Tax treatment of subsidies repayments due to the decertification of VPO housing

The Dirección General de Tributos (DGT) has issued a relevant ruling for individuals undergoing the process of decertifying social housing (VPO). The inquiry focuses on determining whether the amounts that must be repaid in respect of subsidies or grants can be included in the acquisition value or used to reduce the transfer value for Personal Income Tax (IRPF) purposes.

What the DGT has ruled

According to the regulations of the LIRPF (Law 35/2006), the acquisition value of a property includes the actual amount, investments, improvements, and expenses or taxes inherent to the purchase. On the other hand, the transfer value is the actual amount of the disposal minus the expenses or taxes inherent to the sale paid by the transferor.

The DGT establishes that the amounts paid as a repayment of subsidies or grants due to the decertification of the housing do not form part of the acquisition value, nor do they have the capacity to reduce the transfer value. Consequently, these amounts cannot be used to increase the cost of the property or to reduce the sale price when calculating capital gains or losses.

What this means for you

If you are the owner of a VPO property and proceed with its decertification, you must take into account that the money you return to the administration is not considered an expense linked to the purchase or sale of the property. This implies that you will not be able to use said repayment to reduce the taxable base of a potential capital gain derived from the sale of the property.

However, the ruling clarifies that these repayments have their own tax treatment: they are classified as a capital loss in the tax period in which they are made effective.

What you should do

Given this situation, it is necessary to perform a detailed analysis of the operation to ensure the correct treatment of each concept. Since the repayment is considered an independent capital loss, it is fundamental to correctly document the moment the disbursement occurs for its declaration in the IRPF. It is recommended to assess each particular case to determine the exact impact on the income tax return.