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Practical Income Manual 2023.

To offset the increase in the cost of loans or mortgage credits with variable interest rates (temporary deduction)

Regulations: Art. 3 quater Consolidated text of the legal provisions of the Autonomous Community of the Balearic Islands regarding taxes transferred by the State, approved by Legislative Decree 1/2014, of June 6

Attention : Initially limited to fiscal years 2022 and 2023, the application of this deduction has been extended until fiscal year 2024.

Amount and limit of the deduction

  • The amount of the deduction is the difference between the interest paid by taxpayers in the year corresponding to the settlement of the tax (2023) and the interest paid in 2021 in contracts that meet the requirements established. indicated in the following section.

  • Maximum limit of the deduction: 400 euros per taxpayer.

    Attention : For taxpayers who died before November 26, 2023, the previous limit will be 250 euros .

Requirements for applying the deduction

  • This must be interest paid by taxpayers in loan or credit contracts with a mortgage guarantee and with a variable interest rate signed for the financing of the purchase of housing.

  • The property for whose acquisition the mortgage has been established will be the habitual residence of the taxpayer.

Other conditions for the application of the deduction

  • The increase in cost (difference between the interest paid by taxpayers in 2023 compared to those paid in 2021) must be justified by a bank certificate, which must be kept at the disposal of the tax administration.

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

    • - 33,000 euros in individual taxation.

    • - 52,800 euros in joint taxation.

  •  To apply this deduction, documentary justification is required, through invoices or corresponding equivalent documents, which must be kept at the disposal of the tax administration.

Temporal scope for the application of the deduction

This deduction is applicable in tax years 2022, 2023 and 2024.

Incompatibility

This deduction is incompatible with the state deduction "For investment in habitual residence" referred to in the eighteenth transitional provision of the Personal Income Tax Law .