Acquisition value for Personal Income Tax: real cost prevails over reference value

Determining capital gains or losses in the transfer of real estate is a critical aspect of the Income Tax return. A recurring question arises when there is a discrepancy between the price paid for the property and the reference value established for the Transfer Tax and Documented Legal Acts Tax (ITPAJD).

What the DGT has resolved

The Dirección General de Tributos (DGT) has clarified that, for the calculation of capital gains or losses in Personal Income Tax (IRPF), the acquisition value must be the actual purchase amount. This value is composed of the sum of the following elements:

• The actual amount paid for the property at the time of purchase.
• The cost of investments and improvements made.
• The expenses or taxes inherent to the acquisition.

The ruling establishes that this calculation must be carried out regardless of the tax base determined for the Transfer Tax and Documented Legal Acts Tax. In other words, the ITPAJD reference value does not substitute the real acquisition cost for IRPF purposes.

What it means for you

If you are a property owner and decide to sell, the calculation of your capital gain or loss will not be based on the administration's reference values for the transfer tax, but on what you actually paid and the associated costs. This is relevant because an incorrect calculation base could lead to an erroneous tax settlement, directly affecting the amount of the gain or loss you must declare in your IRPF.

What you should do

It is fundamental to keep all documentation proving the actual purchase amount, as well as invoices for improvements, investments, and the tax or management expenses linked to the acquisition. Since the regulations of Law 35/2006 (LIRPF) and Law 58/2003 (General Tax Law) govern this process, having an accurate record of costs is essential to ensure the tax base is correct. It is recommended to assess each particular situation to determine the exact impact on your income tax return.