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Practical Income Manual 2022.

For investment in habitual residence that is considered protected and for young people

Regulations: Articles 9 and 2; Additional Provision First Law 5/2021, of October 20, on Assigned Taxes of the Autonomous Community of Andalusia

Deduction amount

5 percent of the amounts paid in the tax period for the acquisition or rehabilitation of the property that constitutes or will constitute the habitual residence of the taxpayer.

Regarding the concept of habitual residence, see article 2 of Law 5/2021, of October 20, on Assigned Taxes of the Autonomous Community of Andalusia. Likewise, keep in mind that the concept of habitual residence, in accordance with the first Additional Provision of the aforementioned Law 5/2021, is that established by articles 54.1 and 2 and 55.2 c) of the Personal Income Tax Regulations , in force as of December 31, 2012, which is discussed in the section “ General conditions and requirements ” of the heading “Deduction for investment in habitual residence. Transitional regime" of Chapter 16.

See in the "Deduction for investment in habitual residence: Transitional regime" of Chapter 16 of this Manual, the concept of acquisition of habitual residence within the section " Acquisition, construction, rehabilitation and expansion of habitual residence ".

Keep in mind that the construction and expansion of the home are NOT assimilated to the acquisition of the home, so the amounts paid for these concepts do not give the right to practice the deduction.

  • Specific requirements for the application of the deduction

    • To be entitled to the deduction, one of the following conditions must exist on the tax accrual date:

      1. That the home has the classification of protected in accordance with the regulations of the Autonomous Community of Andalusia

      2. That the purchaser is under 35 years of age. In the case of joint taxation, the age requirement must be met by at least one of the spouses or, where applicable, the father or mother in the case of single-parent families.

        For the concept of a single-parent family, see article 4 of Law 5/2021, of October 20, on Assigned Taxes of the Autonomous Community of Andalusia.

    • That the sum of the general and savings tax bases , boxes [0435] and [0460] of the declaration, do not exceed the following amounts:

      • - 25,000 euros in individual taxation.

      • - 30,000 euros in joint taxation.

    Maximum base of the deduction

    • The basis of this deduction will be constituted by 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, interest, the cost of variable interest rate risk hedging instruments for 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 by the application of the aforementioned instrument.

    • The maximum base of this deduction will be 9,040 euros, in accordance with the requirements and circumstances provided for in the state personal income tax regulations for the deduction for investment in habitual residence in force on December 31, 2012.

    Other conditions for the application of the deduction

    • In cases of marital annulment, divorce or judicial separation , the taxpayer may continue to take this deduction, for the amounts paid in the tax period for the acquisition of what was during the validity of the marriage their habitual residence, as long as they continue to have this condition for their joint children and the parent in whose company they remain.

    • When a habitual residence is acquired having enjoyed the deduction for the acquisition of other previous habitual residences , no deduction may be made for the acquisition or rehabilitation of the new one as long as the amounts invested in it do not exceed those invested in the previous ones, to the extent that they would have been subject to deduction.

      When the disposal of a habitual residence would have generated a capital gain exempt from reinvestment , the deduction base for the acquisition or rehabilitation of the new one will be reduced by the amount of the capital gain to which the rollover exemption applies. 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 capital gain exempt from reinvestment.

    • Likewise, will be considered rehabilitation of habitual residence which meets the requirements and circumstances established by the state regulations of Personal Income Tax in force on December 31, 2012, specifically, the works carried out there that meet any of the following requirements:

      1. That these are subsidized actions regarding housing rehabilitation in the terms provided for in Royal Decree 106/2018, of March 9, which regulates the State Housing Plan 2018-2021, or Plan that replaces it.

      2. That have as their main objective the reconstruction of the home through the consolidation and treatment of the structures, facades or roofs and other similar ones, provided that the overall cost of the rehabilitation operations exceeds 25% of the acquisition price if this had been carried out. during the two years immediately prior to the start of the rehabilitation works or, otherwise, the market value of the home at the time of said start. For these purposes, the proportional part corresponding to the land will be deducted from the acquisition price or market value of the home.