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V0663-25 14 April 2025 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · principio de calificación

Tax treatment of contribution differences in home purchase depends on whether deemed loan or gift

A person buys a property with 50% co-ownership but contributes only 20% of the initial payment, while their partner contributes 80%. The tax authority states that the nature of their agreement determines whether tax is due under Inheritance and Gifts Tax or Transfer Tax.

The question raised

Whether any type of tax must be paid because the partner is going to pay more money at the entry of the apartment, even though in the deeds the apartment is to be 50 percent for one.

The DGT's ruling

If the intention is for the consultant to return the money, it is classified as a loan, which is subject to but exempt from Transfer Tax (ITP). If the intention is for the partner not to recover the money, it is classified as a donation, which triggers the taxable event for Inheritance and Gift Tax. The Administration has the power to perform the actual legal classification of the act regardless of the designation given by the parties.

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