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A taxpayer queried whether renovation works carried out on a property can be included when calculating capital gains tax upon its sale. The Directorate General for Taxes (DGT) ruled that only works classified as improvements or extensions may be included, whereas simple repair or maintenance costs cannot.
This clarification limits the tax-deductible costs for taxpayers, ensuring that only capital expenditures that increase the property's value are added to the acquisition cost, rather than routine maintenance expenses.
The tax team reviews your specific situation.
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