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A taxpayer inquired whether acquisition costs and mortgage interest for a rented property are deductible. The Directorate General for Taxes (DGT) ruled that acquisition costs (taxes, notary fees, etc.) are not direct rental expenses; instead, they form part of the acquisition value for depreciation purposes. Conversely, mortgage interest is deductible as a necessary expense.
Taxpayers must distinguish between direct rental expenses and acquisition costs, as the latter must be capitalised and depreciated over time rather than deducted immediately.
The tax team reviews your specific situation.
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