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V1198-17 18 May 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Donating real estate generates a capital gain subject to age-based reductions

A taxpayer has enquired about the tax treatment of donating a warehouse built in 1980 to their children. The DGT states that the transaction generates a capital gain and explains how to apply reductions for assets acquired before 1994.

The question raised

Tax treatment of said operation under Personal Income Tax.

The DGT's ruling

The donation of real estate generates a capital gain or loss due to the variation in the value of the assets. In gratuitous transfers, the transfer value shall be that resulting from the Inheritance and Gift Tax regulations. Capital losses shall not be computed in transfers by acts of liberality. As it is real estate acquired before 1994, a reduction may be applied to the portion of the gain generated before January 2006 pursuant to the ninth transitional provision.

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