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V2836-20 22 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Project and building permit costs are considered improvements to the land's acquisition value

A query was raised regarding whether construction project costs, building permits, and transfer tax should be included in the land's acquisition value. The DGT ruled that project and permit costs constitute improvements, while the tax is an inherent cost of the acquisition.

The question raised

Whether the expenses associated with the construction project and the building permit form part of the acquisition value of the land, as well as the Transfer Tax paid at the time of its acquisition.

The DGT's ruling

The acquisition value of the land includes the actual purchase price plus the cost of investments, improvements, and taxes inherent to the acquisition. Construction project expenses and building permit costs constitute an improvement to the asset. The Transfer Tax paid upon acquiring the land is an inherent tax that must be added to the acquisition value.

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