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V1995-20 17 June 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · obligación real

Real property tax liability under Spanish wealth tax based on immovable asset composition

A German resident asks whether they are subject to Spanish real property wealth tax before making real estate investments. The DGT responds that they are currently not liable, but will be if, after the investment, real estate in Spain constitutes more than 50% of their entity's assets.

The question raised

First question raised: Whether, prior to making the new real estate investments in Spain, the taxpayer must pay Wealth Tax in Spain by real obligation.

The DGT's ruling

According to the Convention between Spain and Germany, holdings in a company whose assets consist of at least 50% in real estate located in Spain may be subject to taxation in Spain. Currently, the taxpayer does not pay tax because its real estate in Spain does not reach that percentage in the German entity. However, if after acquiring new real estate the value of these exceeds 50% of the assets of the entity of which they are the owner, it will be subject to tax by real obligation.

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What is published here, applied to a company or a specific case. The first meeting is free.

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