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V2807-23 16 October 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Right to tax deduction for main residence investment maintained following loan novation

A taxpayer inquired whether they could continue to claim tax deductions for mortgage instalments after undergoing a loan novation to improve terms. The Directorate General for Tax (DGT) ruled that novation does not extinguish the right to the deduction, provided the new loan is used to repay the previous one.

The question raised

Whether, after performing the restructuring operation through contractual novation, the taxpayer will retain the same right to deduct the amounts that are amortized or satisfied.

The DGT's ruling

The novation, subrogation, or substitution of a loan does not conclude the financing process nor exhaust the possibility of applying the deduction. The installments of the new loan shall entitle the taxpayer to a deduction in the proportional part attributable to the amortization of the original loan. If there is an increase in the principal, only the portion intended to cover the cancellation costs of the previous loan shall be deductible; the portion intended for other purposes shall not be eligible for deduction.

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