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Practical Income Manual 2019.

Concept of construction and expansion of the habitual residence

Concept of construction of habitual residence

For the purposes of the deduction, construction of a habitual residence is considered when the taxpayer directly pays the expenses derived from the execution of the works, or delivers amounts on account to the promoter thereof, provided that they are completed within a period of no more than four years from the beginning of the investment.

  1. To calculate the four-year period, the following must be taken into account:

    1. Investment start date

      The calculation will begin from the date on which the first amount for which the deduction is made for investment in habitual residence is satisfied or, where applicable, for any amount that the taxpayer delivers from the balance of the open housing account. By himself.

    2. Completion date of works:

      • In the cases of self-promotion or self-construction , the completion date must be able to be proven by any legally valid means of proof, the assessment of which corresponds to the management and inspection bodies of the Tax Administration. In the absence of proof, the date of the deed of declaration of new construction will be taken.

      • In the case of payments to the promo r, the completion date will be that of the legal acquisition of the home, that is, when, once the purchase and sale contract has been signed, the tradition or delivery of the thing sold, without the fact of completion of the home being sufficient.

      If the works are not completed within four years, the right to deductions made for the construction will be lost and the situation must be regularized. 

  2. Extension of the deadline

    Notwithstanding the above, the four-year term may be extended , without losing the right to deductions, in the following situations:

    1. Competition situation of the promoter of the works.

      In these cases, the deadline is automatically extended by another four years, provided that the taxpayer who is obliged to file a declaration for IRPF , in the tax period in which the initial deadline was missed , accompany it with both the supporting documents that prove your investments in housing and any document justifying whether the aforementioned situation has occurred.

    2. When other exceptional circumstances occur that are not attributable to the taxpayer, other than the above, that lead to a stoppage of the works.

      In these cases, the taxpayer may request an extension of the deadline from the Tax Administration.

      The request must be submitted to the Delegation or Administration of the State Tax Administration Agency corresponding to your tax domicile, within thirty days following the date of non-compliance with the deadline. The request must include both the reasons that caused the failure to comply with the deadline and the period of time considered necessary to complete the construction works, which may not exceed four years.

      In view of the application submitted and the documentation provided, the head of the Administration or Delegation of the State Tax Administration Agency will decide both on the origin of the requested extension and with respect to the extension period, which will not have to be adjusted. necessarily the one requested by the taxpayer. The extension granted will begin to be counted from the day immediately following the day on which the non-compliance occurred.

      Requests to extend the deadline that are not expressly resolved within three months may be deemed rejected.

Remember: For the home to be considered habitual, it must be occupied by the taxpayer within a maximum period of twelve months from the completion of the works, unless prevented by any of the exceptional circumstances discussed above in the heading "Concept of habitual residence." in this same Chapter.

Concept of expansion of habitual residence

An extension of a habitual residence is understood to be the increase in its habitable surface, produced by enclosing an uncovered part or by any other means, permanently and during all times of the year. Thus, within this concept it is understood to include both the acquisition of an adjacent home and a home located on an immediately higher or lower level, in order to join it to the habitual home and thus increase its habitable surface.