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V3470-20 30 November 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Donation of primary residence by individuals over 65 is exempt from Income Tax

A taxpayer inquired about the taxation of a property donation involving a residence used by their parents and uncle, all over the age of 65. The Directorate General for Taxes (DGT) ruled that the capital gain for the donors is exempt and that the recipients are not subject to Income Tax upon receiving the asset.

The question raised

Taxation of the transaction for Personal Income Tax purposes.

The DGT's ruling

The donation generates a capital gain or loss calculated as the difference between the transfer value (in accordance with Inheritance and Gift Tax regulations) and the acquisition value. If the donors are over 65 years of age and transfer their primary residence, the resulting capital gain is exempt. The donees are not taxed under Personal Income Tax for the income received, as this is subject to Inheritance and Gift Tax.

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