- Aid for destroyed or damaged homes doubles compared with the previous decree, with advances of up to 50 %.
- There is an extraordinary deferral of State tax debts for anyone whose tax domicile is in La Palma.
- It adds aid for the farming sector, for promotion of the island’s products and contribution exemptions for self-employed sea workers.
Royal Decree-Law 28/2021 of 17 December, published in the BOE on 18 December and in force from that day, adopts complementary measures to repair the damage caused by the volcanic eruptions and for the economic and social recovery of the island of La Palma. It extends Royal Decree-Law 20/2021 of 5 October, which mobilised more than €213 million, while the eruption, which began on 19 September, continues.
The Council of Ministers declared the island a seriously affected area for a civil-protection emergency on 28 September, and a royal decree granted €10.5 million to the Canary Islands for housing and basic belongings. Behind the figures there are families who have lost their homes, their jobs or their crops, and the priority remains to help them quickly and as clearly as possible.
Housing aid
The decree raises the maximum amounts for those whose main home has been damaged: €60,480 for total destruction, €41,280 for structural damage and €20,640 for damage that does not affect the structure. For the common elements of homeowners’ associations, the maximum is €36,896. The new amounts also apply to applications in progress and to aid already granted.
It also introduces advances of up to 50 % of the maximum aid on a sworn declaration, without requiring guarantees, so that families receive liquidity as soon as possible. The rest is paid after the requirements are verified and, if the declaration proves inaccurate, repayment is due. This aid adds to the compensation from the Consorcio de Compensación de Seguros for those who had insured property. It is worth keeping the decisions received and comparing the amount granted with the new maximum.
Tax and employment measures
On tax, the decree grants an extraordinary deferral of State tax debts whose filing and payment period ends from its entry into force until 2 May 2022. To benefit, the tax domicile must be on the island of La Palma. It is a cash-flow relief that lets individuals and companies gain time at a moment of great uncertainty. It is worth confirming with the Tax Agency which specific debts fall within the deferral and how to apply.
Self-employed workers in the Special Sea Scheme who receive aid for fleet stoppage are exempted from paying contributions, subject to proof. And La Palma companies that received COVID Line aid are exempted from the obligation to maintain their activity until 30 June 2022, a flexibility designed for those who cannot operate normally.
Agriculture, promotion and what to review
The text provides up to €10 million in additional aid to the Canary Islands Government for the farming sector, conditional on justification of the earlier subsidy, and up to €2 million for campaigns promoting La Palma’s farm and fishery products. It also creates a working group with the Canary Islands to restore the road network damaged by the lava.
Those affected should check which aid they can apply for, within what deadlines and with which administration, and keep all documentation on damage, expenses and communications. It is important to find out about the compatibility between public aid and insurance compensation, and to use the support services of the local administrations and an adviser if in doubt. And those who live outside the island but have property or businesses there should also review their tax position and their cover.
Rebuilding an island is a long task, and aid only helps if it reaches those who need it and is applied for properly.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
