Transitional scheme

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

Law 16/2012, of December 27, which adopts various tax measures aimed at consolidating public finances and promoting economic activity ( BOE of December 28) eliminated, with effect from January 1, 2013, the deduction for investment in habitual 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 eligible to apply the deduction for investment in primary residence in 2024 for amounts paid during the period:

Taxpayers who had acquired their habitual residence before 1 January 2013, or after that date, provided that in the latter case amounts had been paid for the construction of the same before 1 January 2013 and the completion of the works had occurred within the deadlines established by the applicable IRPF regulations.

In any case, it will be necessary for the taxpayer to have applied the deduction in relation to the amounts paid for the acquisition or construction of said dwelling in a tax period accrued prior to January 1, 2013, except in those cases in which the taxpayer could not apply it because the accumulated amount invested in it had not exceeded (as of December 31, 2012) the amounts invested in previous dwellings, to the extent that they had been subject to deduction, and, where applicable, the amount of exempt capital gains due to reinvestment.

Note: the “construction of the habitual residence” modality ceased to be possible in the year 2022 when the four-year period had concluded, plus the extension, where applicable, of another four additional years and adding the 78 days corresponding to the period between March 14 and May 30, 2020 during which the calculation of periods provided for in the ninth Additional Provision of Royal Decree-Law 11/2020 was suspended.

According to the above, the taxpayer must have completed the construction of his or her habitual residence and have legally acquired it before March 20, 2021 to continue to be entitled to the transitional regime of this deduction. However, the right to apply the transitional regime continues with respect to the amounts that the taxpayer continues to pay in relation to the construction or acquisition, when external financing has been used, provided that the requirements of completion on time, occupation and effective and permanent residence are met.

In these cases, taxpayers must include the amounts paid in the year under the category "acquisition and/or construction of the habitual residence" in Annex A.1 of the declaration , indicating the date of the deed of acquisition or new construction of the residence.
Taxpayers who had paid amounts prior to January 1, 2013 for renovation or extension work on their habitual residence, provided that the aforementioned works had been completed before January 1, 2017.
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 were completed before January 1, 2017.

Attention: The Resolution of the Central Economic-Administrative Court (TEAC) of April 22, 2024, Claim number 00/00765/2023, issued in an extraordinary appeal for the unification of criteria, has established the criteria for the application of the deduction for investment in habitual residence in the years or periods after 2012 by taxpayers who had acquired their habitual residence before January 1, 2013 and who had not practiced or recorded such deduction in any of the years or periods prior to 2013 since they acquired it. As a consequence, those who had not practiced or recorded the deduction before 2013, may apply said deduction in the following cases: ##

When they have not filed a declaration because they are not obliged to do so due to the income obtained.
When they had not practiced or recorded the deduction before 2013 because they were required to file a tax return based on income and had filed it, they had not had the full amount in any of those periods to be able to apply it.

On the other hand, taxpayers who are required to file a tax return based on income and who have filed it, but who have not claimed the deduction before 2013, despite having had full amounts to which it could be applied during some of those periods, will not be able to apply the deduction for investment in a primary residence.

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 required, in any case, to file a declaration for the IRPF .