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V3017-23 21 November 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Costs for works on rental properties are deductible as repairs or via depreciation depending on their nature

A taxpayer has enquired about the deductibility of renovation works carried out on two properties intended for rent. The DGT clarifies that deductibility depends on whether the works constitute repairs and maintenance or represent improvements.

The question raised

What consideration will be given to the expenses incurred on the dwellings in the taxpayer's Personal Income Tax return.

The DGT's ruling

If the lease is not an economic activity, the yields are considered real estate capital income. Repair and maintenance expenses to maintain normal use or replace elements are deductible as direct expenses. Works that increase the capacity, habitability, or useful life of the property are considered improvements and must be deducted through depreciation.

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