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ECONOMY | 05.20.2024

What investments have tax advantages on the income tax return?

Mauricio Hernández

Mauricio Hernández


Many investments have tax benefits such as relief or reductions. We are talking about pension plans, mortgages or, for example, the acquisition of mutual funds. Yes, if you didn't know… Investing has many advantages.

Many taxpayers are unaware of the tax benefits that can be obtained with just a little more information. And, even if it seems incredible, by investing, it is possible to save.

Do you know that when you file your income, you can enjoy tax breaks? Let a MAPFRE tax adviser tell you about it

Are you thinking about investing? Well, now’s the time, because there are very simple ways to achieve other economic advantages. For example, a pension plan or a mortgage could be deducted from your income tax return. There are even cases where the Tax Agency can give you money back, but the secret lies in knowing when, how and what to invest in.

A pension plan, an easy and safe bet

Did you know that by subscribing to a pension plan you could deduct up to 1,500 euros per year? This is one of the most commonly used and easiest options when filing your income. Pensions are considered earned income and the amounts contributed subtract from the income for which the tax is calculated. For example, if a person has received 30,000 euros per year for their work, but has allocated 1,000 to this financial product, the calculation of their personal income tax will be calculated based on 29,000. In short, it is a clear and direct way of reducing the taxable amount in the annual income tax return.

What are the limits and maximum amounts to be provided? Until 2021, it was possible to reduce up to 2,000 euros through this channel (or, up to 30% of the taxable base), but now it is different. With regard to the 2023 tax obligations, the limit has changed depending on whether they are individual pension plans or employment pension plans (those promoted by companies to supplement the Social Security retirement pension). In the first case, this limit has been reduced by 500 euros, so only 1,500 in the final load can be reduced. The second is 8,500 euros. Even so, in both cases the limit remains that the amount of the deduction does not exceed 30% of the taxable base. 

Despite the ease of obtaining this simple tax benefit, there are several possibilities for accessing them. Each case is different, which is why companies like MAPFRE offer the service of an adviser to determine the best way to enjoy these advantages at the time of filing the income tax return. Furthermore, if the pension plan is taken out with them, a bonus of up to 6% can be obtained.

Mortgages: save up to 15% of what was paid in the previous year

With this option, it’s best to study each individual case to find out if it is possible to have any relief. The first thing to know is that to enjoy this tax break, it is necessary to do so with a primary residence. Second residences do not apply.

If you have bought a property or are thinking about acquiring a pension or investment fund, you can opt for several tax benefits

In addition, owners who have signed their mortgage before January 1, 2013 and who have applied this tax relief to income tax returns prior to that year will be able to enjoy this benefit.

Once these requirements have been met, it is possible to deduct up to 15% of what was paid during 2023 (on a maximum base of 9,040 euros). It is also applicable to tax benefits with products associated with the mortgage, such as housing insurance or early redemption, but bear in mind that the conditions for this are very strict.

Mutual funds, another option

As in all investment cases, information is the most important thing. And, here, the first thing to know is that mutual funds are exempt from taxation until the time of their reimbursement. In short, taxes will only have to be paid when the fund's capital is withdrawn. However, if any part of these stock market shares have been sold, then it should be taxed for the gain obtained.

In these cases, MAPFRE also has a team of advisers. Their objective is to guide their clients to make the most appropriate decisions when deciding to invest.

You can consult the best pension plans and funds offered by MAPFRE AM.

Do you own a property and rent it out? You can also deduct it.

In this case, the date is also key. Only tenants who signed their contract before 2015 may apply a reduction in the tax return of up to 10.5%. However, if it is the owner of a property who has rented it out, it is necessary to know that all expenses related to the Property Tax, the insurance for the property and the community expenses, as well as municipal taxes, can also be deducted.

Donations and other contributions

People who have made monetary contributions to political parties, unions, professional associations or nonprofit organizations throughout 2023 may deduct part of the amount paid. 

In terms of membership fees and contributions to political parties, federations or coalitions, it is possible to deduct up to 20% (and up to 600 euros per year). With regard to unions, the percentage to be deducted may be between 20 and 35%, with no limit on the amount to be deducted. In the case of professional associations, the deduction limit is 500 euros. 

There are also donations. In this case, several aspects must be taken into account. First, the deduction has a taxable base limit of 10% and does not apply to the Basque Country and Navarre, where the percentages are 20 and 25%. In addition, the amounts to be deducted may increase, but only if donations have been made to the same nonprofit organization in the previous two years. 

And finally, on donations of less than 150 euros, it is possible to deduct up to 80% of the total. If you have contributed more, the deduction is also 80% on the first 150 euros donated, and 40 or 35% on the rest (to apply 40% it is necessary to have donated an equal or higher amount in the previous two years).