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V2996-18 21 November 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Improvement or expansion works may be included in the acquisition value of the transferred real estate

The inquirer asks whether renovation works carried out on a dwelling may be considered improvements to be integrated into the acquisition value. The DGT responds that only works that entail an improvement or expansion of the capacity, habitability, or useful life of the real estate form part of said value.

The question raised

Calculation of the capital gain and, in particular, whether renovation works are considered improvements and, consequently, form part of the acquisition value.

The DGT's ruling

The acquisition value includes the cost of investments and improvements made to the acquired assets. Works that increase the capacity, habitability, or useful life of the real estate are considered improvements or expansions. Conversely, repair and maintenance expenses intended to maintain the useful life or capacity of use do not form part of the acquisition value. The taxpayer must justify the nature of the works through invoices and admitted means of proof.

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