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A taxpayer inquired whether they could continue to deduct mortgage payments after subrogating their loan to another entity to obtain better terms. The Directorate General for Taxes (DGT) ruled that subrogation or novation does not extinguish the right to the deduction, provided the new loan is used to repay the previous one.
Taxpayers who refinance or transfer their mortgage to a different lender to improve conditions can maintain their tax relief for main residence investment, as long as the new loan is used to settle the existing debt.
The tax team reviews your specific situation.
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