Calculating the acquisition value of inherited real estate for Personal Income Tax

Determining the acquisition value is a critical step when transferring an asset received through inheritance. An error in this calculation can lead to an incorrect settlement of the capital gain or loss for Personal Income Tax (IRPF).

What the DGT has resolved

After analyzing current regulations, the DGT has specified the composition of the acquisition value of an inherited property. According to the established criteria, this value is determined by the following elements:

• Inheritance value: The value assigned to the property according to the rules of the Inheritance and Gift Tax, subject to the market value limit.
• Inheritance Tax: The proportional part of the Inheritance and Gift Tax liability that has been paid for said asset.
• Expenses and taxes: The expenses and taxes inherent to the acquisition, expressly excluding interest.

The difference between the transfer value and this resulting acquisition value determines the capital gain or loss, which will be integrated into the savings tax base.

What it means for you

If you are an individual who has received real estate through inheritance and decides to sell it, you should not limit yourself to using only the value declared in the inheritance deed. To optimize your tax calculation, it is necessary to add the tax burden of the inheritance tax and the expenses derived from the acquisition. This adjustment is fundamental to reflect the economic reality of the transaction and to avoid paying excess tax on a capital gain inflated by the omission of these costs.

What you should do

In the event of a future transfer of inherited assets, it is necessary to collect all documentation proving both the value assigned in the Inheritance Tax and the receipts for the expenses and taxes paid during the acquisition process. Since the regulations of Law 35/2006 and the General Tax Law govern this calculation, it is necessary to assess each particular situation to ensure that the savings tax base is determined accurately.