Skip to content
Back to index
V0990-16 14 March 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · actividad económica

Urban regeneration grants classified as income from economic activity

A property owner sought clarification on the tax treatment of an urban regeneration grant received during a residential building development. The Directorate General for Taxes (DGT) ruled that real estate development constitutes an economic activity and, therefore, the grant must be taxed accordingly.

The question raised

Tax treatment of said subsidy in Personal Income Tax.

The DGT's ruling

Real estate development for total or partial sale constitutes an economic activity. The subsidy received to finance said activity is classified as income from an economic activity. If it is a capital subsidy for investments in fixed assets, it shall be recognized to the same extent as the investments or expenses are depreciated. If the assets are not depreciable, it shall be recognized in its entirety in the tax year of the disposal or write-off of the asset.

Book your free first meeting