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V0333-19 15 February 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · valor de adquisición

Renovation works may be included in acquisition value if deemed improvements or extensions

The taxpayer asks whether renovations carried out on a rented property can be added to the acquisition value to calculate capital gains upon sale. The DGT rules that this depends on whether the works constitute improvements or extensions, or are merely repair and maintenance expenses.

The question raised

What would be the acquisition value of said dwelling for the purposes of calculating the corresponding capital gain or loss derived from its sale. Specifically, it is asked whether the renovation works would form part of the acquisition value of the property.

The DGT's ruling

The acquisition value includes the actual purchase price, investments and improvements, and the expenses and taxes inherent to the acquisition. Works that increase the capacity, habitability, or useful life of the property are considered improvements or extensions and form part of the acquisition value. Conversely, repair and maintenance expenses intended to maintain the useful life are not included in said value. The acquisition value must be reduced by tax-deductible depreciation.

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