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V3138-20 ·20 October 2020 ·consulta-vinculante Medium impact
Tax

Home improvements and extensions may be included in acquisition value, but not repairs

A taxpayer has enquired which expenses can be added to the acquisition value of a property to calculate capital gains for Personal Income Tax (IRPF) purposes. The Directorate General for Tax (DGT) has ruled that only investments, improvements, and extensions are included, excluding repair and maintenance costs.

In 6 key points

How it affects those involved

This ruling clarifies the distinction between capital expenditure and revenue expenditure for tax purposes, affecting how property owners calculate taxable capital gains upon sale.

Lifecycle

2020-10-20PublishedPublished 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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