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V0628-16 16 February 2016 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · vivienda habitual

Inheritance Tax reduction for main residence not applicable if property was not the deceased's habitual residence

A query was raised regarding whether the reduction for the acquisition of the deceased's main residence applies when the deceased resided in a nursing home. The DGT ruled that the reduction is not applicable because the property did not constitute the habitual residence of the deceased.

The question raised

Whether, upon filing the Inheritance and Gift Tax return of the first person to pass away, the reduction for 'mortis causa' acquisition of the habitual residence under Article 20.2.c) of Law 29/1987, of December 18, which regulates the tax, is applicable.

The DGT's ruling

To apply the reduction provided in Article 20.2.c) of Law 29/1987, the property must be the habitual residence of the deceased person. The concept of habitual residence is determined according to Personal Income Tax regulations, requiring that the building constitutes the residence of the taxpayer. Since the property was not the habitual residence of the decedents in the years prior to death, said reduction cannot be applied.

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