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V1841-20 9 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Repair costs for properties intended for future rental may be deductible if aimed exclusively at leasing

A property owner enquired whether renovation costs incurred while a property was unrented were deductible. The DGT ruled that they are deductible provided they are intended exclusively for the future generation of income and the expectation of rental is proven.

The question raised

Deductibility of the specified expenses in the determination of income from real estate capital.

The DGT's ruling

Repair and maintenance expenses are deductible for the purpose of determining the net income from real estate capital. In cases of expectation of rental income, deductibility requires that the actions be directed exclusively toward the future obtaining of income and not toward the enjoyment of the owner. The deductible amount may not exceed the total income obtained, and any excess may be offset in the following four years. The situation of expectation of rental income must be substantiated by the owner.

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