The month of April has brought with it bad news for mortgage holders by turning positive. A blow to the pocket that some taxpayers will be able to alleviate through the 2021-2022 Income Statement.
The Tax Agency allows deducting part of the mortgage expenses, but not in all cases. They may do so through the general deduction for investment in primary residence in its acquisition, construction, rehabilitation and expansion modality, but with one condition: it is only available to taxpayers who acquired the home before 2013. Only in one case can amounts be deducted those who acquired it after 2013: when they had paid amounts for the construction of the home before 2013.
The second condition is also explained by the Tax Agency: in order to apply the state deduction for investment in habitual residence in the 2021 financial year, the taxpayer must have enjoyed this same deduction in 2012 or previous years.
How much money from the mortgage can you deduct on the Income
If they meet these conditions, taxpayers will be able to take advantage of the state deduction, that is, deduct part of the mortgage. The maximum base of the deduction is 9,040 euros per year, and on that amount the following percentages may be deducted:
-7.5% in the state section.
-7.5% in the regional section. In Catalonia, 9% is allowed for taxpayers under 32 years of age, unemployed for more than half of 2021, with 65% disability or a dependent child and provided they acquired their habitual residence before July 30, 2011.
Thus, in most cases the maximum general deduction for 2021 for the acquisition of a habitual residence will be 15%. Applied on the maximum deductible base of 9,040 euros, up to 1,356 euros per year could be deducted from Personal Income Tax (IRPF).
What is the Income box to deduct the mortgage
The taxpayer will have to fill in several boxes to be able to deduct the mortgage expenses. Specifically, boxes 547 and 548 reflect the data for the state section and the regional section of the deduction, respectively. These boxes, however, contain the data that must be included in Annex 1, in boxes 698 and 699.
What else can you deduct apart from the mortgage
The truth is that, although this deduction is associated with deducting the mortgage, not only the installments that are paid month by month to the bank for this mortgage can be deducted. As explained by the Tax Agency, “expenses and taxes incurred that have been borne by the taxpayer” are also included:
-The Tax on Property Transfers and Documented Legal Acts, as well as the Value Added Tax (VAT).
-Expenses such as notary, agency…
-Architects’ fees, quantity surveyors, building permit expenses and declarations of new works…
-Expenses for amortization of capital and interest in the formalization of the mortgage.
-The cost of interest rate risk hedging instruments.
-The premiums of life and fire insurance contracts if they were included in the mortgage conditions.
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