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V2382-17 19 September 2017 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · usufructo

Tax must be paid on the full property value if usufruct is not registered in the Land Registry

The taxpayer intended to pay tax on only 30% of the property value, claiming a usufruct right dating back to 1982. The DGT ruled that, as this right is not recorded in the Land Registry, its existence cannot be proven, and tax must be paid on the total value of the asset.

The question raised

Whether, given the existence of a real right of usufruct over the property since 1982, in which a transfer for a period of 100 years was agreed, at this time only the percentage corresponding to the consolidation of ownership should be taxed for Transfer Tax and Documented Legal Acts Tax and, therefore, the tax rate should be calculated on 30% of the value of the property.

The DGT's ruling

The public faith of the registry presumes that registered rights exist and belong to their holder, but that which is not registered is presumed non-existent against third parties. As the usufruct does not appear in the Registry entries, it is not protected by public faith. Therefore, the tax base must be the total real value of the asset and not only the portion corresponding to the bare ownership.

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