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V5370-16 20 December 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Improvements, extensions and acquisition costs may be included to increase the property's acquisition value

The taxpayer asks which expenses and investments in a property can be deducted when calculating capital gains upon sale. The DGT clarifies that investments, improvements, and costs inherent to the purchase may be added, but repair or maintenance expenses may not.

The question raised

Question posed - Requests information regarding which expenses and investments made on a property acquired in 2002 are deductible when determining the capital gain generated at the time of its sale.

The DGT's ruling

The acquisition value includes the actual purchase price, investments, improvements, and expenses or taxes inherent to the acquisition (such as notary, registry, management, or Property Transfer Tax), excluding interest. Improvements or expansions that increase the capacity, habitability, or useful life of the property form part of the acquisition value, whereas repair and maintenance expenses do not. To deduct the Tax on the Increase in Value of Urban Land paid by the buyer, the buyer must prove that they agreed to its payment with the seller.

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