Skip to content
Back to index
V1955-20 16 June 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 or increasing a mortgage loan

A taxpayer under the transitional regime wishes to cancel their current mortgage to take out a new one with better terms and a higher principal amount. The DGT rules that replacing a loan 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 repayment 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 deduction, as it only modifies the agreed conditions. The installments of the new loan (principal repayment and interest) entitle the taxpayer to a deduction in the proportional part attributable to the original loan intended for the dwelling. However, the proportional part of the new loan corresponding to the increase in principal due to the extension shall not be subject to deduction. The connection with the lender and the purpose linked to the dwelling must be proven.

Book your free first meeting