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V2002-22 20 September 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 when subrogating or replacing a mortgage loan

A taxpayer inquired whether they could continue to claim a tax deduction for investment in their main residence after replacing their mortgage through subrogation or by cancelling the existing loan and entering into a new one. The Directorate General for Taxes (DGT) ruled that a change in 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, the resulting form of indebtedness will grant the same right to deduct the amounts that are 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 deduction, as it only modifies the agreed conditions. The installments and interest of the new loan are deductible in the proportional part attributable to the amortization of the original loan. If the cancellation and the new contracting are carried out simultaneously, the expenses generated by both operations are deductible. However, if the debt is cancelled and a new loan is contracted at different times without a direct connection, the right to the deduction for the new financing would be lost.

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