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V2702-21 8 November 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Capital gains from donating property to a local council are exempt from Personal Income Tax

A taxpayer inquired whether capital gains arising from the donation of a property to their local council are exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that such gains are exempt as the donation is made to a local authority.

The question raised

Whether the capital gain that could be generated would be exempt from Personal Income Tax (IRPF).

The DGT's ruling

The donation of assets other than money generates a variation in net worth that may result in a capital gain or loss. However, capital gains arising from donations to the entities specified in Article 68.3 of the Personal Income Tax Law (LIRPF) are exempt. Since Local Entities are included in the tax incentive regime for patronage under Law 49/2002, the gain resulting from the donation of real estate to a City Council is exempt from tax.

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