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A taxpayer has requested clarification on whether a court-ordered refund of mortgage establishment costs is subject to Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) has ruled that the recovered funds do not constitute income, but the taxpayer is obliged to regularise the primary residence tax deduction previously applied to those costs.
Taxpayers who recover mortgage costs through legal action must adjust their previous tax returns to repay any tax relief claimed on those specific expenses.
The tax team reviews your specific situation.
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