Doctrine by topic · DGT Observatory
How the DGT's position on this topic has evolved, and the rulings it rests on.
Current position
The novation, subrogation, or substitution of a loan does not exhaust the right to the deduction for investment in the primary residence if the new loan is used to amortize the previous one. For the expenses of both operations to be deductible, the cancellation of the original loan and the signing of the new contract must take place in the same simultaneous act. The proportional part of the installments corresponding to an increase in the principal intended for purposes other than the acquisition is not deductible.
The DGT's position has moved from allowing the integration of the entire cancellation at the time of the transfer (V2308-19) to focusing the analysis on the continuity of the primary residence (V1409-21). Subsequently, the doctrine has consolidated around the simultaneity of the cancellation and the new contracting to preserve the deduction in novation or substitution operations.
Turning points
Establishes that amounts paid after losing the status of primary residence are not deductible, limiting the application of the cancellation integration criterion.
Introduces the clarification that novation or substitution does not exhaust the right to the deduction as long as the new loan amortizes the previous one and is carried out in a single act.
Analysis based on 9 of 9 rulings with a stated position. Updated 29 September 2026.