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V5442-16 23 December 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Tax deduction for principal residence investment may be maintained when replacing a mortgage loan

A taxpayer inquired whether they could continue to claim the tax deduction for investment in their principal residence after replacing the original mortgage with a new one that covered both their share and that of their former partner. The Directorate General for Taxes (DGT) ruled that this is possible, provided the new loan is used to repay the previous one.

The question raised

Possibility of continuing to claim the deduction for investment in the primary residence for the amounts paid for the amortization of the new loan, in the proportional part of its principal that corresponds to the financing of the acquisition of the original 45% which covered the now canceled loan.

The DGT's ruling

The substitution of one loan for another with the same guarantees and conditions does not exhaust the right to deduction, as it only modifies the financing conditions. The installments of the new loan (amortization and interest) entitle the taxpayer to deduction in the proportional part of the principal attributable to the amortization of the original loan. It is required that the new loan be effectively used for the amortization of the previous one and that the connection with the purpose of the housing is maintained.

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