Taxpayers may resume the primary residence deduction if the new investment exceeds the previous one

The transitional regime for the primary residence investment deduction allows certain taxpayers to continue applying this tax benefit despite the regulatory changes introduced in 2013. However, applying this right when changing homes raises doubts about the exact moment when the investment can be computed again.

What the DGT has resolved

The Dirección General de Tributos (DGT) has clarified the possibility of starting to practice the deduction for investment in a new home (home B) after having enjoyed it in a previous home (home A). The criteria establish that, to access this regime, the home must have been acquired or amounts must have been paid before January 1, 2013.

In situations where the deduction has already been applied to previous homes, the new deduction can only begin when the amounts paid for the new home exceed the sum of the amounts invested in the previous ones that were subject to effective deduction. In practical terms, the right arises at the moment when the accumulated investment in home B is greater than what was invested in home A, which already benefited from the tax relief.

What it means for you

If you are an individual who acquired your home before 2013 and wish to apply the deduction under the transitional regime, you must maintain strict control over the amounts invested. Simply acquiring a new home is not enough to start deducting; it is necessary for the cash flow allocated to the new property to exceed the threshold of what has already been deducted in the past.

This scenario directly affects those who have changed residences while maintaining their status as beneficiaries of the transitional regime, ensuring that no duplication of benefits occurs on the same base of accumulated investment.

What is advisable to do

It is necessary to perform a precise calculation of the amounts paid for each of the homes that have been subject to deduction. This calculation should serve to determine the exact point at which the investment in the current home exceeds the total of the previous deductions. Since the regulations of Law 35/2006 and Law 16/2012 are complex, it is recommended to assess each particular situation to confirm compliance with this investment excess requirement.