The rise of the Euribor, of almost four percentage points in the last year, has led to a notable increase in the installments of variable mortgages. To cushion the impact that the increase may have on the household budget, many families have chosen to renegotiate the conditions of the mortgage loan or change the bank, so the question may arise as to whether these modifications may affect the income statement .
"In some cases it can affect," confirms José María Mollinedo, general secretary of Gestha, a union of technicians from the Ministry of Finance. One of the most common is when the capital of the mortgage is increased and there is a right to a deduction for investment in a habitual residence, that is, if the property was purchased before January 1, 2013, when this deduction was abolished.
For example, if the extension of the loan was carried out in 2022, even if it was to invest the money in improving the property, these taxpayers will not have the right to deduct the amortized capital and the interests that were paid in that year corresponding to the additional amount of the loan. In this sense, said amount "will not be capable of integrating the deduction base" in the proportional part that corresponds to the increase in the main loan, "which would have been used to finance other things, different from the purchase of the home itself." , according to the Tax Agency.
However, in the event that the mortgage extension occurs before January 1, 2013 and the money is used to increase the surface area of the home or to rehabilitate it, the amount for which the loan was extended could be deducted, up to 15% of the annual fees up to a limit of 9,040 euros. A casuistry that occurs above all "in single-family homes," according to Mollinedo.
Another case that may raise doubts is when a mortgage loan is changed to a bank –a creditor subrogation, in legal terms- and the mortgaged home was acquired before the date on which the deduction was abolished. Even if the mortgage is canceled and a new one is contracted with another bank to finance the same home, the expenses inherent to the new loan would also be deductible. "What conditions the deduction is the date of acquisition of the property, but not the financing", they clarify from Gestha, so this circumstance would not affect the declaration.
In the event of marital separation, when the home is awarded to one of the spouses and the latter assumes the entire mortgage payment, this circumstance does not generate Personal Income Tax (IRPF) tax either. In addition, the spouse who keeps the property will keep the home investment deduction if he or she was entitled to it before the breakup of the couple. But he will have to pay taxes on the capital gain "when the property is sold," Mollinedo clarifies.
Finally, in the event of having the right to a deduction for habitual residence and having to refinance the mortgage of the property, it will not have any repercussions on the personal income tax and the loan may continue to be deducted -15% of the total annual installments, up to a limit of 9,040 euros-.
