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V2194-24 14 October 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Right to main residence tax deduction preserved if current mortgage is cancelled and a new one is taken out simultaneously

A taxpayer inquired whether switching banks by cancelling an existing mortgage and taking out a new one preserves the right to the main residence investment tax deduction, and whether the transaction costs are deductible. The Directorate General for Taxes (DGT) ruled that if the operations are carried out simultaneously, the right is maintained and the costs are deductible.

The question raised

Whether, after performing the restructuring operation through the cancellation and new contracting of a loan, the taxpayer will have 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 exhaust the possibilities of applying the deduction, provided that the new loan is intended for the amortization of the previous one. If the cancellation and the signing of the new contract are carried out in the same simultaneous act, the expenses generated by the cancellation of the original loan and the establishment of the new one shall be deductible. However, the proportional part of the installments corresponding to an increase in the principal intended for purposes other than the acquisition of the dwelling shall not be eligible for deduction.

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