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V1836-24 1 August 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

No capital gains tax if compensation for construction defects is used entirely for repairs

A taxpayer inquired about the tax treatment of judicial compensation received for construction defects in their home. The DGT ruled that a capital gain only arises if the amount received exceeds the cost of the repairs carried out.

The question raised

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

The DGT's ruling

The compensation is classified as a capital gain or loss. No gain shall be calculated if the amount received matches the cost of the repairs. If the compensation is applied in a tax period different from that of its imputation, the taxpayer may request a rectification of the tax return to adjust the difference.

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