Taxpayers may recover the deduction for investment in their primary residence if they move back in

The transitional regime for the deduction for investment in the primary residence has raised various doubts regarding the possibility of reactivating this tax benefit in the event of changes in the taxpayer's effective residence. The Directorate General of Taxes (DGT) has recently clarified the applicable treatment when a property that ceased to be a primary residence once again meets this condition.

What the DGT has ruled

The DGT determines that those taxpayers who met the requirements to benefit from the transitional regime may practice the deduction again if the property once again constitutes their primary residence. For this right to be activated, the following requirements must be met:

• Effective residence: The property must be effectively and permanently inhabited by the taxpayer themselves.
• Duration: Said residence must be maintained for a minimum period of three continuous years.
• Deduction base: The right to the deduction does not apply to the total historical investment, but rather restarts by considering only the amounts paid since the new commencement as the primary residence.

What this means for you

If you own a property acquired before 2013 and, after a period in which it was not your main residence, you decide to move back in, you do not definitively lose the opportunity to apply this tax benefit. However, it is fundamental to understand that the deduction is not recovered retroactively on amounts previously deducted; instead, a new right is generated based on the payments made from the moment the primary residence is re-established.

What you should do

In a situation involving a change of residence, it is necessary to document the effective stay in the property to prove compliance with the three-year period required by the regulations. Since the calculation of the amounts to be deducted restarts, it is necessary to keep precise track of the payments and the investment made since the new start of the residence. It is recommended to assess each particular situation to ensure that the requirements for permanent habitability demanded by the Personal Income Tax (IRPF) Law and its Regulations are met.