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V1496-19 21 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · afectación parcial

Housing and utility expenses may be deductible if part of the home is used for economic activity

A taxpayer has enquired about deducting expenses for their primary residence when a portion is used for economic activity. The DGT clarifies that ownership expenses may be deducted proportionally, while utility costs can be deducted using a specific percentage.

The question raised

Deduction of expenses associated with the dwelling for the determination of the net income of the economic activity in the Personal Income Tax.

The DGT's ruling

The partial allocation of divisible assets, such as a dwelling, is possible provided that the allocated portion is capable of separate and independent use. Ownership expenses (building depreciation, property tax, interest, community fees, etc.) are deductible in proportion to the allocated portion. Utilities (water, gas, electricity, telephone, and internet) are deducted by applying 30% to the proportion of square meters allocated to the activity, unless proven otherwise. Expenses must be justified, recorded, and correctly imputed temporally.

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