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V3051-14 7 November 2014 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · transmisiones patrimoniales onerosas

Redistribution of property ownership shares between co-owners subject to transfer tax

Two married couples owning property as co-owners intend to allocate one home to each through a deed of dissolution of co-ownership. The DGT has ruled that the operation does not constitute a dissolution, but rather an exchange of ownership shares, which must be taxed under transfer tax (transmisiones patrimoniales onerosas).

The question raised

Taxation of the operation.

The DGT's ruling

The operation consists of a redistribution of shares where the co-owners exchange undivided interests, which constitutes a barter and not a dissolution of the community of property. As the co-ownership persists between the new holders, the transfer of the undivided shares is subject to the modality of onerous asset transfers. The tax base shall be the real value of the transferred shares. The deed must also be taxed for the declaration of new construction and horizontal division according to the rules of the tax base of the RITPAJD.

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