Skip to content
Back to index
V1728-18 18 June 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Transfer of foreclosed property is exempt from Income Tax if it is the primary residence and requirements are met

A query was raised regarding Income Tax (IRPF) treatment when a property is transferred during mortgage foreclosure proceedings. The Directorate General for Taxes (DGT) indicates that the gain is exempt if the property is the owner's primary residence and the owner has no other assets to settle the debt.

The question raised

Taxation under Personal Income Tax regarding the delivery of a residence in a mortgage foreclosure proceeding.

The DGT's ruling

The transfer of the primary residence in judicial or notarial mortgage foreclosures is exempt from Personal Income Tax (IRPF) if the requirements of the Personal Income Tax Law (LIRPF) are met. To this end, it must be the primary residence of the debtor or guarantor, and the owner must not have other sufficient assets or rights to satisfy the debt. If these requirements are not met, a capital gain or loss is generated which is integrated into the savings tax base.

Book your free first meeting