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V3171-20 22 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Deduction for investment in main residence may be maintained when replacing a mortgage loan

The applicant asks whether they can continue to claim the deduction for investment in their main residence after replacing their original mortgage with a new mortgage loan. The Directorate General for Tax (DGT) responds that the substitution or extension of a loan does not interrupt the financing process nor exhaust the right to the deduction.

The question raised

Whether, after amortizing the credit, the deduction for investment in the primary residence may continue to be applied based on the amortization and associated expenses of the mortgage loan.

The DGT's ruling

The subrogation, substitution, or expansion of a loan does not imply the conclusion of the financing process nor does it exhaust the possibilities for the deduction. The installments and interest of the new loan are deductible in the proportional part allocated to amortizing the previous external financing. However, the portion of the principal allocated to purposes other than the acquisition of the dwelling shall not be eligible for deduction. The deduction is maintained if the cancellation of the original credit is carried out in the same act with part of the principal of the new loan.

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