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V2971-20 ·2 October 2020 ·consulta-vinculante Medium impact
Tax

Renovations may increase acquisition value if deemed improvements or extensions to the property

A query was raised regarding whether renovation costs for a rental property can be added to the acquisition value for future sale purposes. The DGT ruled that this depends on whether the works constitute improvements or extensions, or are merely repairs and maintenance.

In 6 key points

How it affects those involved

This ruling clarifies the tax treatment of property renovation costs, distinguishing between capital improvements that increase the cost basis and maintenance expenses that do not.

Lifecycle

2020-10-02PublishedPublished 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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