Concept of construction and expansion of the habitual residence

Concept of construction of habitual housing

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 pays amounts on account to the promoter of the same, provided that they are completed within a period of no more than four years from the start 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 for investment in habitual residence is applied is paid or, where applicable, from any amount that the taxpayer delivers from the balance of the housing account opened by himself.

   2. Completion date of works:

      • In the case of self-promotion or self-construction , the completion date must be able to be accredited by any legally valid means of proof, the assessment of which is the responsibility of 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 developer r, the completion date will be the date of the legal acquisition of the property, that is, when, after the contract of sale has been signed, the transfer or delivery of the thing sold is carried out, without the fact of completion of the property being sufficient.

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

2. Extension of the deadline

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

   1. Status of bankruptcy of the promoter of the works.

      In these cases, the deadline is automatically extended by another four years, provided that the taxpayer who is required to file a declaration for the IRPF , in the tax period in which the initial deadline was not met, accompanies it with supporting documents proving his/her investments in housing and any document justifying that the aforementioned situation has occurred.

   2. When other exceptional circumstances not attributable to the taxpayer, other than the above, occur, which lead to the suspension of the works.

      In these cases, the taxpayer may request an extension of the deadline from the tax authorities.

      The application 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 application must include both the reasons for the failure to comply with the deadline and the period of time considered necessary to complete the construction work, 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 Agency for Tax Administration will decide both on the appropriateness of the requested extension and on the extension period, which will not necessarily have to be in accordance with that requested by the taxpayer. The extension granted will begin to be counted from the day immediately following the day on which the breach occurred.

      Requests for an extension of the deadline that are not expressly resolved within three months may be deemed to have been rejected.

Remember: For the dwelling 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 this is prevented by any of the exceptional circumstances discussed above in the section "Concept of habitual dwelling" in this same Chapter.

Concept of extension of habitual residence

An extension to a habitual residence is understood to be an increase in its habitable surface area, produced by enclosing the uncovered part or by any other means, permanently and during all times of the year. Thus, this concept includes both the acquisition of an adjoining dwelling and a dwelling located on an immediately higher or lower level, with the aim of joining it to the habitual dwelling and thus increasing its habitable surface area.