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V1396-24 12 June 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 investment tax relief preserved if loan is cancelled and a new one is taken out simultaneously

A taxpayer applying for the main residence investment tax deduction for a loan taken out before 2013 has enquired whether this right is maintained when switching banks by cancelling the current loan and taking out a new one. The Directorate General for Taxes (DGT) has ruled that if the cancellation and the new contract are carried out as a single transaction, the right to the deduction is not lost.

The question raised

Whether, after performing the restructuring operation through the cancellation and new contracting of a loan, the same right to deduct will be held for the amounts that it amortizes or satisfies.

The DGT's ruling

The novation, subrogation, or substitution of a loan does not conclude the financing process nor exhaust the possibility of applying the deduction, provided that the new loan is intended to amortize the previous one. If the cancellation and the signing of the new contract occur simultaneously, the right to the deduction for the installments and expenses paid is maintained. However, the proportional part of the annuities corresponding to an increase in the principal intended for purposes other than the acquisition of the dwelling shall not be deductible. In the event that the cancellation and the new contracting occur at different times and without a direct connection, the right to the deduction for the new financing would be lost.

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