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V1437-17 6 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Right to tax deduction for main residence investment maintained when replacing a mortgage loan

Two co-owners inquired whether they could continue applying the tax deduction for investment in their main residence after increasing their ownership share and changing the mortgage loan. The Directorate General for Taxes (DGT) ruled that, as the change constitutes a modification of financing conditions to repay the original loan, the right to the deduction remains intact.

The question raised

Possibility of each of them continuing to claim the deduction for investment in the primary residence for the amounts each of them pays for the amortization of the new loan with respect to the percentage of undivided participation they acquired in 2004, being 25% each.

The DGT's ruling

The substitution of one loan for another, while maintaining the guarantees and conditions, does not exhaust the investment financing process. The amortization and interest installments of the new loan entitle the taxpayer to the deduction in the proportional part attributable to the original loan intended for the acquisition of the dwelling. The deduction is not permitted if there is a debt cancellation followed by the obtaining of new credit without continuity between both.

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