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V0285-24 4 March 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Right to tax deduction for main residence investment maintained if current mortgage is cancelled and a new one is taken out simultaneously

A taxpayer inquired whether switching banks by cancelling an existing mortgage and taking out a new one would result in the loss of the tax deduction for investment in their main residence. The Directorate General for Tax (DGT) ruled that if the cancellation and the new contract are executed as a single transaction, the right to the deduction is maintained for the instalments paid.

The question raised

Whether, after carrying out the restructuring operation through the cancellation and new contracting of a loan, the taxpayer will retain the same right to deduct the amounts that are amortized or satisfied by it.

The DGT's ruling

The novation, subrogation, or substitution of one loan for another does not exhaust the possibilities of applying the deduction, provided that the new loan is dedicated to the amortization of the previous one. To avoid losing the right, the cancellation of the original loan and the signing of the new contract must occur simultaneously. The annuities of the new loan shall be deductible in the proportional part attributable to the amortization of the loan intended for the dwelling. If there is an increase in the principal intended for other purposes, that part shall not be deductible.

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