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V0710-21 ·25 March 2021 ·consulta-vinculante Medium impact
Tax

Improvements or extensions are added to the acquisition value, whereas repairs are deductible expenses

The taxpayer asks whether repair costs for rental properties should be deducted as current expenses or treated as improvements. The DGT clarifies that repairs intended to maintain the useful life of the asset are deductible expenses, whereas improvements or extensions that increase capacity or habitability are incorporated into the acquisition value.

In 6 key points

How it affects those involved

This ruling provides clarity for landlords on the correct tax treatment of property maintenance costs, distinguishing between deductible operating expenses and capital expenditures that increase the asset's cost basis.

Lifecycle

2021-03-25PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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