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V2338-21 18 August 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Home insurance premiums may be deducted if their procurement is a condition of the mortgage loan

The taxpayer asks whether the premiums of a home insurance policy required by the bank to grant a mortgage can be included in the deduction for investment in the primary residence. The DGT responds that this is possible if the procurement of the insurance is a condition imposed by the lender.

The question raised

Question posed: Possibility of including, in the basis for the deduction for investment in the primary residence, the premiums paid for the aforementioned insurance, as its procurement is a condition of the entity for the granting of the loan. If affirmative, which amount is included in the 2020 deduction basis: whether the amount of the four quarterly receipts due in 2020, which are paid during said fiscal year, or the amount corresponding to the 2020 annual coverage, requiring a pro rata calculation, given that they do not coincide with each calendar quarter. Whether the deductible amount, apart from the premium itself, includes the other items included in the receipt (I.P.S., Consorcio, and L.E.A.).

The DGT's ruling

Premiums for damage insurance covering the risks mandatory under mortgage regulations form part of the basis for the deduction for investment in housing. If the insurance covers additional risks (such as theft or burst pipes) and its procurement is a condition of the lender, the entire premium is deductible. Otherwise, only the portion corresponding to the mandatory risks is deductible, requiring a breakdown from the insurer. For calculation purposes, the amounts paid during the period are included, encompassing all items on the receipt.

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