Other conditions for the application of the deduction
To determine the basis of the deduction, that is, the amounts invested with the right to deduct, the following special rules must be taken into account, in addition to the requirements indicated above:
When a habitual residence is acquired having enjoyed the deduction for the acquisition of other previous habitual residences , no deductions may be made for the acquisition, rehabilitation or extension of the new residence until the amount invested in it exceeds the amounts invested in the previous ones that would have enjoyed a deduction.
When the transfer of the habitual residence would have generated a capital gain exempt from reinvestment , the deduction base for acquisition, rehabilitation or expansion of the new habitual residence will be reduced by the amount of the exempt capital gain, with no deductions being possible until the amount invested exceeds the sum of the acquisition price of the previous homes, to the extent that it would have enjoyed a deduction, plus the exempt capital gain in the previous.
Likewise, when the transfer of the habitual residence would have generated a capital gain partially not subject by application of the ninth transitional provision of the Personal Income Tax Law (since the acquisition date was prior to December 31, 1994), the deduction for the acquisition of the new home cannot begin until the amount invested in it does not exceed the amounts invested in the previous habitual homes, to the extent in which they would have enjoyed a deduction, plus the capital gain that is exempt through reinvestment.
The application of the reducing or abatement coefficients to determine the part of the capital gain obtained in the transfer of homes acquired before December 31, 1994 that is not subject to IRPF by application of the provisions of the ninth transitional provision of the Personal Income Tax Law is discussed in more detail in Chapter 11.
Remember: Taxpayers who have paid amounts for the construction of their habitual residence prior to January 1, 2013 and have completed the works will have the right to continue making the deduction under the "acquisition of habitual residence" modality when they have used external financing, and meet the requirements for completion on time, occupation and effective and permanent residence provided for it.