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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

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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