Skip to content
Back to index
V0393-24 12 March 2024 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · obligación real

Foreign loan debt deductible for property purchase in Spain for Wealth Tax

A non-resident asks whether a foreign loan used to buy property in Spain can be deducted from Wealth and Inheritance Tax. The DGT confirms that the debt is deductible if the purpose is proven to be the property purchase, but does not address Inheritance Tax or prior years' adjustments.

The question raised

Whether the amount of the debt derived from the loan linked to the acquisition of the real estate located in Spain would be deductible for the purposes of determining the taxable base of Wealth Tax, as well as Inheritance and Gift Tax. And, in the event that the aforementioned loan could be deducted, whether the failure to deduct it in the tax returns submitted by the inquirer could be rectified, provided they are not time-barred.

The DGT's ruling

In Wealth Tax, non-residents subject by real obligation may deduct debts for capital invested in assets located in Spain. The debt is deductible based on its purpose, provided it is proven that it was used for the acquisition of the real estate through any means valid under law. Regarding Inheritance and Gift Tax, the inquiry is inadmissible as it was not formulated by the taxpayer.

Book your free first meeting