and calls open and close. We check availability before every project and inform you of alternatives if the programme is closed.
We check for you — call us or book your free audit.

IBI property tax relief

Source: art. 74.5 TRLHL · Municipal competence

Many Costa Blanca municipalities reduce the IBI property tax for homes that install renewable energy systems, including heat pumps.

  • Up to 50% reduction
  • Typical duration: 3 to 5 years
  • Usual requirement: proof of a renewable energy installation (heat pumps qualify)

IBI relief by municipality (Costa Blanca)

MunicipioBonificaciónDuraciónEstado
AlicanteUp to 50%3 yearsVerified 2025
TorreviejaUp to 50%5 yearsVerified 2025
BenidormUp to 50%3 yearsVerified 2025
Jávea / XàbiaUp to 30%5 yearsTo confirm
DéniaUp to 50%3 yearsVerified 2025
CalpeUp to 50%3 yearsTo confirm
AlteaUp to 50%3 yearsTo confirm
OrihuelaUp to 50%5 yearsVerified 2025
Alfaz del PiUp to 50%3 yearsTo confirm
ElcheUp to 50%3 yearsVerified 2025

Indicative data based on published fiscal ordinances. We verify current information for your municipality during the audit.

Your municipality not listed? We’ll confirm during the audit.

Can grants be combined?

Yes, with some nuances. Here are the stacking rules:

IRPF + Direct grants

Yes, but the IRPF deductible base is calculated on the net cost (after subtracting direct grants received).

CAE + Direct grants

Yes, combinable as long as the same energy saving is not double-counted.

IBI relief

Fully independent. Applies because a renewable system is installed, regardless of other aid.

Two Next Generation programmes

The same expense cannot be funded by two programmes from the same EU fund.

Real example: 120m² villa, air-to-water heat pump

Tax-resident owner · IVACE+i call open

Gross installation cost (21% VAT included)~€12,000
Direct IVACE+i grant (up to 40%)−€4,800
CAE certificate (estimated)−€1,500 to −€3,000
Your net cost~€4,200–€5,700
+ IRPF 40% deduction on net cost (single tax return)up to −€2,280

+ IBI property tax relief for 3–5 years depending on your municipality

Indicative figures. Exact amounts depend on your property, your tax status and current programme availability. We calculate everything during the free audit.

Want to know exactly how much you qualify for?

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