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V3003-20 5 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Full deduction of early repayment possible if made while property is primary residence

A taxpayer inquired whether they could deduct the full amount of a €5,000 early repayment made over three months, or only the portion corresponding to the period the property served as their primary residence. The Directorate General for Taxes (DGT) ruled that the full amount is deductible provided the repayment was completed while the property maintained its status as a primary residence.

The question raised

Whether, in addition to the three monthly installments from January to March, the entire 5,000 euros repaid early during that period can be included in the 2019 deduction base, or only the proportional part corresponding to the months during which it constituted the habitual residence out of the entire year, i.e., three twelfths.

The DGT's ruling

From the moment the taxpayer ceases to reside in their habitual residence, it loses such status and the right to the deduction for amounts paid from that point forward is lost. However, the taxpayer may apply the deduction in the tax year based on the amounts paid up to the date on which the dwelling ceases to be their habitual residence. Therefore, if the early repayment was completed while the dwelling was the habitual residence, the entire amount may be included in the deduction base.

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