Skip to content
Back to index
V1658-20 28 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Deduction for main residence can be maintained when replacing a mortgage loan

A taxpayer inquired whether they could continue to deduct the repayment of principal and interest from a new loan after subrogating or changing their original mortgage. The Directorate General for Taxes (DGT) ruled that replacing one loan with another does not exhaust the right to the deduction, provided the new loan is used to repay the previous one.

The question raised

Possibility of continuing to claim the deduction for the acquisition of a primary residence for the amounts paid for the amortization of the principal and interest of the new loan, as well as for the expenses incurred by the change of loan.

The DGT's ruling

The substitution or extension of a loan does not conclude the financing process nor exhaust the possibility of applying the deduction. The installments of the new loan entitle the taxpayer to a deduction in the proportional part attributable to the amortization of the original loan intended for the primary residence. However, the proportional part of the annuities corresponding to the increase in principal due to the extension shall not be subject to deduction. In the event of cancellation and the obtaining of new credit without continuity, the right to the deduction would be lost.

Book your free first meeting