For acquisition or rehabilitation of the habitual residence in rural areas

Regulations: Art. 11 bis Revised Text of the legal provisions of the Autonomous Community of Extremadura on taxes transferred by the State, approved by Legislative Decree 1/2018, of April 10

Amount and maximum limit of the deduction

10 percent of the amounts paid during the tax period for the acquisition or rehabilitation of the home that constitutes or will constitute the habitual residence of the taxpayer, reduced by the amount of the subsidies received from the Regional Government of Extremadura in the form of subsidies for the acquisition or rehabilitation of the home.

Requirements for applying the deduction

That the dwelling is located in one of the municipalities and minor local entities of Extremadura in which the legal population on December 31 is less than 3,000 inhabitants.

You can consult the municipalities and smaller local entities with a population of less than 3,000 inhabitants at the following link: " Municipalities and smaller local entities with a population of less than 3,000 inhabitants ".
That the acquisition or rehabilitation of the home has occurred after January 1, 2022.

Deduction base

The basis for the deduction will be the amounts paid from January 1, 2023 for the acquisition or rehabilitation of the home, including the expenses incurred by the purchaser, and reduced by the amount of the subsidies received from the Regional Government of Extremadura in the form of subsidies for the acquisition or rehabilitation of the home.
When the acquisition or renovation of the home is carried out with external financing, the deduction base will include amortization, interest, the cost of the instruments to cover the variable interest rate risk of mortgage loans regulated in article nineteen of Law 36/2003, of November 11, on Economic Reform Measures, and other expenses derived from it. In the event of application of the aforementioned hedging instruments, the interest paid by the taxpayer will be reduced by the amounts obtained from the application of the aforementioned instrument.

Maximum deduction base

Total maximum base for all years in which the deduction is applied:

It will be the smallest of the following amounts:
- 180,000 euros, or
- The amount of the acquisition or rehabilitation of the home that gives rise to the deduction, reduced by the amounts received from the Regional Government of Extremadura in the form of subsidies for the acquisition or rehabilitation of the home.
Precision: The total maximum base amount is applied per dwelling, not per taxpayer, so in the case of dwellings acquired by several taxpayers, the amount of 180,000 euros, established to determine the maximum base for the deduction, will be prorated in proportion to the percentage of ownership they have in the dwelling in question.
Maximum base in each exercise:

The maximum base to be applied in each fiscal year will be 9,040 euros , both in individual taxation and in joint taxation.

Other conditions for the application of the deduction

When a primary residence is acquired having already enjoyed this same deduction, the total maximum base of the deduction will be reduced by the amounts invested in the acquisition of the previous residences, as long as they were subject to deduction.
When, on the occasion of the sale of a habitual residence for which this deduction has been applied, an exempt capital gain is generated by reinvestment , the deduction base for the acquisition or rehabilitation of the new residence will be reduced by the amount of the capital gain to which the exemption for reinvestment is applied. 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 exempt capital gain from reinvestment.
In the cases of marital annulment, divorce or legal separation , the taxpayer may continue to apply this deduction, under the terms provided for in the state regulations on Personal Income Tax, for the amounts paid in the tax period for the acquisition of what was the habitual residence during the marriage, provided that this condition continues to apply to the common children and the parent in whose company they remain.

Concepts to take into account for the application of the deduction

Main residence

As a general rule, the taxpayer's habitual residence is considered to be the building that constitutes his or her residence for a continuous period of at least three years. However, the dwelling will be deemed to have had a habitual residence status when, despite the aforementioned period not having elapsed, the taxpayer dies or other circumstances occur that necessarily require a change of address, such as a marriage, marital separation, job transfer, obtaining the first job, or change of employment, or other similar justified circumstances. For the dwelling to constitute the habitual residence of the taxpayer, it must be effectively and permanently inhabited by the taxpayer within a period of twelve months, counting from the date of acquisition or completion of the works. However, it will be understood that the dwelling does not lose its habitual character when the death of the taxpayer occurs or other circumstances occur that necessarily prevent the occupation of the dwelling, in the terms provided for in the previous paragraph. When the exceptions provided for in the two preceding paragraphs apply, the deduction for the acquisition of a home will be applied until the circumstances arise that necessarily require the change of home or prevent its occupation.
Acquisition of habitual residence

The acquisition of a habitual residence shall be understood as the acquisition in the legal sense of the right of ownership or full ownership of the same, even if this is shared, regardless of the legal transaction that originates it.
Construction and expansion

The construction or expansion of a home is considered to be the acquisition of a home, in the following terms:
1. Housing extension: When the habitable surface area is increased by enclosing the uncovered part or by any other means, permanently and at all times of the year.
  
  For the purposes of determining whether the taxpayer is entitled to apply the deduction for the extension of the habitual residence, the acquisition will be deemed to have taken place at the time the certificate of completion of work is obtained.
2. Construction: When the taxpayer directly covers the expenses derived from the execution of the works, or delivers amounts on account to the promoter of those works, provided that they are completed within a period not exceeding four years from the start of the investment.
  
  For the purposes of determining whether the taxpayer is entitled to apply the deduction, in the case of construction, the acquisition of the habitual residence will be deemed to have taken place with the granting of the public deed of completed new construction.
Rehabilitation works on the habitual residence

Rehabilitation works on a habitual residence shall be considered to be those whose main objective is the reconstruction of the residence by consolidating and treating the structures, facades or roofs and other similar works, provided that the overall cost of the rehabilitation operations exceeds 25 percent of the purchase 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 residence at the time of said start. For these purposes, the proportional part corresponding to the land will be deducted from the purchase price or market value of the home.

Verification of the financial situation: effective deductible investment base

The application of this deduction will require that the verified amount of the taxpayer's assets at the end of the tax period exceeds the value shown by its verification at the beginning of the same by at least the amount of the investments made , without taking into account the interest and other financing costs.

For these purposes, increases or decreases in value experienced during the tax period by assets that at the end of the period continue to form part of the taxpayer's assets will not be computed.

See Chapter 16 for verification of the assets situation .

Incompatibility

This deduction cannot be used simultaneously, for the same taxpayer, with the deductions "For the acquisition of housing for young people and for victims of terrorism residing in the Autonomous Community of Extremadura" and "For interests on external financing for investment in habitual housing for young people".