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V1882-20 10 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Land value may be excluded from acquisition cost for property depreciation purposes

A query was raised regarding whether land value can be excluded from depreciation calculations if it is specified in the purchase deed. The Directorate General for Taxes (DGT) ruled that if the land value is explicitly determined in the deed, it must be excluded from the acquisition cost when calculating deductible expenses.

The question raised

For the purposes of the deductible expense for depreciation of income from real estate capital, if the value of the land was determined in the public deed of sale of the property, can said land value be excluded from the calculation.

The DGT's ruling

To calculate the depreciation of income from real estate capital, a rate of 3 percent is applied to the higher of the acquisition cost or the cadastral value, always excluding the land value. If the public deed of sale has determined which part of the cost corresponds to the land, said value shall be excluded from the calculation for the annual deductible expense.

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