Taxpayers cannot apply the deduction for investment in primary residence if they did not do so before 2013

The right to apply the deduction for investment in primary residence under the transitional regime is not a permanent option for those who acquired their property on dates prior to the 2013 tax reform. The Dirección General de Tributos (DGT) has delimited the necessary conditions to maintain this tax benefit.

What the DGT has resolved

The inquiry analyzes the possibility of beginning to apply the deduction for investment in primary residence in current tax periods. The criteria establish that, to benefit from the transitional regime, the taxpayer must have applied said deduction in a tax period prior to January 1, 2013.

However, exceptions are contemplated based on the doctrine of the Tribunal Económico-Administrativo Central (TEAC). Those taxpayers who, despite being entitled to it, did not record it before 2013 for the following reasons may apply the deduction:

• Not being required to file a Personal Income Tax (IRPF) return.
• Not having a full tax liability to determine.

Conversely, those who were required to file and did not apply the deduction while having a full tax liability lose the right to apply it in subsequent years.

What this means for you

If you own a home acquired before 2013 and wish to start applying this deduction in your current tax return, your ability to do so will depend on your tax situation prior to that date. If in the years preceding the reform of Law 16/2012 you were already applying this benefit, or if you were not required to file, you maintain the possibility of continuing to do so.

However, if you were already a taxpayer with an obligation to file and with a full tax liability, but omitted the deduction at the time, current regulations prevent you from recovering it or starting its application now.

What is advisable to do

It is necessary to verify the tax situation of the tax periods prior to 2013 to confirm whether the exception requirements are met. Since the application of this transitional regime is subject to technical criteria regarding the obligation to file and the existence of a full tax liability, each situation must be analyzed individually to determine whether a valid right exists or if the opportunity to apply the deduction has expired.