Taxpayers entitled to the main residence deduction must have applied it before 2013

The deduction for investment in the main residence, which was eliminated for new acquisitions as of 2013, remains applicable under specific conditions for those who already had this acquired right. The recent interpretation of the regulations seeks to delimit who can continue to benefit from this tax incentive under the eighteenth transitional provision of the Personal Income Tax Law (LIRPF).

What the DGT has resolved

The administration has clarified that, to exercise the right to this deduction, the taxpayer must have applied it in a period prior to January 1, 2013. However, the criteria of the Central Economic-Administrative Tribunal (TEAC) have been integrated to qualify this requirement in particular situations.

According to this criterion, the deduction may be applied if the taxpayer did not use it before 2013 for reasons beyond their control, such as:

• Not being required to file an income tax return.
• Not having sufficient full tax liability to apply the deduction.

However, the DGT establishes a clear limit: those taxpayers who, being required to file and having a full tax liability, decided not to apply the deduction at the time, may not apply this benefit.

What it means for you

If you acquired your main residence before the reform of Law 16/2012, you may be entitled to continue applying this deduction in your current tax returns. The determining factor is not only the date of acquisition but also your history of tax compliance prior to 2013.

This scenario directly affects individuals who, due to various circumstances of their economic situation or their obligation to file, were unable to take advantage of the tax incentive in the years when the regulations generally allowed it.

What you should do

It is necessary to review income tax returns filed prior to 2013 to verify whether the requirements of the obligation to file and the existence of full tax liability were met. In the event that the deduction was not applied because there was no obligation to file or due to a lack of tax liability, the possibility of applying it in current years must be assessed in accordance with the transitional provision of the LIRPF. Each situation requires an analysis of the taxpayer's fiscal history to confirm the eligibility for the benefit.