For investment in the habitual residence of young people under 36 years of age

Regulations: Article 32.11 Law 10/2017, of October 27, consolidating the legal provisions of the Autonomous Community of La Rioja regarding own taxes and transferred taxes.

Amount and requirements for applying the deduction

• 15 percent of the amounts paid in the fiscal year for the acquisition, construction, extension or rehabilitation of the taxpayer's habitual residence, provided that the following requirements are met:

  1. That the home is located in the territory of the Autonomous Community of La Rioja.
  2. That taxpayer is under 36 years of age on the tax accrual date (normally December 31).
  3. That the home constitutes or will constitute the habitual residence of the taxpayer .
  4. That the property must have been acquired after January 1, 2013 or the rehabilitation started after that date

  5. That the general taxable base subject to taxation according to article 50 of the Personal Income Tax Law does not exceed the following amounts:

     • 18,030 euros in individual declaration.
     • 30,050 euros in joint declaration.

     Provided that, in addition, the taxable savings base subject to taxation according to article 50 of the Personal Income Tax Law does not exceed 1,800 euros .

     The amount of the general taxable base subject to taxation according to article 50 of the Personal Income Tax Law is the one reflected in box [0500] of the declaration.

     For its part, the amount of the taxable savings base subject to taxation according to article 50 of the Personal Income Tax Law is the one reflected in box [0510] of the declaration.

Deduction base

• The basis of this deduction will consist of the amounts paid for the acquisition or rehabilitation of the home, including the expenses incurred that have been borne by the purchaser and, in the case of external financing, the amortization, the interest, the cost of the instruments for hedging the variable interest rate risk of mortgage loans regulated in article nineteen of Law 36/2003, of November 11, on economic reform measures, and other expenses derived therefrom.

  In the event of application of the aforementioned hedging instruments, the interest paid by the taxpayer will be reduced by the amounts obtained from the application of the aforementioned instrument.

• The maximum annual base of this deduction will be 9,000 euros.

Other conditions for the application of the deduction

• The habitual residence is understood to be the one in which the taxpayer resides for a continuous period of three years. However, the dwelling will be deemed to have had that character when, despite the said period not having elapsed, the taxpayer dies or circumstances occur that necessarily require the change of dwelling, such as marital separation, job transfer, obtaining a first job or a more advantageous job or other similar circumstances.

• The concept of acquisition will be that defined in article 58 bis of Law 10/2017, of October 27, which consolidates the legal provisions of the Autonomous Community of La Rioja regarding own taxes and transferred taxes.

  For these purposes, the construction or expansion of a home is considered to be the acquisition of a home, in the following terms:

  • Extension of a dwelling, when there is an increase in its habitable surface area, by enclosing the uncovered part or by any other means, permanently and during all times of the year.
  • Construction, when the taxpayer directly covers the expenses derived from the execution of the works, or delivers amounts on account to the promoter of said works, provided that they are completed within a period not exceeding four years from the start of the investment.

  On the other hand, the following will not be considered as housing acquisition:

  1. The costs of maintenance or repair. For these purposes, the following will be considered repair and maintenance expenses:
     • Those carried out regularly for the purpose of maintaining the normal use of material assets, such as painting, plastering or repairing facilities.
     • Those for replacing elements, such as heating systems, elevators, security doors or others.
  2. The best.
  3. The acquisition of parking spaces, gardens, parks, swimming pools and sports facilities and, in general, annexes or any other element that does not constitute the home itself, provided that they are acquired independently of it. Parking spaces acquired with these will be treated as homes, with a maximum of two.
• The concept of rehabilitation must meet the conditions established in article 55 of the Personal Income Tax Regulations , in its current version as of December 31, 2012.

• When a primary residence is acquired after having benefited from the deduction for the acquisition of other previous primary residences, no deduction may be made for the acquisition or rehabilitation of the new residence as long as the amounts invested in it do not exceed those invested in the previous residences, to the extent that they were subject to deduction.

  When the sale of a primary residence has generated an exempt capital gain through reinvestment, the deduction base for the acquisition or renovation of the new residence will be reduced by the amount of the capital gain to which the exemption for reinvestment is applied. In this case, no deduction may be made for the acquisition of the new one as long as the amounts invested in it do not exceed both the price of the previous one, to the extent that it has been subject to deduction, and the exempt capital gain from reinvestment.

• In order to apply this deduction, regardless of the taxpayer who benefits from the measure, it is required that the verified amount of the taxpayer's assets at the end of the tax period exceeds the value shown by its verification at the beginning of the same by at least the amount of the investments made , without taking into account interest and other financing costs.

  For these purposes, increases or decreases in value experienced during the tax period by assets that at the end of the period continue to form part of the taxpayer's assets will not be computed, nor will the increase in assets obtained by taxable events subject to the Inheritance and Gift Tax.

Incompatibility

This deduction is incompatible with the regional deductions "For amounts invested in renovation works on the habitual residence" and "For amounts invested in the acquisition or construction of habitual residence for young people" provided for in sections a) and b) of transitional provision 1 of Law 10/2017 discussed below, for those young people who had acquired or renovated their home before January 1, 2013 .

When the above circumstance occurs, the taxpayer will continue to apply the regional deductions "For amounts invested in rehabilitation works on the habitual residence" and "For amounts invested in the acquisition or construction of habitual residence for young people", which correspond, and the present deduction for investment in habitual residence of young people under 36 years of age cannot be applied.