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V1919-17 19 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Compensation for expropriation of leasehold rights is taxed as a capital gain in Personal Income Tax

A tenant received compensation due to an urban planning scheme that required them to vacate their home. The DGT has ruled that this payment constitutes a capital gain subject to taxation.

The question raised

Taxation under Personal Income Tax of the compensation.

The DGT's ruling

The compensation received for the expropriation of leasehold rights constitutes an alteration in the composition of the assets which generates a capital gain. As the rights were acquired before 2006, the reduction provided for in the ninth transitional provision of the Personal Income Tax Law must be applied. The gain must be attributed to the tax period in which the compensation is received and taxed within the savings tax base.

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