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V1844-23 27 June 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · actividad económica

The purchase, renovation, and sale of housing is considered an economic activity for Personal Income Tax purposes

A taxpayer inquires whether the purchase of housing for renovation and resale constitutes an economic activity. The DGT responds in the affirmative, given the organization of means for the sale of real estate.

The question raised

Question posed: Whether said activity is considered an economic activity for the purposes of Personal Income Tax.

The DGT's ruling

Real estate development for subsequent total or partial sale constitutes an economic activity due to the organization of productive means on one's own account. In this case, the net income must be determined using the direct estimation method. Furthermore, the taxpayer shall be obliged to make installment payments.

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