Common requirements for the application of deductions

Base and maximum limit of the deduction

The basis and maximum limit of the deductions provided for in the previous sections will be 9,040 euros , in accordance with the requirements and circumstances provided for in the state regulations of Personal Income Tax for the deduction for investment in habitual housing in force on December 31, 2012 and will consist of the amounts paid for the acquisition or rehabilitation of the home, including the expenses incurred that have been borne by the purchaser and, in the case of external financing, the amortization, interest, the cost of the hedging instruments for the variable interest rate risk of mortgage loans regulated in article nineteen of Law 36/2003, of November 11, on economic reform measures, and other expenses derived therefrom. In the event of application of the aforementioned hedging instruments, the interest paid by the taxpayer will be reduced by the amounts obtained from the application of the aforementioned instrument.

Other conditions for the application of the deduction

• In the event of annulment of marriage, divorce or legal separation, the taxpayer may continue to make these deductions for the amounts paid in the tax period for the acquisition of what was his or her habitual residence during the marriage, provided that this condition continues to apply to the common children and the parent in whose company they remain.

• When a primary residence is acquired after having benefited from the deduction for the acquisition of other previous primary residences , no deduction may be made for the acquisition or rehabilitation of the new residence as long as the amounts invested in it do not exceed those invested in the previous residences, to the extent that they were subject to deduction.

  When the sale of a habitual residence has generated an exempt capital gain due to reinvestment , the deduction base for the acquisition or rehabilitation of the new residence will be reduced by the amount of the capital gain to which the exemption for reinvestment is applied. In this case, no deduction may be made for the acquisition of the new one as long as the amounts invested in it do not exceed both the price of the previous one, to the extent that it has been subject to deduction, and the exempt capital gain from reinvestment.

• Likewise, will be considered a rehabilitation of a habitual residence that meets the requirements and circumstances established by the state regulations of Personal Income Tax in force on December 31, 2012, specifically, the works carried out therein that meet any of the following requirements:

  1. That these are subsidized actions in the field of housing rehabilitation under the terms provided for in Royal Decree 106/2018, of March 9, which regulates the State Housing Plan 2018-2021, or the Plan that replaces it.

  2. Those whose main objective is the reconstruction of the dwelling by consolidating and treating the structures, facades or roofs and other similar works, provided that the overall cost of the rehabilitation operations exceeds 25% of the purchase price if it had been carried out during the two years immediately prior to the start of the rehabilitation works or, otherwise, the market value of the dwelling at the time of said start. For these purposes, the proportional part corresponding to the land will be deducted from the purchase price or market value of the home.

Note: The deductions for investment in protected habitual housing and for investment in habitual housing by young people discussed above are incompatible with each other.