Impossibility of applying the deduction for investment in primary residence after 2012

The Dirección General de Tributos (DGT) has issued a relevant ruling regarding the application of the deduction for investment in primary residence within Personal Income Tax (IRPF). The analysis focuses on the possibility of taking advantage of this tax benefit after having acquired a new home and having disposed of the previous one.

What the DGT has ruled

The inquiry raised whether a taxpayer could continue applying the deduction for the unused portion of a previous loan, considering their participation in a new mortgage for a different property. The DGT has determined that the deduction for investment in primary residence was abolished with effect from January 1, 2013.

According to the eighteenth transitional provision of the IRPF Law, this benefit can only be applied by those who acquired their home before said date. As this is a new acquisition subsequent to December 31, 2012, the amounts paid are not eligible for the deduction. Likewise, the tax authority emphasizes that the right to the deduction on one home is not transferable to another home.

What this means for you

If you are an individual who has acquired a new primary residence after 2012, you cannot apply the deduction for investment in primary residence to the amounts of the new acquisition or the new mortgage. The fact of holding a previous loan with a right to a deduction does not allow for the transfer of that tax benefit to a new property or to the unused portion of the previous debt.

What you should do

It is essential to verify the exact date of the home acquisition to determine the applicability of any tax benefit related to investment in a primary residence. Since current regulations limit this right to acquisitions made before 2013, it is necessary to analyze the particular situation of each taxpayer and the chronology of their real estate investments to avoid errors in the IRPF tax return.