The electoral program of Pablo Casado will include a radical change in the taxation of financial and real estate savings in the face of retirement in order to help complete public pensions. The leader of the popular ones has committed to extend the fiscal benefits of the pension plans to the rest of financial products –stocks, deposits, investment funds-, but also to investment in the purchase of housing, and that at the time of rescuing all these savings to retire is not taxed neither for the money invested nor for the interests, returns and profits that it has generated.
One of the central lines of the PP plan, which training has called «fiscal shielding of savings», is the inclusion of investment in housing as one more element of retirement savings, something relevant considering that Spaniards invest around 70% of their savings in the purchase of their flat or house. Well, Casado's proposal foresees that those who invest in the acquisition of their habitual residence may deduct the mortgage payment on their income tax return.
Tax incentive for housing
In particular, this reduction will mean a reduction of the tax base of up to 8,000 euros or up to 30% of net income from work, as it now applies for contributions to pension plans. These limits are individual, so that each member of the couple will be able to apply it in their declaration, thus reaching the degradation up to 16,000 euros a year.
This would mean recovering the tax incentives for investment in housing that the Government of Mariano Rajoy removed in 2013 to suppress the deduction for acquisition of habitual residence. In fact, Casado's proposal contemplates that those who still enjoy this deduction for having bought their home before 2013 maintain that deduction or switch to the new tax relief.
Savings on Personal Income Tax
Thus, and as detailed from the PP, a couple in which both work and each one earns 20,000 euros a year, with a mortgage of 150,000 euros at an interest rate of 2% to 20 years signed after 2013, it pays a monthly fee of 758.83 euros, without any deduction or deduction being applied to the IRPF statement. With the so-called fiscal shielding, each member of the couple would save 1,044.82 euros per year on their declaration, that is, 2,089.64 between them. This calculation would also apply to those who now benefit from the deduction, which involves a lower tax savings of 682.94 euros per person per year (1,365.88 per couple).
In this way what the PP intends to do is extend the current tax benefits of pension plans to the purchase of housing. But in addition, the popular would also apply to other financial assets, such as stocks, deposits and investment funds. This deduction of up to 8,000 euros or 30% of the income would apply as long as those savings are kept unpaid until retirement.
In addition, at the time of retirement and when redeeming this money from pension plans and other financial products, as well as the capital gains generated by the settlement of the home, they would not be taxed in the IRPF. It should be remembered that right now, when rescuing for example a pension fund, the accumulated money is taxed as income from work in the IRPF, raising the tax base and therefore, according to the form of rescue and the amount rescued, the tranche for the one that must be declared, being able to reach the maximum rate.
This electoral commitment, in case the PP manages to form a government after the general elections on April 28 and implement the measure, would logically cost the public coffers in the form of lower revenue. Specifically, from 1.750 and 2,600 million euros per year.