Calculation of capital gains in real estate sales: DGT criteria

The precise determination of capital gains or losses in the transfer of real estate is a critical aspect of the Personal Income Tax (IRPF) declaration. An incorrect valuation of amounts can lead to errors in the calculation of the taxable base.

What the DGT has ruled

The Dirección General de Tributos (DGT) has specified the elements that comprise the acquisition value and the transfer value of a property. According to the established criteria, the acquisition value consists of the actual purchase amount plus the expenses and investments inherent to the asset. In cases where the property was acquired gratuitously, the rules of the Inheritance and Gift Tax (ISD) will apply, provided that such value does not exceed the market value.

For its part, the transfer value is defined as the actual sale amount, on the condition that it is not lower than the market value. From this amount, the expenses and taxes that the transferor had to pay to carry out the operation must be deducted.

What it means for you

For individuals selling a property, this criterion establishes a clear methodology for identifying which concepts are deductible. It is not enough to consider the purchase and sale price; it is necessary to correctly integrate and deduct the associated costs. Among the expenses that can be included to adjust these values are:

• Notary fees.
• Registry fees.
• Management services.
• Appraisal costs.
• Intermediation commissions.

It is fundamental that these amounts are duly documented so that they can be considered in the calculation of the capital gain.

What you should do

In a real estate purchase and sale operation, it is necessary to collect all documentation supporting the expenses and investments made. The correct application of Law 35/2006 (LIRPF) and Law 58/2003 (General Tax Law) requires that the declared values match the economic reality of the transaction. It is recommended to assess each particular situation to ensure that the calculation of the capital gain or loss is exact and complies with current regulations.