Skip to content
Back to index
V2212-20 30 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Tax deduction for main residence investment can be maintained when replacing a mortgage loan

A taxpayer inquired whether they could continue to claim the tax deduction for investment in their main residence after subrogating or replacing their mortgage loan with a new one. The Directorate General for Taxes (DGT) ruled that replacing one loan with another 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 amortization 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 of one mortgage loan for another does not imply the conclusion of the financing process nor the exhaustion of the deduction, but rather a modification of the financing conditions. The amortization installments, interest, and expenses of the new loan entitle the taxpayer to a deduction in the proportional part attributable to the amortization of the original loan. However, if a debt cancellation occurs followed by the subsequent obtaining of credit without continuity between the two, it would be understood that they are distinct operations and the right to the deduction for the new financing would be lost.

Book your free first meeting