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V5310-16 15 December 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retribución en especie

Housing provided to a porter may constitute benefits in kind if the payment is below market value

A homeowners' association has enquired whether providing housing to an employee, with a monthly payroll deduction, constitutes a benefit in kind. The Directorate General for Taxes (DGT) has ruled that if the deducted amount is lower than the normal market price, the difference is considered income in kind.

The question raised

Existence of benefits in kind for Personal Income Tax (IRPF) purposes.

The DGT's ruling

The use of assets for private purposes at a price below the normal market value constitutes benefits in kind. In the case of housing owned by the payer, the valuation is based on the cadastral value (5% or 10% depending on the case), and the amount must be adjusted according to the proportion between the amount paid and the market value. Water, electricity, and heating consumption are valued at their normal market value.

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