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V4190-16 3 October 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IP · actividad económica

Main residence of co-owners cannot be considered an asset used for rental activities

A query was raised regarding whether the main residence of co-owners in a community of property can be classified as an asset used for the economic activity of property rental to qualify for Wealth Tax exemptions. The DGT ruled that, as these properties are used for private needs, they are not considered assets used for business purposes and therefore cannot benefit from said exemption.

The question raised

Question raised: It is consulted whether the real estate constituting the habitual residence of the applicants can be considered as assets used for the purposes of the economic activity of leasing real estate, for the purposes of applying the exemption established in Article 4.Eight.One of the Wealth Tax Law; and the effects on the calculation of the income from the economic activity obtained by the community of the aforementioned amounts paid by the applicants.

The DGT's ruling

Real estate intended for the habitual residence of the co-owners does not constitute assets used for the purposes of the economic activity of leasing, as they are used for private needs. Therefore, the exemption from Wealth Tax provided for in Article 4.Eight.One of Law 19/1991 is not applicable. Likewise, payments for the use of these properties or their expenses do not affect the calculation of the income from the economic activity.

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