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V2830-20 22 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IP · impuesto sobre el patrimonio

Property in Málaga subject to Wealth Tax and deemed income for Income Tax purposes

A resident of Melilla inquired whether a property located in Málaga is subject to Wealth Tax and if tax benefits may apply. The Directorate General for Taxes (DGT) ruled that the property must be taxed and that the taxpayer may access the deduction for income obtained outside Melilla, provided they meet the necessary residency and wealth requirements.

The question raised

Whether the property is subject to Wealth Tax and whether any tax benefit would be applicable.

The DGT's ruling

The property in Málaga forms part of the tax base for Wealth Tax and must be valued according to its cadastral or acquisition value. Likewise, it generates imputed income for Personal Income Tax purposes as it is neither a habitual residence nor used for economic activity. The taxpayer could apply the deduction for income obtained outside of Melilla if they have resided there for at least three years and hold one third of their net wealth in said city.

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