Tax treatment of the repayment of subsidies following the decertification of VPO housing

The Dirección General de Tributos (DGT) has issued a relevant ruling for owners of social housing (VPO) who are facing the process of decertifying the property. The inquiry analyzes how the amounts that the owner must return to the administration as a repayment of subsidies or subsidized interest should be taxed.

What the DGT has ruled

The body has clarified that the amounts paid for the repayment of subsidies or subsidized interest due to the decertification of the housing cannot be included in the acquisition value of the property nor used to reduce its transfer value. Instead, these amounts qualify as a capital loss.

This treatment applies in the tax period in which the repayment is made effective. Likewise, the DGT establishes that late payment interest derived from said decertification must also be considered a capital loss in the period in which it becomes due.

What it means for you

If you are the owner of a VPO property and are forced to return the subsidies received after decertification, you will not be able to use that expense to reduce the profit from a future sale of the property. Since it does not form part of the acquisition value, it does not increase the tax cost of the property.

However, this scenario allows you to offset said capital loss against other capital gains you may have in the same tax period, in accordance with the regulations of Personal Income Tax (LIRPF).

What you should do

It is fundamental to correctly identify the moment the taxable event occurs, distinguishing between the repayment of the main subsidy and the maturity of the late payment interest. Since managing these capital losses requires a precise analysis of IRPF regulations, it is necessary to assess each particular situation to ensure that the tax return correctly reflects these economic movements.