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V2722-23 6 October 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · valor de adquisición

Improvement or extension works may be added to the property's acquisition value

A query was raised regarding whether certain expenses incurred on a property can be considered improvements to increase its acquisition value for Personal Income Tax (IRPF) purposes. The Directorate General for Taxes (DGT) ruled that only extension or improvement works qualify, whereas repair or maintenance works do not.

The question raised

It is requested to determine whether said expenses can be classified as improvements for the purpose of being considered as an increase in the acquisition value of the property for Personal Income Tax purposes.

The DGT's ruling

Works intended to maintain the useful life or capacity for use of the property are repairs and maintenance and are not included in the acquisition value. Works that increase capacity, habitability, or extend the useful life are considered expansions or improvements and do form part of the acquisition value. The taxpayer must justify the nature of the works through invoices that comply with legal requirements.

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