Transitional scheme

Regulations: Eighteenth transitional provision Law IRPF ; Twelfth transitional provision Regulation

Law 16/2012, of December 27, which adopts various tax measures aimed at consolidating public finances and promoting economic activity ( BOE of the 28th) eliminated, with effect from January 1, 2013, the deduction for investment in primary residence.

However, for taxpayers who were deducting for their habitual residence prior to January 1, 2013 (except for contributions to housing accounts), the aforementioned Law 16/2012 introduced a transitional regime that allows them to continue enjoying the deduction under the same terms and with the same conditions existing on December 31, 2012.

To whom does the transitional regime apply?

Only the following taxpayers will be entitled to apply the deduction for investment in habitual residence for the amounts paid in the period in question:

1. Taxpayers who had acquired their habitual residence or paid amounts for its construction prior to January 1, 2013.
2. Taxpayers who have paid amounts prior to January 1, 2013 for renovation or extension work on their habitual residence, provided that the aforementioned works are completed before January 1, 2017.

3. Taxpayers who have paid amounts for the execution of works and installations to adapt the habitual residence of people with disabilities prior to January 1, 2013, provided that the aforementioned works or installations are completed before January 1, 2017.

In any case, in order to apply the transitional deduction regime, taxpayers must have applied the deduction for said dwelling in 2012 or in previous years, unless they have not been able to apply it yet because the amount invested in it has not exceeded the amounts invested in previous dwellings, to the extent that they have been subject to deduction and, where applicable, the amount of exempt capital gains due to reinvestment.

Remember : Unlike what happens in cases of acquisition, construction, rehabilitation or extension of a habitual residence, taxpayers who, prior to January 1, 2013, had deposited amounts in housing accounts intended for the first acquisition or rehabilitation of a habitual residence were excluded from the benefits granted by the transitional regime.

How the deduction is applied in the transitional regime

The eighteenth transitional provision of the Personal Income Tax Law maintains, for taxpayers who are entitled to the transitional regime, the application of the regulations contained in articles 67.1, 68.1, 70.1, 77.1, and 78 of the Personal Income Tax Law in its version in force on December 31, 2012, without prejudice to the deduction percentages that, in accordance with the provisions of Law 22/2009, have been approved by the Autonomous Community.

Likewise, the new twelfth transitional provision of the Personal Income Tax Regulation provides for taxpayers who are entitled to the transitional regime of the deduction for investment in habitual residence, the application of the provisions of Chapter I of Title IV, in the version in force on December 31, 2012.

Obligation to file a declaration

Taxpayers who wish to exercise the right to the deduction for investment in habitual housing under the transitional regime will be obliged, in any case, to file a declaration for the IRPF