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Practical Income Manual 2021.

Principal Residence item

Regulations: Articles 68.1 3 and 4 f) Law Personal Income Tax , drafted on 12-31-2012; 54 and 55.2 Regulations, drafted on 12-31-2012

Primary residence, for the purposes of this deduction, is understood to be a building that meets the following requirements:

1. That constitutes the residence of the taxpayer for a continuous period of at least three years

However, it will be understood that the home was considered habitual when, despite the three years indicated not having elapsed, the death of the taxpayer occurs or other circumstances arise that necessarily require the change of address, such as celebration of marriage, marital separation, job transfer, obtaining first job, change of job, or other similar justified circumstances.

It will also be understood as a circumstance that necessarily requires a change of residence. the fact that the previous one is inadequate as a consequence of the disability of the taxpayer himself or of his spouse or a relative, in a direct or collateral line, by blood or by affinity, up to the third degree inclusive, who lives with him.

The period of three years is for the purposes of classifying the home as habitual residence, without it being necessary for said period to have elapsed to begin making the corresponding deduction in the terms discussed below. However, if the three-year residence period is not met once the home has been inhabited, the deductions made would have to be refunded, unless one of the aforementioned cases occurs.

Note: For the purposes of the tax benefits related to the habitual residence, in the cases of acquisition of the property pro indiviso, if the taxpayer had resided uninterruptedly in the residence since its acquisition, for the calculation of the three-year period to determine if the Whether or not the property is considered a habitual residence, it must be dated to the date on which the acquisition of the undivided share occurred, without the date on which the remaining share was acquired until 100% of the ownership is complete for these purposes. of the common thing. See in this regard the Resolution of TEAC of September 10, 2015, Claim number 00/06331/2013, relapse in extraordinary appeal for unification of criteria.

2. That the taxpayer inhabits it effectively and permanently, within a period of no more than twelve months, counted from the date of acquisition or completion of the works.

However, it will be understood that the home does not lose its habitual character, despite the fact that occupancy does not occur within a period of twelve months, in the following cases:

  • When the death of the taxpayer occurs or any other of the circumstances mentioned in number 1 above occur (celebration of marriage, marital separation, job transfer, etc.) that prevent the occupation of the home.

  • When the home is inadequate due to the disability suffered by the taxpayer, his spouse or relatives, in a direct or collateral line, by blood or by affinity, up to the third degree inclusive, who live with him.

  • When the taxpayer enjoys a habitual residence due to position or employment and the acquired home is not intended for use. In this case, the twelve-month period shall start to run from the date of termination of the relevant post or employment.

When any of the circumstances indicated in this number or the previous one occur, determining the change of address or preventing the occupation of the home, the deduction will be made until the moment in which said circumstances occur. As an exception, when the taxpayer has a habitual residence due to position or employment, deductions may continue to be made for this concept as long as said circumstance continues and the home is not used.

3. Concepts that are considered habitual residence, for the purposes of the deduction

  • The annexes or any other element that does not constitute the home itself, such as gardens, parks, swimming pools and sports facilities, provided that they are purchased together with the home.

  • The parking spaces acquired jointly with this one, with a maximum of two . For the purposes of the deduction, garage spaces that meet the following requirements are considered purchased with the home:

    1. That they are in the same building or real estate complex and are delivered at the same time.

    2. That its transmission be carried out in the same act, even if it is in a different document.

    3. That they are used or are ready to be used by the acquirer, that is, that their use is not transferred to third parties.