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V1315-24 5 June 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · atribución de rentas

Grants for flood risk housing adaptation taxed as capital gains for Income Tax

A homeowners' association received a grant to carry out works to minimise damage from potential flooding. The DGT has ruled that this money must be taxed in the owners' Personal Income Tax (IRPF) as a capital gain.

The question raised

Tax treatment of said subsidy in the Personal Income Tax (IRPF) of the homeowners.

The DGT's ruling

The subsidy is attributed to each owner according to their participation coefficient and qualifies as a capital gain. The exemption for flood aid does not apply because the subsidy aims at risk adaptation and not at repairing damages already caused. The gain must be included in the taxable base in the period in which the payment is received.

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