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V1125-24 23 May 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Right to main residence tax deduction preserved if current mortgage is cancelled and a new loan is taken out simultaneously

A taxpayer inquired whether switching banks by cancelling an existing mortgage and taking out a new one preserves the right to the main residence investment tax deduction, and whether the transaction costs are deductible. The Directorate General for Taxes (DGT) ruled that the simultaneous nature of these actions allows the right to the deduction to be maintained.

The question raised

Whether, after carrying out the restructuring operation through the cancellation and new contracting of a loan, the same right to deduct will be held for the amounts it amortizes or pays. Whether the expenses generated by the operation are deductible.

The DGT's ruling

The novation, subrogation, or substitution of a loan does not exhaust the possibilities of applying the deduction, provided that the new loan is intended for the amortization of the previous one. If the cancellation and the signing of the new contract are carried out in a single act, the right to the deduction for the installments and expenses paid is maintained. In this case, the expenses generated by the cancellation of the original loan and the establishment of the new one shall also be deductible. However, the proportional part of the annuities corresponding to an increase in the principal intended for other purposes shall not be deductible.

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