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V1130-25 27 June 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

No capital gain or loss if insurance payout matches repair costs

A landlord inquired whether insurance compensation received after paying repair costs was taxable under personal income tax. The DGT states that no capital gain or loss arises when the insurance payout equals the repair costs.

The question raised

Taxation of the compensation in Personal Income Tax (IRPF).

The DGT's ruling

Compensation for damages to assets is classified as a capital gain or loss pursuant to Article 33.1 of Law 35/2006. The calculation is performed by subtracting the proportional part of the acquisition value from the amount received. However, if the compensation coincides with the cost of the repairs carried out, no capital gain or loss occurs, as there is no increase in the value of the assets.

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