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V0695-24 15 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Mandatory transfer of land to local councils does not trigger capital gains tax

A taxpayer accepts an inheritance of land that must be transferred free of charge to the local council for urban development purposes. The Directorate General for Taxes (DGT) rules that this does not constitute a capital gain.

The question raised

Whether such a transfer would give rise to a capital gain in Personal Income Tax.

The DGT's ruling

Mandatory transfers of land to Municipalities constitute urban planning charges. Upon accepting the inheritance and immediately transferring the land, no alteration in the composition of the assets occurs. Therefore, there is no capital gain or loss pursuant to Article 33 of the Personal Income Tax Law.

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