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V0537-24 9 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · valor de adquisición

Improvements and extensions to inherited property may be added to the acquisition value for capital gains calculations

A taxpayer inquired whether energy efficiency works and the renovation of kitchens and bathrooms can be included in the acquisition value of an inherited property. The Directorate General for Taxes (DGT) ruled that only works qualifying as improvements or extensions may be added, excluding repair and maintenance expenses.

The question raised

Whether the works carried out would form part of the acquisition value of the dwelling, for the purposes of calculating the capital gain generated upon sale.

The DGT's ruling

The acquisition value of real estate acquired for gratuitous consideration includes the actual acquisition amount plus the cost of investments and improvements made. 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 or capacity of use are not integrated into said value. The taxpayer must justify the nature of the works through invoices and admitted means of proof.

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