Tax Agency Recognizes Mortgage Cancellation as Deductible Expense
The Tax Agency has implemented a fiscal provision that allows all costs associated with the cancellation of mortgage loans to be considered as a deductible expense when they are settled using funds obtained from the sale of the property. This regulatory update represents significant relief for taxpayers who allocate part of the sale proceeds to pay off their outstanding debt with financial institutions 🏠
Tax Advantages for Selling Owners
By incorporating mortgage cancellation costs as a deductible concept, sellers can significantly reduce the taxable base on which they must pay taxes. This mechanism translates into direct tax savings by decreasing the calculated capital gain, more accurately reflecting the real economic benefit obtained from the real estate transaction.
Concrete Benefits for the Taxpayer:- Reduction of the tax burden by lowering the capital gain subject to declaration
- Compensation for fees and additional costs derived from the early settlement of the loan
- More accurate reflection of the real economic benefit obtained from the sale transaction
The measure is especially relevant for those who have had to face fees or additional costs when settling their mortgage loan early
Conditions to Apply the Deduction
To qualify for this tax benefit, it is essential to meet specific requirements established by the Tax Administration. The regulation requires that the loan cancellation be carried out exclusively with funds from the sale of the property linked to the mortgage.
Essential Requirements:- The cancellation must be financed with the amount obtained entirely from the sale of the mortgaged property
- Retention of all documentation proving both the sale transaction and the cancellation costs
- Submission of bank receipts and the original loan contract during the declaration process
Final Reflection on the Measure
This provision by the Tax Agency finally recognizes the economic effort involved in settling a mortgage, although paradoxically it only applies when the taxpayer disposes of the property that was so hard to acquire. A fiscal irony that, nevertheless, provides economic relief at an important moment of patrimonial transition 💰