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V1900-25 14 October 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · cesión gratuita

Free transfer of a property to a nephew triggers imputed rental income

A person enquires about the tax implications of transferring a second property freely to their nephew. The DGT responds that if the gratuitous nature is proven, there are no capital gains from real estate, but imputed rental income based on cadastral value must be recognised.

The question raised

Taxation of the operation under Personal Income Tax.

The DGT's ruling

If it is proven that the transfer of the real estate is free of charge, the owner does not obtain income from real estate capital. However, as it concerns urban real estate that does not generate capital income, the imputation of real estate income must be carried out pursuant to Article 85 of the Personal Income Tax Law (LIRPF). The gratuitous nature must be substantiated by the taxpayer through means of proof admitted under Law.

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