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A taxpayer inquired whether renovations carried out on a property (doors, windows, flooring, etc.) can be added to the acquisition value to calculate capital gains. The Directorate General of Taxes (DGT) ruled that such works constitute repairs and maintenance, and therefore do not form part of the acquisition value.
This ruling clarifies that routine maintenance and repair costs cannot be used to increase the cost basis of a property for tax purposes, potentially resulting in higher capital gains tax upon sale.
The tax team reviews your specific situation.
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