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V0611-21 16 March 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Renovation expenses may be deductible as repairs or integrated into the acquisition value depending on their nature

A homeowners' association inquires about the tax treatment of a comprehensive renovation and the purchase of furniture and appliances in a rented apartment. The DGT clarifies that deductibility depends on whether the works are repairs or improvements/extensions, and that furniture is deducted via depreciation.

The question raised

Question posed: Tax treatment of the expenses incurred by the community.

The DGT's ruling

Expenses for repair and maintenance, intended to maintain normal use or replace elements, are deductible from the net income from real estate capital. Works that increase capacity, habitability, or useful life are considered improvements or extensions and must be integrated into the acquisition value of the property. Expenses for the acquisition of appliances and furniture are deductible through depreciation according to the Tax Regulations.

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