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V2120-21 15 July 2021 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · valor de adquisición

Acquisition costs and taxes must be included in property valuations for Wealth Tax

A taxpayer inquired whether property valuation for Wealth Tax purposes should be based solely on the purchase price or include associated costs, and whether personal income tax (IRPF) depreciation should be deducted. The Directorate General for Tax (DGT) ruled that costs and taxes inherent to the purchase must be included, but depreciation should not be deducted.

The question raised

First. Determining the valuation of the dwelling for Wealth Tax. Whether one must only consider the purchase value appearing in the deeds or whether the purchase and sale expenses must also be added.

The DGT's ruling

The valuation of real estate for Wealth Tax shall be the highest of three values: the cadastral value, the value verified by the Administration for other taxes, or the acquisition value. The acquisition value includes the actual amount plus the cost of investments, improvements, and the expenses and taxes inherent to the acquisition (such as VAT, ITPAJD, notary, and registry fees), excluding interest. This value may not be reduced by the depreciation claimed in Personal Income Tax.

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