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V2554-21 21 October 2021 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · extinción de condominio

The tax base for AJD in the dissolution of co-ownership is the value of the acquired share

A query was raised regarding whether the tax base for Stamp Duty (AJD) upon the dissolution of a co-ownership should be the total value of the property or only the value of the share being acquired. The Directorate General for Tax (DGT) ruled that it must only be the value of the share that ceases to belong to one co-owner and is acquired by the other.

The question raised

Whether the tax base for the Tax on Documented Legal Acts corresponding to the dissolution of co-ownership must be the total value of the property or only 50 percent, given that the taxpayer was already the owner of the remaining 50 percent prior to the dissolution of the co-ownership.

The DGT's ruling

In the dissolution of co-ownership with the allocation of an indivisible asset to a co-owner, the tax base for the AJD shall be the portion of the property value corresponding to the co-owner whose interest ceases to exist and is acquired by the other. It cannot be equivalent to the total value of the asset, as economic capacity is limited to the fractional share being transferred.

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