Personal income tax deduction for buying an electric car in 2024
In this article we will explore the tax benefits of the personal income tax deduction for electric cars, as well as the requirements and conditions necessary to apply this deduction.
We will discover how the purchase of an electric car can have economic and environmental benefits for taxpayers.
Tax benefits of the personal income tax deduction for electric cars
Deduction for buying an electric car
Which electric vehicles benefit from the deduction?
The vehicle must be considered as an electric vehicle according to the definition established by the tax authorities.
Remember that since last year (2023) a new IRPF deduction is applicable for the purchase of any of the following cars:
- Pure electric (BEV), extended range (EREV), fuel cell (FCV), fuel cell hybrid (FCHV) or plug-in hybrid (PHEV) passenger cars or cars.
- Quadricycles and certain motorbikes powered exclusively by electric motors and type-approved as electric cars.
Electric car models must meet the requirements established by law in each case and be included in the base of electric cars eligible for the MOVES programme of the Institute for Energy Diversification and Saving (IDAE): https://coches.idae.es .
Amount of the deduction
If you purchase one of these electric cars, you will enjoy a deduction of 15% of its acquisition value, including the expenses and taxes inherent to the purchase and discounting the subsidies received for the purchase. The maximum deduction base is 20,000 euros, so the deduction applicable on the IRPF quota can be up to 3,000 euros (20,000 x 15%).
How long do I have to buy an electric car?
On the other hand, you should take into account the following deadlines:
The vehicle must be purchased between 30 June 2023 and 31 December 2024.
The deduction is applicable in the IRPF of the year of registration, which must take place before 31 December 2024.
Example of the deduction
In 2024 you purchase and register an electric vehicle:
Concept | Acquisition value of vehicle | ||
15.000 | 35.000 | 50.000 | |
Deduction basis | 15.000 | 20.000 | 20.000 |
Personal Income Tax Deduction 2024 (15%) | 2.250 | 3.000 | 3.000 |
Requirements and conditions to apply the IRPF deduction for the purchase of an electric car
In order to be able to apply the deduction of the % of personal income tax on the purchase of an electric car, it is necessary to comply with certain requirements and conditions established by the current regulations.
The car must be new
New and not used for economic activity
In addition to the above-mentioned temporary requirements, it is necessary to:
- The vehicle purchased must be new (the incentive is not for a second-hand electric car).
- And it must not be used for any economic activity. If after acquiring the vehicle and applying the deduction you start to use it in an activity, you must return the deduction.
Price cap
Finally, the sale price -without VAT- of the vehicle purchased must not exceed the maximum amount established in the MOVES III electric mobility aid programme:
- 45,000 euros in the case of BEV, EREV or PHEV passenger cars (53,000 in the case of an 8-seater BEV electric car).
- 10,000 euros for motorbikes.
- No price limit for FCV, FCHV and quadricycles.
Deduction in different years
There is an option to get another personal income tax deduction in other years if you make advance payments on the purchase of the electric car.
Early payments
At the same time as the purchase deduction, an optional deduction (of 15% and with the same maximum base) has been approved, also applicable on the total purchase value, which allows the incentive to be applied in the year in which payments are made on account for the future purchase of the vehicle.
For this purpose, such advance payments must represent at least 25% of the acquisition value, with the remainder to be paid in the following two years.
In addition, the vehicle must also be registered before the end of this period.
Example 2
If you ordered an electric car with a purchase value of ¤40,000 from your dealer at the end of 2023, it is very likely that you will not have received it until 2024.
In that case, if you made a down payment in 2023 of at least ¤10,000 (25% of the value of the car), when you file your personal income tax return for that year you will also qualify for the deduction, and you will be able to apply the maximum deduction of ¤3,000.
Personal income tax deduction for charging points for electric cars
15% deduction for electric car charging points
Recharge
Since the middle of last year, a new personal income tax deduction has also been applicable for the installation of battery recharging systems for electric cars, which also aims to encourage the use of electric cars and contribute to improving the environment [LIRPF, D.A. 58.3] .
Amount
If you carry out one of these investments, you will enjoy a deduction of 15% of the total costs you bear (such as the investment in equipment and materials, the expenses for its installation and the works necessary for its development).
However, as with the deduction for the purchase of electric cars, you will have to deduct any amounts that are subsidised through public aid programmes.
The maximum annual deduction base is 4,000 euros, so the annual deduction applicable to personal income tax can be up to 600 euros (4,000 x 15%).
Requirements to be able to deduct IRPF for installing a charging point for electric cars
Temporary aspects
In principle, you will be able to apply this deduction in the IRPF of the year in which the installation is completed, which cannot be later than 2024. However, if you have incurred expenses before 31 December 2024 and the installation is completed later, you will be able to benefit from the incentive for the amounts paid up to 2024. Amounts paid in 2025 are no longer eligible for deduction.
Example
You start work at the end of 2024 and make a first payment of ¤1,000. If the installation is completed in 2025, you will be able to apply a deduction of 150 euros (1,000 x 15%) in the IRPF of 2024.
In this case, to maximise the deduction, make any additional payments before 31 December 2024.
So, for example, if you pay an additional 1,000 euros (2,000 in total), your deduction will increase to 300 euros.
Other requirements
There are also other requirements that you must meet in order to be able to apply this incentive to your personal income tax:
- The installation must have the authorisations and permits established by law.
- The recharging point may not be used for any economic activity.
- Payments must be made by credit or debit card, transfer, nominative cheque or bank transfer. Cash payments are not eligible for the incentive.
- The installation must be carried out in a property owned by you.
Two electric recharging installations?
Annual deduction
The regulation establishes that the maximum deduction base (4,000 euros) is annual, and does not say anything about the number of installations that can be carried out.
Therefore, it can be understood that if two installations are carried out (for example, in the main residence and in the second residence) in two different years, the deduction can be applied to both.
Example
In 2023 you carried out an installation of 3,000 euros in your main residence, and in 2024 you carry out a new installation in your second residence, for the same amount:
Concept
2023 | 2024 | |
Coste works | 3.000 | 3.000 |
Deduction basis | 3.000 | 3.000 |
Deduction 15% | 450 | 450 |
Full deductionl | 900 | |
PLAN MOVES III
Personal income taxation of the Moves 3 plan
The Moves III Plan provides incentives, through subsidies, for the purchase of an electric car, among others, as well as the installation of recharging points [RD 266/2021]. In principle, this programme will be in force until 31 July 2024 [RD 821/2023] . If you receive any of these subsidies:
You will have to declare it as capital gains in the general IRPF base. You should compute it in the year of receipt (no matter when you apply for it or when it is granted).
As indicated above, deduct the amount of these subsidies from the deduction base to which you are entitled in IRPF for the investments made.
The installation of electric car charging points entitles you to a deduction of 15% of the total cost of the installation, not including subsidies. In this case, the maximum annual deduction base is 4,000 euros.
Our opinion on the personal income tax deduction for buying an electric car
The deduction in the IRPF for buying an electric car is not a direct aid, they do not give you money for buying an electric car. The deduction is made in the income tax, i.e. the following year and it is not certain that it will affect you.
Remember that to deduct means to decrease the amount of tax to be paid.
In other words, the deduction is subtracted from the total tax payable, but what happens if there is nothing to pay in the income tax? Well, they don’t help you at all because the deduction is 0.
Moreover, statistics show that sales of electric cars are concentrated in big cities for small journeys.
European regulations require there to be a charging point on motorways every 60 km and we are light years away from having that in Spain.
The Netherlands sells a lot of electric cars but because it is a small country and Spain is a relatively large country.
In our opinion the electric car is still expensive and the deduction is insufficient, not accessible to the middle class and does not solve mobility over long distances.
