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V2972-20 2 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

75% of loan instalments may be deductible if debt with co-owner is proven

A taxpayer inquired whether they could claim the deduction for investment in their main residence on 75% of loan instalments, despite being listed as a joint and several debtor for 50%. The Directorate General for Tax (DGT) ruled that the 75% deduction is only permissible if the taxpayer proves that the other co-owner lent them the necessary amount to complete their ownership share.

The question raised

A) Whether, as of the entry into force of the eighteenth transitional provision of the Personal Income Tax Law, approved by Law 16/2012, the deduction for investment in the primary residence could be applied based on the amounts satisfied due to the 75% ownership of the property, even if in the loan used to finance the purchase they appear as a joint and several debtor with the other owner, attributing 50% to each.

The DGT's ruling

The deduction is linked to the ownership of the property and the method of financing is irrelevant. As they are joint and several debtors, it is legally understood that each one pays 50% of the installment. To deduct 75%, the taxpayer must prove that the other co-owner lent them the corresponding portion to complete their investment. If proven, they may deduct 50% for their share of the joint and several debt and the other 25% due to the reduction of the debt with the co-owner.

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