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V1256-21 6 May 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

The right to the deduction for investment in the primary residence is maintained after extending a mortgage loan

A taxpayer inquires whether they may continue to deduct the amortization of their primary residence after extending their mortgage loan to renovate the property. The DGT responds that the proportional part of the loan corresponding to the original acquisition may continue to be deducted, but not the part intended for the renovation.

The question raised

Question posed: Whether, after performing the restructuring operation, due to the resulting form of indebtedness, the taxpayer will have the same right to deduct the amounts paid proportionally to the original loan. Documentation that must be submitted to the Tax Agency in order to continue applying the deduction.

The DGT's ruling

The novation or extension of a loan does not exhaust the right to the deduction for investment in the primary residence, provided that the resulting loan is used for the amortization of the previous one. The installments paid shall entitle the taxpayer to a deduction in the proportional part attributable to the amortization of the original loan intended for the acquisition. The proportional part of the annuities corresponding to the increase in principal intended for other purposes, such as the renovation of the residence, shall not be deductible.

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