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V0827-20 13 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Full early mortgage repayment deduction unavailable if only 50% owner of property

A taxpayer inquired whether they could deduct 100% of an early mortgage repayment made with their own funds while holding only a 50% ownership stake. The Directorate General for Taxes (DGT) ruled that they may only deduct the proportion corresponding to their share of ownership.

The question raised

Possibility for the consultant to include in their deduction base the entirety of said amount prepaid, and not just half of it, as both appear as jointly and severally liable creditors in the loan and their ownership percentage in the dwelling is 50 percent.

The DGT's ruling

For the deduction for investment in the primary residence, the taxpayer must hold full ownership of the dwelling. Only amounts linked to the loan that satisfy their share of ownership may form part of the deduction base. Any amount contributed that exceeds their percentage of ownership shall be considered a loan, a gift, or consideration in favor of the other co-owners and shall not be deductible.

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