Verification of the financial situation: effective deductible investment base
Regulations: Art. 70.1 Law Personal Income Tax , drafted on 12-31-2012
Without prejudice to the existence of maximum deduction bases for the different investment concepts examined below, the effective enjoyment of the deduction for investment in habitual residence is conditional on the proven amount of the taxpayer's assets at the end of the tax period exceeding of the value shown by its verification at the beginning of the same, at least in the amount of the investments made, without computing interest and other financing expenses.
The verification of the financial situation aims to ensure that investments in habitual residence and in new or recently created companies with the right to deduction are made with the income generated in the period, preventing deductions from being made with respect to amounts that correspond to income. generated in previous periods.
The comparison of the assets at the end and at the beginning of the tax period will be carried out based on the acquisition value of all the assets and rights that make up the taxpayer's assets, including those exempt from the Wealth Tax, without taking into account, therefore, the variations in value experienced during the tax period by the assets that at the end of the period continue to form part of the taxpayer's assets.
Notwithstanding the above, in the case of rehabilitation or expansion of the primary home , the investments made during the year will be valued in the final assets independently of the home.
Similarly, in the case of works and installations to adapt the habitual residence for reasons of disability, the amounts paid to cover these works must be included in the valuation of the final assets of the tax period , both in the event that the latter are considered an investment (those made on the taxpayer's habitual residence) and expenses (those made on the home rented or subleased by the taxpayer).
In the event that the increase in assets at the end of the tax period was less than the amount invested or the amount of the adaptation works and installations carried out for reasons of disability, without counting within Of these, interest and other financing expenses, the deduction can only be made for investment in housing or for works and installations to adapt it to the amount by which the taxpayer's assets have increased, increased in interest and other financing expenses. satisfied financing.
Mr. AGE acquired his habitual residence on November 30, 2006 for a total price of 150,000 euros. This home was financed in part with a mortgage loan in the amount of 120,000 euros.
In fiscal year 2022, Mr. AGE He has invested 9,000 euros in his habitual residence, of which 1,000 euros correspond to interest on the loan and the rest to repayment of the principal.
The taxpayer's assets, as of January 1, 2022, consisted of the home; shares in an investment fund valued at 55,200 euros; a bank account of 5,700 euros and a car acquired in 2021 for an amount of 25,242 euros and whose current valuation is estimated at 21,035 euros. The amount of the loan outstanding on that date was 95,000 euros.
The assets, as of December 31, 2022, consist of the home, the investment funds whose net asset value as of that date amounts to 52,200 euros; 3,000 euros in the bank account and the car whose value, on that date, is estimated at 15,625 euros.
In 2022 you will obtain work income amounting to 54,000 euros.
Determine if the requirement of a proven increase in equity in the amount of the investment is met.
a. Final equity (12-31-2022) = 66,000
Housing (150,000.00 – 87,000.00) = 63,000
Bank account: =3,000
b. Initial equity (01-01-2022) = 60,700
Housing (150,000.00 – 95,000.00) = 55,000
Bank account = 5,700
Increase in assets = 5,300
Investment made in 2022 = 9,000
Effective deductible investment base (increase in assets without computing interest and other financing expenses) =5,300
Note to example:
The interest on the loan (1,000 euros) must be added to the effective deductible investment base (5,300 euros) and the result (6,300 euros) will be the amount of the deduction base that corresponds to the taxpayer in fiscal year 2022.
Likewise, indicate that the solution of the example does not take into account the car or the investment funds, since they continue to form part of the taxpayer's assets at the end of the tax period.