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V3082-23 24 November 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Pre-rental repair costs are deductible if intended solely for future income generation

A taxpayer inquired whether cleaning and repair costs incurred personally on a property prior to letting it out are deductible. The DGT ruled that such repair and maintenance expenses are deductible, provided they are incurred exclusively to generate income from real estate capital and not for the owner's personal use.

The question raised

Whether all expenses incurred will be deductible from income in the taxpayer's Personal Income Tax return.

The DGT's ruling

Repair and maintenance expenses incurred prior to leasing are deductible as income from real estate capital if they are directed exclusively toward the future generation of income and not for the owner's enjoyment. The deductible amount may not exceed the total income for the period, and any excess may be offset in the following four years. The owner must substantiate the expectation of rental income and the incurrence of expenses through means of proof admitted by law.

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