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V3269-20 30 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · mayor valor de adquisición

Debts of the homeowners' association paid by the purchaser do not count towards the higher acquisition value

The taxpayer asks whether paying the homeowners' association debts of previous owners, after acquiring a property at auction, can be added to the acquisition value to reduce capital gains. The DGT responds that it cannot, as such payment creates a right of credit against the former owners.

The question raised

Whether the amount paid in respect of debts with the community of owners, in accordance with Article 9.1. e) of Law 49/1960, can be considered an increase in the acquisition value of the property for the purposes of Article 35 of Law 35/2006 for the calculation of capital gains.

The DGT's ruling

The payment of community association debts by the new owner does not constitute an increase in the acquisition value of the property. The Horizontal Property Law establishes an encumbrance of the asset for the payment, but does not change the status of the former owners as debtors. The acquirer has a right of credit to claim reimbursement from the former owners, and the non-payment of such claim could result in a capital loss under the requirements of Article 14.2.k) of the Personal Income Tax Law.

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