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V2047-20 22 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Home maintenance renovations do not increase acquisition value for Personal Income Tax

A taxpayer inquired whether renovations carried out on a property (doors, windows, flooring, etc.) can be added to the acquisition value to calculate capital gains. The Directorate General of Taxes (DGT) ruled that such works constitute repairs and maintenance, and therefore do not form part of the acquisition value.

The question raised

Whether such renovations would constitute an increase in the acquisition value.

The DGT's ruling

The described renovation works constitute repair and maintenance expenses, which do not form part of the acquisition value for the calculation of capital gains or losses. The acquisition value only includes the actual purchase price and the cost of investments and improvements. On the other hand, the transfer of furniture and household appliances generates a capital gain or loss that must be substantiated, although losses due to the consumption of durable consumer goods shall not be computed.

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