Deductible expenses

In order to determine the net return on real estate capital all expenses necessary to obtain may deducted from the gross returns, as well as the amounts allocated to the amortization of the property and other assets transferred it, provided that they correspond to its effective depreciation.

In the case of leases of properties subject to and not exempt from Value Added Tax (VAT) or the Canary Islands General Indirect Tax (IGIC), deductible expenses will be computed excluding the VAT or, where appropriate, the IGIC.

1. Interest and other expenses for financing, conservation and repair of the property
2. Other expenses necessary to obtain returns
3. Amounts intended for amortization
4. Compensation for lease contracts prior to May 9, 1985