Madrid residents affected by tax issues due to home renovation grants
At least several dozens of Madrid residents have stopped receiving the minimum living income or other non-contributory benefits from the government due to a tax problem and crossed data, leaving pensioners and widows from some of the city’s poorest neighborhoods without their main source of income, as reported by ABC. This issue was discussed on Monday in the Madrid City Council, which has agreed to urge the Spanish Government to exempt municipal subsidies from personal income tax (IRPF). The Popular Party (PP), the promoter of the initiative, Más Madrid, and Vox voted in favor, while the Spanish Socialist Workers’ Party (PSOE) abstained.
Reforming tax regulations to benefit low-income residents
Previously, the grants provided by the Housing Department for accessibility, conservation, energy efficiency, and health, such as the removal of asbestos, were considered as capital gains in the income tax declaration. «Many recipients of these subsidies have been receiving communications throughout the year from the Provincial Director of the National Institute of Social Security in Madrid, informing them that they have to return a certain amount of their benefits as a result of considering the municipal subsidy received as income derived from work, capital, economic activities, and/or capital gains, exceeding the legally established income limits in the General State Budget Law,» said Álvaro González, the Housing Delegate in the council meeting. Gema Delgado, a 43-year-old resident affected by this issue, spoke with this newspaper: her building is undergoing asbestos removal, her community received a municipal grant for the renovation, and she has stopped receiving the minimum living income, even though she only earns 60 euros per month. «This matter is causing a lot of prejudice to the affected families, as most of them are elderly widowed women who live alone with very low incomes. Moreover, they have already paid a significant amount to the Tax Agency in their income tax declaration as capital gains,» González highlighted.
A call for fair treatment of Madrid residents
«It makes no sense and it is intolerable that the government of Pedro Sánchez discriminates against Madrid residents,» González criticized. The PP’s proposal asks the Spanish Government to modify Article 41 of Royal Decree 439/2007, of March 30th, which approves the Regulation of the Personal Income Tax, by including an additional exemption. It includes «subsidized actions regarding the rehabilitation of housing for improving accessibility, energy efficiency, conservation, and health in residential buildings granted by the Madrid City Council.» Although Más Madrid and Vox supported the proposition, their respective amendments were rejected by the PP.