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V3380-20 19 November 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Acquisition value of a self-built property includes land and construction costs

A taxpayer has requested clarification on how to calculate capital gains when selling a property they built on their own land. The Directorate General of Taxes (DGT) clarifies that the acquisition value is the sum of the land cost and the construction cost, and that improvements may be added to the value if they increase the property's capacity or useful life.

The question raised

Method of calculating capital gains or losses in Personal Income Tax.

The DGT's ruling

In constructions executed by the taxpayer, the acquisition value is the sum of the amount of the land and the works, plus inherent expenses and taxes. The acquisition date is the date of completion of the works, unless this cannot be proven, in which case it shall be the date of the deed of declaration of new work. Improvements or extensions that increase the capacity, habitability, or useful life of the property form part of the acquisition value, whereas repair and maintenance expenses do not.

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