Skip to content
Back to index
V1716-14 3 July 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · bienes de inversión

Improvement works on rental properties may be classified as investment assets

A garage space lessor has enquired whether works to install fire safety and smoke extraction systems constitute investment assets. The DGT has ruled that improvements that increase the productive capacity and useful life of a property are considered investment assets, provided they exceed €3,005.06.

The question raised

Whether the expenses for the execution of works are considered improvements for the purposes of being regarded as an investment asset.

The DGT's ruling

The amounts incurred for goods or services intended for the improvement of a pre-existing investment asset are investment assets if their value exceeds 3,005.06 euros and they produce greater productive capacity or extend its useful life. For works on a property to qualify as such, they must be permanently incorporated without the possibility of separation without damage, not be objects of use or ornamentation, and meet the amount threshold. Repair or maintenance works that only maintain normal productive capacity are not considered investment assets.

Book your free first meeting