diff --git a/idea/formatter/src/org/jetbrains/kotlin/idea/formatter/kotlinSpacingRules.kt b/idea/formatter/src/org/jetbrains/kotlin/idea/formatter/kotlinSpacingRules.kt
index ffbf371f3d7..cd2b967a830 100644
--- a/idea/formatter/src/org/jetbrains/kotlin/idea/formatter/kotlinSpacingRules.kt
+++ b/idea/formatter/src/org/jetbrains/kotlin/idea/formatter/kotlinSpacingRules.kt
@@ -236,6 +236,7 @@ fun createSpacingBuilder(settings: CodeStyleSettings, builderUtil: KotlinSpacing
             beforeInside(CLASS, TokenSet.create(BODY, CLASS_BODY)).lineBreakInCode()
             beforeInside(OBJECT_DECLARATION, TokenSet.create(BODY, CLASS_BODY)).lineBreakInCode()
             beforeInside(PROPERTY, WHEN).spaces(0)
+            beforeInside(PROPERTY, LABELED_EXPRESSION).spacesNoLineBreak(1)
             before(PROPERTY).lineBreakInCode()
 
             after(DOC_COMMENT).lineBreakInCode()
diff --git a/idea/testData/formatter/LabeledExpression.after.kt b/idea/testData/formatter/LabeledExpression.after.kt
index 4bf1c967130..34681e6598b 100644
--- a/idea/testData/formatter/LabeledExpression.after.kt
+++ b/idea/testData/formatter/LabeledExpression.after.kt
@@ -38,3 +38,7 @@ fun test4() {
 
     }
 }
+
+fun test5() {
+    L1@ val x: Int = 42
+}
\ No newline at end of file
diff --git a/idea/testData/formatter/LabeledExpression.kt b/idea/testData/formatter/LabeledExpression.kt
index bf9b0f7c2aa..f8f766b52cf 100644
--- a/idea/testData/formatter/LabeledExpression.kt
+++ b/idea/testData/formatter/LabeledExpression.kt
@@ -37,4 +37,8 @@ fun test4() {
     {
 
     }
+}
+
+fun test5() {
+    L1@   val x: Int = 42
 }
\ No newline at end of file