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V1784-22 27 July 2022 · 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 principal residence investment maintained after loan subrogation or replacement

A taxpayer inquired whether changing their mortgage through subrogation or a new contract allows them to continue deducting the amounts paid. The DGT ruled that modifying financing conditions does not exhaust the right to the deduction, provided the new loan is used to repay the previous one.

The question raised

Whether, after performing the restructuring operation through subrogation or cancellation and new contracting, by the resulting form of indebtedness, the same right to deduct will be held for the amounts amortized or satisfied by it. Whether the expenses generated by the operation are deductible.

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. The installments and interest of the new loan are deductible in the proportional part attributable to the amortization of the original loan intended for the primary residence. The expenses generated by these operations are also deductible. However, if the debt is canceled and a new credit is obtained without a connection between the two, the right to the deduction for the new financing would be lost.

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