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V1671-23 13 June 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Tax deduction for investment in main residence cannot be applied to new construction

A taxpayer inquired whether they could continue to claim the tax deduction for investment in their main residence after demolishing and rebuilding their home. The Directorate General for Tax (DGT) ruled that the rights regarding the demolished property ceased once it was no longer the main residence, and that the new property does not meet the requirements of the transitional regime.

The question raised

Whether the deduction for investment in the primary residence may continue to be applied for the residence currently demolished and for the duration of its reconstruction.

The DGT's ruling

The deduction for investment in the primary residence was abolished on January 1, 2013, except for those who meet the transitional regime of the 18th Transitional Provision of the Personal Income Tax Law (LIRPF). The right to the deduction regarding the demolished residence expired when it ceased to be the primary residence. The new residence does not entitle the taxpayer to the deduction because the requirements of the eighteenth transitional provision are not met. Furthermore, the right to the deduction is not transferable to another residence.

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