Pieter Janssens lives in Ghent and since 2012 has owned a flat in Benidorm, bought for 140,000 € plus 11,000 € of costs. In 2019 he gave it a complete overhaul: he painted it, replaced the boiler, enclosed the terrace to gain a bedroom, installed air conditioning where there had been none and put in a new kitchen. He also paid a builder cash in hand to fix some tiles. In 2026 he is selling for 215,000 € and his question is a simple one: how much of what I spent on the renovation lowers my tax?
The line the rules draw
Article 35.1.b of the IRPF Law (Spanish personal income tax), which applies to non-residents through article 24.4 of the IRNR Law (the law on non-resident income tax), adds to the acquisition value "the cost of the investments and improvements made to the assets acquired". It does not mention repairs. To know what a repair is, the IRPF Regulations offer a useful clue in article 13.a, when dealing with the expenses deductible from rental income: repair and upkeep are the expenses "incurred regularly for the purpose of maintaining the normal use of the assets", such as painting or fixing installations, and those for the "replacement of elements, such as heating installations, lifts, security doors or others". And it adds that amounts spent on "extension or improvement" are not.
From this comes the practical test. Maintaining what is there, or replacing it with something equivalent, is a repair. Extending, adding something that did not exist or appreciably increasing the capacity, performance or useful life of the property is an improvement.
Pieter's renovation, job by job
| Work | Cost | Classification | Does it add? |
|---|---|---|---|
| Painting the whole flat | 2,400 € | Repair: maintains normal use | No |
| Replacing the boiler with an equivalent one | 1,900 € | Replacement of an element | No |
| Enclosing the terrace to make a bedroom | 8,500 € | Extension of the usable floor area | Yes |
| Air conditioning where there was none | 4,200 € | New installation | Yes |
| Complete new kitchen | 12,000 € | Depends on the scope | Debatable |
| Tiles, paid in cash with no invoice | 3,000 € | A repair and, besides, no proof | No |
The kitchen is the usual borderline case. If units and appliances are swapped for similar ones, it looks more like a replacement. If the space is redistributed or enlarged, installations are moved or elements are added that did not exist before, the case for calling it an improvement grows stronger. A detailed invoice helps support one view or the other. The prudent course is not to assume that it adds.
How much the result changes
Let us take the two possible scenarios for the kitchen:
- Base acquisition value: 140,000 + 11,000 = 151,000 €.
- Safe improvements: 8,500 + 4,200 = 12,700 €.
- Prudent scenario, without the kitchen: 151,000 + 12,700 = 163,700 €.
- Scenario with the kitchen: 163,700 + 12,000 = 175,700 €.
- Transfer value: 215,000 − 6,450 of estate agent's fees = 208,550 €.
- Prudent gain: 208,550 − 163,700 = 44,850 €; tax at 19 %: 8,521.50 €.
- Gain with the kitchen: 208,550 − 175,700 = 32,850 €; tax: 6,241.50 €.
- The buyer's withholding: 3 % of 215,000 = 6,450 €.
With the kitchen, Pieter gets 208.50 € back. Without it, he has to pay 2,071.50 €. The painting, the boiler and the tiles change nothing in either scenario.
Presenting as an improvement what was maintenance reduces the gain, but it is one of the first things a tax check reviews. If the authorities do not accept the classification, they assess the difference with interest and may consider whether an offence was committed. When a job is doubtful, it is worth documenting well why it is considered an improvement and accepting that the outcome is not guaranteed.
Without an invoice and a bank payment there is nothing to add
Even if a job is clearly an improvement, the law requires its cost to be proved. What supports an item is:
- An invoice in the owner's name, with the contractor's tax number, the date and a description of the work. An invoice that only says "various works" is hard to defend.
- Proof of payment: a transfer or a debit from the owner's account.
- If the work required a licence or notice to the town hall, the licence and the fees paid, which are also part of the cost of the improvement.
- A project or accepted quote, where there is one.
The builder paid in cash is the example of what gets lost: even if it had been an improvement, without an invoice or a bank trail there is no way to prove it. If the contractor was obliged to invoice and did not, asking now for an invoice dated back to that time raises problems of its own; it is not something we can recommend.
If Pieter had let it, the improvement is depreciated
Pieter used the flat only for holidays, so the calculation above is complete. Had he let it, there would be a second adjustment. Improvements are depreciated from the moment they are made, just like the building, and that depreciation is subtracted from the acquisition value. An 8,500 € enclosure made in 2019 and let until 2025 would add 8,500 € and then subtract the depreciation for those years. This is explained in I let the flat: does that count against me when I sell?.
And there is a second consequence. For a European Union resident who lets, repairs are a deductible expense against the rent in the year they are carried out, within certain limits. Improvements, on the other hand, are not deducted in one go but through depreciation. Whatever has already been deducted as a rental expense cannot later be added to the purchase value: that would be counting it twice.
Works carried out by the owners' association
Derramas, the special levies raised by the comunidad de propietarios (the owners' association of the building), follow the same logic. A levy to paint the façade or repair the roof is upkeep. One to install a lift where there was none is an improvement, and the part the owner paid adds to their purchase value, provided there is a record of the general meeting's resolution, the split and the payment. It is a case that is often forgotten and that can matter in older buildings.
If you send us the renovation invoices through the property sale form, we will classify them one by one before preparing the Modelo 210, the non-resident's tax return.
The other costs that add
Improvements are one part of the acquisition value, but not the only one. The tax paid on purchase, the notary, the land registry and the gestoría (the administrative agency that handles paperwork) add too, and mortgage interest does not. All of that is in which costs can I add to the purchase value, and the guide improvement or repair when you sell develops the distinction with more cases, such as windows, plumbing or floors.
If the renovation was paid in another currency, because a firm from your own country was hired, the amount is converted into euros at the exchange rate on the date of payment; we look at this in I bought in pesetas or in another currency.
Works done by the previous owner
Only the improvements you paid for add. Article 35.1.b of the IRPF Law refers to costs "paid by the acquirer". If you bought a flat that the previous seller had just renovated, that renovation is already inside the price you paid and cannot be added again. The same applies to works paid for by a relative or a company: even if the flat is yours, if you did not pay for them, adding them is debatable. And if the renovation was paid between signing the arras (the deposit contract that precedes the deed) and the deed itself, you should check that the invoices are in your name and dated after the flat became yours, or at least that the paperwork shows this.
Classifying the works and calculating the gain with its supporting documents are part of the Salama Tax service for non-residents selling a property.