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V0658-24 15 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · afectación parcial

Proportional deduction of housing and construction costs related to business activity is permitted

A taxpayer inquired whether they could deduct the purchase of land, mortgage interest, and architect fees for a property used partially for their economic activity. The Directorate General for Taxes (DGT) ruled that the partial allocation of divisible elements and the proportional deduction of expenses are permissible.

The question raised

Deductibility in Personal Income Tax of the land purchase, as well as the mortgage and architect fees corresponding to the business portion of the dwelling.

The DGT's ruling

Partial allocation of divisible assets is possible provided that the allocated portion is capable of separate and independent use. In this case, ownership expenses (depreciation of the building excluding the land, property tax, interest, fees, community charges, and insurance) may be deducted proportionally. Architect fees and geotechnical studies are integrated into the acquisition value for the depreciation base of the allocated portion of the construction.

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