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A taxpayer inquired whether the amount used to settle a mortgage affects the calculation of capital gains from the sale of a property. The Directorate General for Taxes (DGT) ruled that both acquisition and transfer values are determined by the actual amounts paid, including expenses and investments, but expressly excluding interest payments.
This ruling clarifies that mortgage interest is not a deductible expense for tax purposes when determining the capital gain or loss on a property sale, potentially increasing the taxable base for taxpayers.
The tax team reviews your specific situation.
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