Will you be able to deduct your mortgage this 2023?

In front of the beginning of a new income tax return campaign, it is common that certain doubts arise among homeowners about aspects related to their homes. One of the most frequent is the mortgage tax deduction.

Do you find yourself in this situation? If the answer is yes, you will be interested to know if you will be able to deduct your mortgage in this year’s income tax return.

What is the mortgage tax credit?

Mortgage relief is the possibility for taxpayers to reduce certain expenses associated with the purchase or acquisition of a primary residence in their income tax return.

This relief can represent an important tax saving for homeowners and can even be a factor to consider when deciding whether or not to purchase a property.

What are the requirements you must meet in order to deduct your mortgage?

Although the mortgage deduction for the habitual residence was eliminated on January 1, 2013, you can still benefit from it if you meet the following conditions:

Having acquired a home by signing a mortgage loan.

• That the purchased home is your habitual residence for at least three years.
• That the maximum amount of the mortgage does not exceed the limit of 9040 € per year.
• That you have paid the interest on the mortgage during the corresponding fiscal year.
• That the mortgage has been formalized prior to January 1, 2013. In the case of Navarra, the date of purchase is required to be prior to January 1, 2018, while in the Basque Country the deduction has no time limit.

What is the maximum deduction for a mortgage?

The maximum deduction allowed in the income tax return for the mortgage concept is 15% of the annual payment, with the aforementioned limit of €9040.

This percentage is divided in two parts:

• The 7.5% corresponding to the state tranche.
• The 7.5% corresponding to the regional tranche.

In Catalonia, if the following requirements are met, the regional tranche is increased to 9%.

• To have acquired the property before August 2011.
• Be under 32 years of age.
• To have been unemployed for half of the tax year.
• To have a degree of disability higher than 65%.
• To have children in the family unit.

In the case of a mortgage with two holders, the maximum limit rises to 18080 €. That is to say, the double as long as the income tax return is filed separately.

Can you deduct the mortgage after changing it?

Indeed, it is possible to continue deducting your mortgage loan after any modification made to improve the conditions of the same, either: changing bank, modifying the terms with your current bank or canceling the mortgage to contract a new one.

However, it is important to keep in mind that if the amount of the initial loan has been extended, the deduction will only be applied to the capital corresponding to the original mortgage.

What expenses associated with the mortgage are deductible?

These are the mortgage expenses that you will be able to deduct:

• The installments.
• The opening commissions.
• Mortgage expenses.
• Insurance related to the loan.
• The expenses of novation or subrogation.

Which box corresponds to the mortgage tax deduction?

In the income tax return, in order to request the deduction for investment in primary residence through the draft, you will have to locate the corresponding section and complete fields 547 and 548.

Are you looking for guidance on any topic related to the real estate market?

We are waiting for you in our real estate agency in Barcelona or Madrid to give you a completely personalized advice.

Do not hesitate to contact our team of professionals, we want to help you!