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V0135-22 27 January 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Capital gains reduction may apply to the transfer of rural property acquired before 1995

A owner of rural property acquired in 1985 has requested guidance on calculating capital gains or losses when transferring the asset to a company. The DGT clarifies that the transitional regime for assets acquired before 1995 must be applied, allowing for a reduction on the portion of the gain generated before 2006, subject to certain transfer value limits.

The question raised

Method for calculating capital gains or losses in Personal Income Tax.

The DGT's ruling

The capital gain or loss is the difference between the transfer and acquisition values pursuant to Articles 35 and 36 of the Personal Income Tax Act (LIRPF). For assets acquired before December 31, 1994, the ninth transitional provision allows for a reduction on the portion of the gain generated before January 20, 2006. This reduction is contingent upon the sum of the transfer value and the result of previous operations not exceeding 400,000 euros, applying a coefficient of 11.11% for each year of holding from the date of acquisition until December 31, 1996 (excluding the first two years).

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