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V0312-21 ·19 February 2021 ·consulta-vinculante Medium impact
Tax

Debt substitution via new loan ineligible for main residence investment tax relief

A taxpayer intends to take out a new loan to repay a portion of a previous loan used to fund an extension of their main residence. The aim is to clearly separate the debt related to the main residence from that of a rented apartment. The Directorate General for Taxes (DGT) ruled that this constitutes a substitution of debt rather than a reduction of the debt itself.

In 5 key points

How it affects those involved

Taxpayers seeking to restructure debt to isolate main residence expenses must be aware that replacing existing debt with a new loan may disqualify them from claiming tax deductions for main residence investment.

Lifecycle

2021-02-19PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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