Doctrine by topic · DGT Observatory

Mortgage Cancellation: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 15 rulings · 2015–2025

Current position

The mortgage cancellation deed is exempt from AJD (Stamp Duty) according to article 45.I.B.18 of the TRLITPAJD, but this does not exempt from the obligation to file the tax return. In real estate transfer operations with guaranteed debt, the VAT reverse charge mechanism applies if the acquirer assumes the obligation to extinguish the debt. Furthermore, mortgage loan cancellation expenses are deductible for determining the net yield of real estate capital as they are financing expenses.

The DGT's position remains stable regarding the AJD exemption for mortgage cancellation. The evolution focuses on the precision of applying the VAT reverse charge mechanism in real estate transfers with encumbrances and on the confirmation of the deductibility of cancellation expenses for IRPF (Personal Income Tax).

Turning points

  1. V2195-20

    Defines that mortgage cancellation is not an expense inherent to the transfer, but rather the application of the amount obtained to a specific purpose.

  2. V0880-23

    Extends the application of the VAT reverse charge mechanism when the acquirer withholds part of the price to cancel the mortgage, applying it to the total amount of the sale.

  3. V1821-24

    Clarifies that the AJD exemption does not exempt from the obligation to file the tax return according to article 51.1 of the TRLITPAJD.

Analysis based on 15 of 15 rulings with a stated position. Updated 26 September 2026.

Rulings on this topic

15
V2580-25 18 Dec 2025

Cancellation of mortgage costs can be deducted from rental property income

SG de Impuestos sobre la Renta de las Personas Físicas
rendimiento neto del capital inmobiliariogastos de financiacióncancelación de hipotecagastos de notaríagastos de registro LIRPF — Ley 35/2006 del IRPF art. 22.1LIRPF — Ley 35/2006 del IRPF art. 23.1
Affects CompanyExpat · Non-residentIndividual
V1397-25 22 Jul 2025

Cancellation of mortgage costs may be included in home ownership investment deduction

SG de Impuestos sobre la Renta de las Personas Físicas
deducción por inversión en vivienda habitualrégimen transitoriocancelación de hipotecabase de deduccióngastos de adquisición LIRPF — Ley 35/2006 del IRPF art. 68.1.1ºLIRPF — Ley 35/2006 del IRPF art. 70
Affects CompanyExpat · Non-residentIndividual
V1821-24 19 Jul 2024

Mortgage cancellation is exempt from ITP and AJD, but requires tax filing

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
cancelación de hipotecaactos jurídicos documentadosexenciónsujeto pasivohecho imponible TRITPAJD — RDLeg 1/1993 de ITP y AJD art. 28TRITPAJD — RDLeg 1/1993 de ITP y AJD art. 29
Affects CompanyExpat · Non-residentIndividual
V1788-24 17 Jul 2024

Mortgage cancellation costs are deductible from real estate capital income

SG de Impuestos sobre la Renta de las Personas Físicas
rendimientos de capital inmobiliariogastos deduciblesgastos de financiacióncancelación de hipotecarendimiento neto LIRPF — Ley 35/2006 del IRPF art. 22.1LIRPF — Ley 35/2006 del IRPF art. 23.1
Affects CompanyExpat · Non-residentIndividual
V3554-20 14 Dec 2020

Repayment of a mortgage loan is not subject to Transfer Tax

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
amortización de préstamocancelación de hipotecaactos jurídicos documentadosexenciónhecho imponible TRITPAJD — RDLeg 1/1993 de ITP y AJD art. 31.2TRITPAJD — RDLeg 1/1993 de ITP y AJD art. 45.I.B
Affects CompanyExpat · Non-residentIndividual
V2195-20 29 Jun 2020

Mortgage cancellation is not an inherent expense in the sale of a property

SG de Impuestos sobre la Renta de las Personas Físicas
ganancia patrimonialvalor de transmisióngasto inherentecancelación de hipotecatransmisión onerosa LIRPF — Ley 35/2006 del IRPF art. 33LIRPF — Ley 35/2006 del IRPF art. 34.1
Affects CompanyExpat · Non-residentIndividual
V2999-18 21 Nov 2018

The deed of partial mortgage cancellation on a property is exempt from AJD

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
cancelación de hipotecaactos jurídicos documentadosexenciónresponsabilidad hipotecariaescritura notarial TRITPAJD — RDLeg 1/1993 de ITP y AJD art. 31.2TRITPAJD — RDLeg 1/1993 de ITP y AJD art. 45.I.B.18
Affects CompanyExpat · Non-residentIndividual

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