Regulations: Transitional provision eighteenth Law Personal Income Tax ; Twelfth transitional provision Regulation
Law 16/2012, of December 27, which adopts various tax measures aimed at consolidating public finances and promoting economic activity ( BOE of 28) eliminated , with effect from January 1, 2013, the deduction for investment in primary residence.
However, for taxpayers who were deducting for habitual residence prior to January 1, 2013 (except for contributions to housing accounts), the aforementioned Law 16/2012 introduced a transitional regime that allows them to continue enjoying the deduction in the same terms and with the same conditions existing as of December 31, 2012.
To whom does the transitional regime apply?
Only the following taxpayers will have the right to apply the deduction for investment in habitual residence in 2021 for the amounts paid in the period:
Taxpayers who had acquired their habitual residence prior to January 1, 2013, or after said date, provided that in the latter case amounts had been paid for its construction before January 1, 2013 and the completion of the works would have been produced within the deadlines established by the applicable Personal Income Tax regulations.
The “construction of habitual residence” modality has been integrated together with the “acquisition of habitual residence” in the Personal Income Tax declaration for the 2021 financial year. The reason is that on March 19, 2021, the four-year period ended, extendable for another four additional years (to which 78 more days are added, corresponding to the period between March 14 and May 30, 2020 during the that the calculation of the deadlines was suspended, in accordance with the provisions of the ninth Additional Provision of Royal Decree-Law 11/2020), in which the taxpayer had to finish the construction of his habitual residence and legally acquire housing to continue being entitled to the transitional regime of this deduction.
As of that date, the right to apply the transitional regime continues with respect to the amounts that the taxpayer continues to pay in relation to the construction, when external financing has been used, as long as the requirements for completion on time, acquisition, occupation are met. and effective and permanent residence.
In these cases, taxpayers must include all the amounts paid in the year within the “Acquisition and/or construction of the habitual residence of the habitual residence” in Annex A.1 of the declaration, indicating the date of the deed of acquisition or new construction of the home.
Taxpayers who had paid amounts prior to January 1, 2013 for rehabilitation or expansion works on their habitual residence, provided that the aforementioned works are completed before January 1, 2017.
Taxpayers who have paid amounts to carry out works and installations to adapt the habitual residence of people with disabilities prior to January 1, 2013, as long as the aforementioned works or installations are completed before January 1, 2017. .
In any case, in order to apply the transitional deduction regime, it is required that taxpayers have made the deduction for said home in 2012 or in previous years, unless they have not been able to make it yet because the amount invested in it has not exceeded the amounts invested in previous homes, to the extent that they had been subject to deduction and, where applicable, the amount of capital gains exempt from reinvestment.
How the deduction is applied in the transitional regime
The eighteenth transitional provision of the Income Tax Law maintains, for taxpayers who are entitled to the transitional regime, the application of the regulation contained in articles 67.1, 68.1, 70.1, 77.1, and 78 of the Personal Income Tax Law in its wording in force on December 31, 2012, without prejudice to the deduction percentages that, in accordance with the provisions of Law 22/2009, have been approved by the Autonomous community.
Likewise, the new twelfth transitional provision of the Personal Income Tax Regulation provides for the application of the provisions of Chapter I of Title for taxpayers who are entitled to the transitional regime of the deduction for investment in habitual residence. IV, in the wording in force as of December 31, 2012.
Obligation to submit a declaration
Taxpayers who wish to exercise the right to the deduction for investment in habitual residence of the transitional regime will be obliged, in any case, to submit a declaration for Personal Income Tax .