Co-owners of a property may only deduct the proportion corresponding to their ownership stake

The application of the deduction for investment in a primary residence raises questions when the property ownership does not belong to a single titleholder. In situations of joint ownership or co-ownership, doubts arise as to whether a taxpayer can apply the deduction for the totality of the loan amortization installments, especially if they are assuming the full payment of the debt following the death of a spouse.

What the DGT has ruled

The Dirección General de Tributos (DGT) has determined that the tax benefit for investment in a primary residence is strictly linked to the ownership of the full title of the property. According to the administrative criteria, when a property is acquired in joint ownership, each taxpayer is entitled to apply the deduction only based on the fractional share of the property that corresponds to them.

In this sense, although a taxpayer satisfies 100% of the mortgage loan installments, they cannot apply the deduction for the totality of said amounts. The right to the deduction must maintain an exact correspondence with their percentage of ownership of the asset. For example, if a taxpayer holds 50% of the full title, they may only deduct the amounts linked to their undivided share, regardless of whether the actual mortgage payment is higher.

What this means for you

If you are a co-owner of a home and wish to apply this deduction in your IRPF tax return, you must take into account that the deductible expense is not determined by cash flow or the payment made, but by your ownership share. This directly affects individuals who:

• Own a home under a joint ownership regime.
• Have assumed the total payment of a shared mortgage following a succession event.
• Intend to apply the deduction for the portion that would correspond to other heirs.

The current regulations in Personal Income Tax (IRPF) require that there be a direct relationship between the ownership of the property and the amount of the requested deduction.

What should be done

In a situation of co-ownership, it is necessary to verify the ownership percentage stated in the property deed. The amount of the deduction must always be calculated based on the proportional part that corresponds to each titleholder. It is fundamental that the documentation proving the mortgage payment coincides with the legal reality of the property to avoid requests from the Tax Administration.