Acquisition value for Personal Income Tax (IRPF) following a Transfer Tax (ITP) review

The determination of the acquisition value of a property is a decisive factor in calculating capital gains or losses for Personal Income Tax (IRPF). A recent ruling from the General Directorate of Taxes (DGT) clarifies which amount must be used when the administration has intervened in the property valuation during the settlement of Transfer Tax (ITP).

What the DGT has ruled

The query concerned which value should be considered the acquisition value to calculate the capital result in a future sale. The DGT has indicated that the acquisition value is composed of the actual purchase price plus the expenses and taxes inherent to the transaction.

However, following the jurisprudence of the Supreme Court, the administration has clarified that if the Autonomous Community performs a verification of ITP values and determines an amount different from the one declared, said verified value must be considered the actual amount for IRPF purposes. In this sense, the administrative review of the transfer tax has a direct impact on the calculation base of the income tax.

What this means for you

If you are a property owner and the Autonomous Community has conducted a review of the values declared in the ITP, the value stated in said verification will be the one you must use to calculate your capital gain or loss at the time of sale. This implies that the acquisition value could be higher than what you initially recorded in your purchase deed, which would alter the tax outcome of the transaction.

What you should do

It is fundamental to maintain an accurate record of all settlements and value verification rulings issued by the regional authorities. In the event of an ITP review, the new resulting value must be correctly integrated into your personal wealth accounting to avoid errors in your IRPF declaration when the transfer of the asset occurs. It is recommended to assess each particular situation to ensure that the acquisition value faithfully reflects the tax reality following the administration's intervention.