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V0550-22 18 March 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Acquisition value must be reduced by tax-deductible depreciation when selling real estate

A taxpayer inquired whether depreciation applied to a property should be deducted when calculating capital gains upon its sale. The Directorate General for Taxes (DGT) ruled that the acquisition value must be reduced by the amount of tax-deductible depreciation.

The question raised

Whether, when calculating the capital gain derived from the transfer of a property in Personal Income Tax (IRPF), the depreciation previously applied to the property must be deducted from the acquisition value.

The DGT's ruling

The acquisition value of a property is composed of the actual purchase price, investments, improvements, and inherent expenses, but must be reduced by the amount of tax-deductible depreciation. In the case of leased properties, the minimum depreciation must be taken into account, regardless of whether it was considered an actual expense. Community fees, insurance, or repairs should not be added or subtracted, as they are not inherent to the acquisition or transfer.

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