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V1965-17 20 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · comunidad de bienes

Financial and repair expenses are deductible only if they are linked to the leased properties

A query is made as to whether financial expenses from loans to acquire shares in a community of property and repair expenses for dwellings occupied by co-owners are deductible. The DGT responds that only expenses necessary to obtain income from real estate capital are deductible, limited to the proportional part of the properties intended for leasing.

The question raised

Question posed: Whether financial expenses derived from loans requested by co-owners for the acquisition of the community's participation share, and the maintenance and repair expenses of dwellings occupied by co-owners for a symbolic price, are considered tax-deductible expenses.

The DGT's ruling

Financial expenses from loans to acquire participation shares are expenses inherent to the co-owners and are deductible in their Personal Income Tax (IRPF) if they meet the requirements of Article 23 of the LIRPF. However, only the expenses corresponding to the proportional part of the loan intended for the acquisition of the leased properties may be deducted. Similarly, repair and maintenance expenses shall only be deductible if they correspond to the properties intended for leasing and not to those occupied by the co-owners themselves.

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