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V0871-24 23 April 2024 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · extinción de condominio

Dissolution of joint property with excess adjudication may be subject to AJD tax rather than onerous transfers

A group of co-owners wishes to terminate their co-ownership of several properties by awarding full ownership to some members and compensating the others. The DGT determines that, provided certain requirements are met, the transaction is not subject to transfer tax on onerous transfers, but rather to tax on documented legal acts.

The question raised

Taxation under the Transfer Tax and Documented Legal Acts Tax.

The DGT's ruling

In the dissolution of communities of property over indivisible real estate, if the considerations are equivalent and proportional, the non-liability for transfer tax (art. 7.2.B TRLITPAJD) applies and it is taxed under documented legal acts. Compensation may be in cash, through the assumption of mortgage debt, or through the dation in payment of other assets that already form part of the community. The tax base shall be the value of the portion of the real estate acquired ex novo upon the disappearance of the participation of the transferring co-owner.

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