On June 30, the deadline for submitting the Income Tax returns corresponding to this year’s campaign ends. Mortgages are deductible, but not for everyone. There are a series of conditions and limits that must be met so that the deduction for investment in habitual residence can be applied. We tell you what they are.
When do you deduct the mortgage?
It only deducts for taxpayers who bought the property and formalized the mortgage loan before January 1, 2013. The reason is that this deduction was abolished for all those who became buyers from that date.
In addition, other requirements must be met:
- The destination of the dwelling must be that of habitual residence.
- That the deduction has already been applied to deduct the mortgage in 2012 or in the previous years.
If these two conditions are met, then the deduction can be applied on a maximum basis of 9,040 euros per year, so the taxpayer can be deducted up to 1,356 euros.
What if two holders are listed in the contract?
If they make the joint declaration, the deduction is applied on the maximum of 9,040 euros.
In the case of making the declaration separately, each holder may deduct their part of the mortgage by applying the maximum deduction, that is, 18,080 euros between the two.
And in the case of mortgages that have been modified?
According to the Tax Agency, when the conditions of a mortgage loan are changed, its purpose (buying the property) is not modified. So taxpayers who have modified the mortgage may continue to benefit from the deduction for acquisition of habitual residence. It does not matter if they have made an early repayment, a novation, a creditor subrogation, etc. There is only one but and it is for those who applied for an extension of the loan.
In these cases, the allowance only affects the amortized part of the initial credit.
What about the second home?
Owners of second homes must pay taxes on them. But in the event that the property is rented throughout the year, expenses such as repairs, community of owners, IBI, etc. can be deducted.
Other mortgage expenses that can be deducted
The expenses associated with the purchase of the home can be deducted:
- Monthly fees. That is, the money paid throughout the year to amortize the loan.
- The opening fee charged to us by the bank.
- Expenses associated with the contracting of linked insurance: life, home, etc.
- The costs of writing the sale.
- The costs associated with the cancellation of the loan.
- The fees of the notary, the agency or the registration fees.
Is the legislation the same in Navarre and the Basque Country?
In these communities the legislation changes. In the Basque Country you can deduct the mortgage regardless of the date of purchase of the property. The deduction reaches 18% in the three provinces but the maximum changes: in Vizcaya you can not deduct more than 1,955 euros, in Guipúzcoa no more than 1,530 euros (or 2,160 euros if the purchase was made before January 1, 2012) and in Álava the maximum is 2,300 euros.