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V2042-14 28 July 2014 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · novación modificativa

Mortgage loan novation changing the repayment system is subject to ITPAJD

A taxpayer inquired whether modifying a mortgage loan to change the repayment method (from French to irregular) is subject to tax. The DGT ruled that since the novation is not limited to the interest rate or the term, the exemption does not apply, and it must be taxed under the documented legal acts modality.

The question raised

Taxation of the operation.

The DGT's ruling

The deed of modificative novation of a mortgage loan with a financial institution is exempt from the gradual quota of documented legal acts only if the modification refers to the interest rate, the term, or both. If the novation includes other aspects, such as a change in the amortization system, the operation shall be subject to the gradual quota of the ITPAJD. The taxable base shall be the total guaranteed amount, including interest and other analogous concepts.

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