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V2059-14 28 July 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

40% tax reduction does not apply to amounts received from the termination of a lease agreement

A property owner enquired whether the amount received from the termination of a commercial lease agreement could benefit from the 40% reduction for irregular income. The Directorate General for Taxes (DGT) ruled that this reduction is not applicable.

The question raised

Whether the 40 percent reduction provided for real estate capital income with a generation period exceeding two years is applicable to the amount received by the applicant.

The DGT's ruling

The amount received for the termination of the contract is classified as income from real estate capital. The 40% reduction is not applicable because this case is not listed in Article 15 of the Regulations as income obtained in a notoriously irregular manner, nor is it income with a generation period exceeding two years.

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