7,3,7,1,1. Amortization

Amortization of the property

In most cases, the program calculates the amount of the deductible expense for amortization based on the data entered in the following sections:

It must necessarily indicate whether the acquisition of the property is for consideration or for profit (properties acquired by inheritance, donation). If one party acquired it for consideration and another for profit, you must check both boxes.
Acquisition date. If there is more than one date, the date corresponding to the first acquisition will be indicated.
It will indicate the date of transmission if it occurred during the year.
The number of days of duration of the lease contract. If you had to register more than one lease for that property, you will have to indicate the number of days of each Type of lease, the rest of the data (acquisition date, cadastral value,...) is transferred by the program.
The cadastral value that appears in the IBI receipt in proportion to its percentage of ownership.
The cadastral value of the construction in proportion to its percentage of ownership.
The percentage that represents the value of the construction with respect to the cadastral value is calculated by the program.
Acquisition amount. In acquisitions for consideration, it is the amount of the acquisition. In lucrative acquisitions, the value assigned for the purposes of the Inheritance and Donations tax will be taken as the acquisition amount, without it exceeding the market value (generally it will be the one that appears in the deed).
The amount of expenses and taxes corresponding to the acquisition of the property paid by the purchaser.
You must indicate the amount of the improvements made in previous years.
In the case of improvements made in 2020, you will have to enter the amount and the days of amortization. Keep in mind that in general the improvement affects the construction so the part that corresponds to the ground will not be excluded from it. The data related to the NIF of the person who carried out the work or service and the date of completion of the improvement are voluntary.

Amortization in special cases

In those cases in which it is not possible to make a comparison between the acquisition cost and the cadastral value with the data entered in the different boxes, it will be the taxpayer who has to calculate the amortization. In these cases, the taxpayer must indicate exclusively the type of acquisition: onerous, lucrative or both without completing any information in the "Depreciation of the property" section and will enter in the "Amortization in special cases" section the amount of amortization that has previously been calculated.

They are special amortizations among others:

When the taxpayer is the owner of the usufruct (whether or not he or she additionally owns another part in full ownership).
When the land and the construction have been acquired differently.
When only part of the property is rented (rental of a room...)
When you are the owner of a part of the property, the percentage of ownership varies during the year (due to having acquired or transferred a part).
When the property does not have a cadastral value assigned (recently built properties or properties abroad).
In the last year of amortization when, with the application of the general rule, an amount results that causes the total accumulated amortization to exceed the maximum amortizable value.

In the exceptional case in which the taxpayer chooses to apply an amortization percentage lower than 3%, the amount resulting from applying that percentage to the highest of: The cadastral value or the acquisition cost paid, without including the value of the land in both cases, will also be entered in this amortization section in special cases. However, remember that in a subsequent sale of the property the acquisition value will be reduced by the amounts that would have resulted from applying the 3% even if you had deducted, as amortization, a lower expense for having applied a percentage lower than 3%. %.

Examples of special amortizations

A taxpayer acquired the usufruct of a home by inheritance. The value for Inheritance and Donation Tax purposes is €55,000 and the amount of said tax paid on the occasion of this acquisition is €5,000. The house was rented all year and the rental amount is €800 per month.

Will mark lucrative acquisition
- If the usufruct were temporary and had a duration of 10 years
  
  “Amortization in special cases” = Acquisition cost/ duration of usufruct = 60,000/10 = 6,000
- If the usufruct were for life
  
  “Amortization in special cases” = 3% * 60,000 = 1,800
Whether the usufruct is temporary or for life, the amortization amount may not exceed the amount of the full income of the right, in this case: 800*12= 9,600
A taxpayer purchased 50% of a property for €150,000 and acquired the usufruct of 50% by donation with a value for Inheritance and Gift Tax purposes of €100,000. The amount of said tax paid on the occasion of this acquisition is €5,000 and the expenses inherent to the acquisition are €1,000. The cadastral value of the property is €90,000, with the construction value being €72,000. The property was rented all year, with the rental amount being €1,000 per month.

It will mark onerous and lucrative acquisition. By being the holder of two different rights, you will amortize:
- The right of usufruct: 3% * (100.00+5,000+1,000)=3,180
- Full ownership: The acquisition cost of the construction (150,000*80%) is greater than the cadastral value of the construction (72,000*50%). The amortization would be: 3% (150,000*80%)= 3,600
The amount of “Amortization in special cases” will be = 3,180 + 3,600 = 6,780
A taxpayer acquired a piece of land on 01/01/2016 for €30,000 with expenses of €1,000. On 12/01/2018 the construction of the home was completed and on 01/01/2020 he used it for rent. The construction cost is €150,000, expenses and taxes amount to €10,000. The cadastral value of the construction is €100,000.

It will mark onerous acquisition

To calculate amortization, the greater of: cadastral value of the construction (100,000) or the cost of construction (150,000+10,000)

"Amortization in special cases" = 3% (160,000) = 4,800
A taxpayer is the owner of 100% of a home acquired for consideration for €200,000. On 12/1/2020 you rent a room that represents 30% of the surface of the house. The cadastral value of the property is €100,000, with the cadastral value of the construction being €80,000.

It will mark onerous acquisition

Construction acquisition cost (200,000 *80%) = 160,000, which is greater than the cadastral value of the construction.

The room represents 30% of the property, so the cost of acquiring the room would be: (160,000*30%)= 48,000

The amortization corresponding to the room: (3%*48,000)= 1,140.

The amount of "Amortization in special cases" would be 1/12* 1,440= 120 (since the room is rented for only one month)
On 1/1/2016, a taxpayer bought 60% of a home for €80,000. On 10/01/2020 buy the other 40% for €40,000. The cadastral value is €100,000 and the construction value is €80,000.

It will mark onerous acquisition. To calculate amortization, the greater of:
- The cadastral value of the construction 80,000
- The construction acquisition cost (80,000 + 40,000)*80% = 96,000
The amortizable value will be: 96,000

The amount of “Amortization in special cases” will be = 3%*[(80,000*80%)+(40,000*80%)*3/12]=2,400
A taxpayer purchases a property for 200,000 euros to use as rental. The house, being recently built, has no cadastral value. The value of the land is estimated at 10%.

It will mark onerous acquisition

The value of the construction: (200,000*90%)= 180,000

The amount of “Amortization in special cases” will be = (3%*180,000) = 5,400

Example of amortization of a property acquired for consideration and profit (except for the case provided for in amortization in special cases)

On 01/01/2015, a taxpayer inherits 50% of a property, with the other 50% corresponding to his brother. The value for Inheritance and Donation Tax purposes is €60,000, the expenses and taxes paid in the acquisition are €3,000. On 08/01/2018 he bought his 50% from his brother for €80,000, paying €2,000 in expenses and taxes. The cadastral value of the property is €100,000, with the construction value being €80,000. The property was rented all year.
- It will mark onerous and lucrative acquisition
- Acquisition date 01/01/2015
- Number of days of duration of the contract 366
- Cadastral value (part corresponding to the percentage of ownership in the property) 100,000
- Cadastral value of the construction (part corresponding to the percentage of ownership in the property) 80,000
- Acquisition amount 140,000 (60,000+80,000)
- Expenses and taxes inherent to the acquisition 5,000 (3,000+2,000)
The amortization amount calculated by "Renta Web" will be = 3% *(116,000) = 3,480
On 01/01/2015, a taxpayer inherits 50% of a property, with the other 50% corresponding to his brother. The value for Inheritance and Donation Tax purposes is €50,000, the expenses and taxes paid in the acquisition are €3,000. On 08/01/2018 he bought his 50% from his brother for €80,000, paying €2,000 in expenses and taxes. The cadastral value of the property is €150,000, with the construction value being €120,000. The property was rented all year.
- It will mark onerous and lucrative acquisition
- Acquisition date 01/01/2015
- Number of days of duration of the contract 366
- Cadastral value (part corresponding to the percentage of ownership in the property) 150,000
- Cadastral value of the construction (part corresponding to the percentage of ownership in the property) 120,000
- Acquisition amount 130,000 (50,000+80,000)
- Expenses and taxes inherent to the acquisition 5,000 (3,000+2,000)
The amortization amount calculated by "Renta Web" will be = 3% *120,000 = 3,600

Example of amortization of a property on which an improvement has been made

In January I purchased an apartment for €120,000, the expenses and taxes paid were €10,000. Before dedicating it to rental, he carried out a renovation worth €30,000. The renovation ends in September and I rent the property in December. The cadastral value of the land is €100,000 and that of the construction €80,000.

Purchase date: 01/01/2020
Number of days of duration of the lease contract: 31
Cadastral value: 100,000
Cadastral value of the construction: 80,000
% of the cadastral value of the construction (calculated by the program): 80%
Acquisition amount: 120,000
Expenses and taxes inherent to the acquisition: 10,000
Improvements made in 2020:
NIF of the person who carried out the work (voluntary completion) Date (voluntary completion) Amount: 30,000 (the land part is not excluded). Amortization days: 31