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V1360-19 10 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Tax on increase in land value is not deductible via depreciation

A taxpayer has inquired whether the tax on the increase in value of urban land, paid when inheriting leased properties, is deductible. The DGT has ruled that this tax constitutes part of the higher acquisition cost of the land and therefore cannot be deducted or depreciated.

The question raised

Deductibility of the aforementioned tax

The DGT's ruling

The tax on the increase in value of urban land paid upon the acquisition of real estate constitutes an increase in the acquisition value of the land. As it is a tax on land, which is a non-depreciable asset, its amount cannot be deducted through depreciation. It is not considered a necessary expense for obtaining income, but rather a cost inherent to the acquisition of the land.

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