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V0715-22 1 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Mortgage loan modification or extension does not exhaust the right to tax relief for investment in primary residence

The taxpayer asks whether, when modifying a mortgage to increase the principal to finance renovations, they can deduct the entirety of the new instalments. The DGT rules that only the proportional part linked to the original loan intended for the acquisition of the property is deductible.

The question raised

Whether, after carrying out the restructuring operation through novation or cancellation and new contracting, due to the resulting form of indebtedness, the taxpayer will have the same right to deduct the amounts amortized or satisfied, in the proportional part corresponding to the original acquisition cost plus the expenses related solely to the change in financing, or whether they may apply the deduction for the total amounts linked to the novated loan, which would include the portion corresponding to its increase for the renovation.

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