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V3444-20 27 November 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital inmobiliario

Repair costs and water meter installation are deductible for residential rental income

A landlord has enquired whether expenses arising from a building levy for works and the installation of individual water meters can be deducted. The Directorate General for Taxes (DGT) has ruled that these costs are deductible as repair and maintenance expenses, provided they do not exceed the total income generated.

The question raised

Deductibility of the expenses incurred by the taxpayer in relation to the aforementioned works and the installation of water meters, and the expenses arising from the community's liability established by court ruling. Substantiation of the expenses incurred.

The DGT's ruling

Expenses for the replacement of pipes, repairs to downspouts and cornices, as well as the installation of an individual water meter, are considered deductible repair and maintenance expenses in income from real estate capital. The deduction is limited to the amount of the gross income obtained, and any excess may be offset in the following four years. Regarding potential payments arising from a judicial ruling against the community, the DGT cannot determine their tax relevance as it is unaware of its content.

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