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V1492-19 21 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Donating a property generates a capital gain or loss for Income Tax purposes

A taxpayer inquired about the taxation of donating properties to their daughters for use as their primary residence. The DGT ruled that such a donation results in a change in net wealth that must be quantified according to the rules governing gratuitous transfers.

The question raised

Taxation of the donation in the Personal Income Tax.

The DGT's ruling

The donation of a dwelling generates a capital gain or loss due to the alteration in the composition of the assets. In gratuitous transfers, the acquisition and transfer values shall be determined in accordance with the rules of the Inheritance and Gift Tax, without exceeding the market value. If a capital loss is generated, it shall not be computable as it constitutes a gratuitous transfer. The exemption for the transfer of a primary residence would only apply if the donor is over 65 years of age or a person in a situation of dependency.

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