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V1785-22 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 main residence investment maintained after mortgage refinancing

A taxpayer wishes to cancel an old mortgage loan to enter into a new one, ensuring that a garage space is no longer included as collateral. The Directorate-General for Tax (DGT) rules that replacing one loan with another does not exhaust the right to the tax deduction, provided the new loan is used to repay the previous one.

The question raised

Whether, after carrying out the restructuring operation, the same right to apply the deduction for the amounts paid for its amortization will be maintained under the new loan, even if one of the parking spaces has been excluded as mortgage collateral.

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 amounts paid under the new loan shall entitle the taxpayer to a deduction in the proportional part attributable to the amortization of the original loan. The release of mortgage liability for one of the parking spaces does not affect the right to the deduction for the amounts linked to the loan. The proportional part of the annuities corresponding to the increase in principal intended for purposes other than the acquisition of the dwelling shall not be deductible.

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