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V3131-21 17 December 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Repair and maintenance costs for premises awaiting lease are deductible if intended to generate future rental income

A taxpayer inquired whether they could deduct renovation costs for a commercial premises that remained unleased for a period and has recently been let. The Directorate General for Taxes (DGT) ruled that repair and maintenance expenses are deductible provided they are incurred to facilitate the future generation of income rather than for the owner's personal use.

The question raised

Deduction of the aforementioned expenses for works carried out in the determination of income from real estate capital.

The DGT's ruling

Repair and maintenance expenses are deductible if they are aimed exclusively at the future generation of income from real estate capital and not at the enjoyment of the owner. The deductible amount may not exceed the total income obtained, and any excess may be offset in the following four years. If there is no income in the year the expenses are incurred, they may be deducted in subsequent years while respecting the legal limit. Annual expenses are only deductible in proportion to the period during which the property is rented.

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