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V1925-14 16 July 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por rehabilitación

Housing renovation tax deduction unavailable for 2013; received grants taxable as capital gains

A taxpayer inquired whether they could claim the housing renovation tax deduction for 2013, having completed works in 2012 and received a grant in 2013. The Directorate General for Taxes (DGT) ruled that the deduction was abolished in 2013 and that the grant received constitutes a capital gain that must be taxed as general income.

The question raised

1. Possibility of applying the deduction for housing rehabilitation in the 2013 fiscal year.

The DGT's ruling

The deduction for investment in the primary residence was abolished with effect from January 1, 2013, therefore it is not possible to apply it in said fiscal year even if the works were paid for in 2012. Subsidies for the acquisition or rehabilitation of housing constitute a capital gain as they alter the taxpayer's net worth. This gain must be included as general income in the tax period in which the change in net worth occurs, which is when the granting is communicated or when the amount becomes due.

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