The homeownership key is a concept linked to the relationship that a person has with their habitual residence.
This information is used by the Tax Agency to know if the house in which we reside is our property if it is for rent or if it is an inheritance in usufruct, and it is very important because it is related to the taxes and personal income tax that we pay.
For these reasons, it is normal that doubts arise about how to fill in this section of the Income Statement, especially if we have just bought a house or if we have changed residence in recent months.
At Sky Marketing we are experts in real estate services and we advise our clients to solve all their doubts related to their home. Next, we will tell you what the property ownership code is and which are the codes contemplated by the Spanish Tax Agency.
The Key of Ownership of the House in the Declaration of Income
When we make the Income Statement, we must include a lot of information about our usual address. Some of them are:
- Type of public road (Avenue, a Street, a Walk, a Plaza, a Roundabout, etc.).
- Name of the public thoroughfare.
- Type of numbering. Here you must indicate if it is a number, or failing that, a kilometer or if it does not have a number (Y / N).
- Number qualifier.
- Portal, door, block, and plant.
- Complementary data of the address (Urbanization, Building, Polygon, Residential, etc.).
- Locality / Population.
- Postal code.
All these data not only affect us, but all the people who reside at our same address, so they must also appear reflected in their respective statements. Reviewing this data is essential because, if an error is detected, we may be forced to correct it with a supplementary statement or by paying a fine.
The same thing happens with the «Homeownership code». This information usually appears in section 7.1.1 of the Income Statement, specifically in the section entitled “Additional details of your habitual residence”.
In this section, there is a space for “Ownership” in which we must indicate what is the relationship we have with our usual address. To facilitate this, the Tax Agency has established four homeownership codes:
Key 1. For owners
It corresponds to the people who own the home in which they usually reside.
You should also check this box if your spouse owns the home in part or in full. This key must include, in addition to the home, the parking spaces (if there are any), with a maximum of two parking spaces per home.
Key 2. For usufructuaries
If you or your spouse enjoy an inherited home without owning it, you must mark the Homeownership Key 2 on the Income Statement.
This box indicates that you, your spouse, or both of you totally or partially enjoy a house in usufruct.
→ You are interested: How is real estate valued in an inheritance?
Key 3. For tenants
If you live for rent, you must indicate the ownership key of house 3, where it is reflected that, although you are not the owner of your home, you reside there for a lease.
In this case, when checking the corresponding box, you must include the DNI or the corresponding identifier of the owner of the home.
Key 4. For other situations
This box includes any relationship with respect to the habitual residence that is not reflected in the three previous ownership codes.
Generally speaking, ownership code 4 is indicated for those who do not have any legal title to their habitual residence or for those who have different ownership than the previous ones. For example, if you live with your parents or if you share a flat but your name does not appear in the contract, you must check this box.
Finally, and depending on the relationship you have with your habitual residence, when making your Declaration you must also present these documents:
- Cadastral Reference. This document shows the type of ownership of the property where you reside, as well as other information related to its location, extension, etc.
- Participation document. It must be presented in apartments owned or in usufruct.
- The situation of the property. This information indicates where your usual address is located and appears arranged in four codes:
- Key 1. For dwellings in the Spanish territory, with the exception of the Basque Country and Navarra.
- Key 2. For homes located in the Basque Country or Navarra.
- Key 3. For homes without a cadastral reference.
- Key 4. For homes located abroad.
What is habitual residence and how it is taxed in the Income Declaration?
Filling in the homeownership section and the situation of your usual address will allow you to deduct more or fewer expenses in your Personal Income Tax Return. For this reason, many people decide to consult an expert to find out which code to use or which box to check.
For example, if you are the owner of the home where you reside, you are required to reflect this in the Personal Income Tax Return, although you will only get a deduction if you bought your home before 2013.
If you carried out rehabilitation works or to adapt your home due to disability between 2013 and 2017, you will be able to opt for a deduction of up to 15% of the amount invested in the purchase or in the works, with a maximum of € 9,000 per year.
On the other hand, if you sold your usual home in 2019, the money you have obtained from this operation will be subject to the corresponding taxes, unless you are over 65 years of age or you reinvest it in buying a new home.
For an address to be considered a habitual residence, it is necessary that your house meets a series of criteria, including:
- Reside in it for a minimum period of 3 years.
- Reside continuously for at least twelve months after the purchase or completion of the rehabilitation works.
Of course, second homes are outside the definition of habitual residence. This type of property, in fact, has its own tax system and with specific personal income tax deductions/reductions. So, the deductible expenses of a second home are different.
Are you thinking of moving house? Are you looking for a team of professionals to advise you throughout the purchase process? Contact Tajarat properties. We are your trusted online real estate agency.