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V2464-22 30 November 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Seniority reduction may apply to capital gains from property acquired before 1995

A taxpayer has enquired whether the Ninth Transitional Provision of the Personal Income Tax Act (LIRPF) can be applied when selling a rural estate inherited in 1978. The Directorate General for Taxes (DGT) explains how to calculate the reduction on gains generated before 2006 based on the transfer value and the years of ownership.

The question raised

Request to determine whether the Ninth Transitional Provision of the Personal Income Tax Law is applicable for the purpose of determining the potential capital gain or loss in the transfer.

The DGT's ruling

The transfer generates a capital gain or loss pursuant to Article 33 of the Personal Income Tax Law (LIRPF). For assets acquired before December 31, 1994, the Ninth Transitional Provision allows for a reduction on the portion of the gain generated before January 20, 2006. The calculation of said reduction depends on whether the transfer value and other elements meet certain thresholds of 400,000 euros and on the number of years of ownership until December 31, 1996.

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