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V2348-20 9 July 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Deduction for main residence cannot be applied if property ownership is lost

A taxpayer inquired whether they could continue to claim the deduction for investment in their main residence after donating the property to their daughter, despite continuing to pay the mortgage. The Directorate General for Tax (DGT) ruled that this is not possible, as the deduction requires the taxpayer to maintain ownership of the property.

The question raised

Given that formally the mortgage encumbrance and its payment fall upon the consultant and their spouse, whether both could still claim the deduction for investment in the primary residence, and, if so, request a refund of undue payments from recent years.

The DGT's ruling

The deduction for investment in the primary residence is linked to the ownership of full title to the property, whether in its entirety or as an undivided share. Upon ceasing to be owners of the property due to a donation, taxpayers lose the right to the deduction, regardless of whether they continue to reside in it or continue to appear as borrowers in the mortgage loan.

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