The People’s Party on Monday detailed more than one proposal to redeem the discount in the IRPF for investment in ordinary housing – applied to what is paid for in the mortgage – made by the party chief last week, Alberto Nunez Figo, which generated a lively political debate. PP’s Deputy Minister for Economic Policy, Juan Bravo, has specified that what is being proposed is a provisional figure, which will in principle be applied during 2023 and 2024 to mitigate the impact on local economies of the Euribor rise, and allow It is deducted in the income statement up to a maximum of 750 euros From the cost of the mortgage for families with an annual income of up to 40 thousand euros.
Thus, the popular people intend to again approach the government with proposals to address a circumstance that is likely to turn into a social problem in the coming months. Euribor closed last October with a monthly average of 2.629% and expects a rise of up to 40% in monthly payments for Spaniards who have a variable-rate mortgage linked to this indicator, which represents nearly 70% of all mortgages.
Feijóo last week presented the idea of PP proposing the temporary refund of the deduction for investment in initial residence in personal income tax, which few academic studies blame for increased housing spending in times of a property bubble and has since been a bad rap among economists.
Perhaps for this reason, the PP economic spokesperson emphasized the temporary nature of this financial assistance, which will be redeemed only over the next two years, in the hope that the rise in Euribor will stabilize in that period and no longer make this necessary. . Specifically, the number suggested by PP will allow deduction Up to 5% of the principal and up to 15% of the interest You pay in the annual mortgage installment a maximum of 15,000 euros, which will allow tax savings of up to 750 euros.
The measure will be limited to families with a maximum annual income of 40 thousand euros, although Juan Bravo has opened the door so that, if applied, this limit could be extended to 60 thousand euros, in line with the tax cuts approved in the Valencian Community Or the Canary Islands, but with diminishing tax advantages.
Famous persons also suggest that taxpayers who do not have the obligation to declare a mortgage, but hold a mortgage, have the possibility of benefiting from the procedure through a negative tax, which the state will pay them to relieve the additional fees derived from Euribor.
Negotiate with the bank to find solutions
The temporary rehabilitation of the personal income tax housing deduction is just one of the pillars of PP’s proposal to deal with the mortgage crisis. The public also proposes to revitalize the Code of Good Practice agreed with the Bank in 2012 which encouraged financial entities to Facilitate mortgage debt restructuring Bravo said to families with temporary problems in paying the monthly installment, including the possibility of making deductions or extensions in payment in extreme cases, “so that there is no additional debt on the distressed families after the housing delivery.”
In the same sense, the PP suggested negotiating with the bank to facilitate the prolongation of mortgage repayment terms in cases of variable rate mortgages as long as the 35 or 40-year cap is not exceeded and the formation of a fund between the state and the bank to deal with the most serious situations.