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V3591-20 17 December 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Registration costs for inherited property may be included in the acquisition value for Personal Income Tax

A taxpayer has enquired whether Land Registry fees paid after inheriting a property are deductible in the event of a future sale. The Directorate General for Tax Affairs (DGT) has ruled that these costs form part of the asset's acquisition value.

The question raised

Whether said expenses are deductible for Personal Income Tax purposes in the event of a future sale of the aforementioned property.

The DGT's ruling

The acquisition value of an inherited property is composed of the value resulting from the Inheritance and Gift Tax regulations, not exceeding the market value, plus the expenses and taxes inherent to the acquisition. Registration expenses are considered inherent expenses and must be distributed among the owners according to their ownership share. Such expenses must be substantiated by means of proof admitted in Law.

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