Repayment of subsidies and interest due to housing decertification are capital losses

The decertification of social housing can lead to unexpected tax consequences for the taxpayer. Recently, the Dirección General de Tributos (DGT) has clarified the tax treatment that must be applied to both the repayment of public subsidies received and the late payment interest generated as a result of this process.

What the DGT has ruled

The binding ruling establishes that the repayment of subsidies and subsidized interest, derived from the decertification of the housing, is considered a capital loss. This event must be declared in the tax period in which the payment is made effective.

Likewise, the DGT points out that the late payment interest accrued due to the decertification is also classified as a capital loss. In this case, the loss must be imputed in the fiscal year in which said interest becomes due. Both concepts are integrated into the general taxable base of the Personal Income Tax (IRPF), in accordance with Law 35/2006.

What this means for you

If you are an individual who must return subsidies for having lost the status of protected housing, this disbursement is not treated as a common deductible expense, but as a capital loss. This implies that the tax impact will depend on your ability to offset these losses against other gains.

By being integrated into the general taxable base, the regulations establish a specific order of compensation:

• First, they will be offset against capital gains that are not part of savings income.
• If a negative balance persists after this compensation, it can be offset against income and imputations that are not savings income, with a limit of 25%.

What you should do

Since the treatment of these amounts depends on the exact moment the interest becomes due and the effectiveness of the repayment, it is necessary to analyze the date of the financial movements to determine the correct fiscal year. It is fundamental to assess each particular situation to ensure that the integration into the general taxable base is carried out in accordance with the compensation limits established by current regulations.