Deduction of notary fees in the calculation of capital gains for Personal Income Tax

The correct determination of the transfer value is a decisive factor for calculating capital gains or losses in Personal Income Tax (IRPF). A recent ruling from the Dirección General de Tributos (DGT) has clarified the treatment of certain costs associated with the disposal of assets.

What the DGT has resolved

The issue raised was to determine whether notary fees can be considered part of the lower transfer value for the calculation of capital gains. The DGT has resolved that the transfer value is established by the actual amount of the disposal, after deducting the inherent expenses and taxes paid by the transferor.

In this sense, the body confirms that notary fees are expenses inherent to the transfer. This criterion also extends to other costs, such as registration fees for mortgage cancellation or real estate fees. For this deduction to be effective, the taxpayer must prove such expenses through any means of evidence valid under the law.

What it means for you

If you are an individual performing the transfer of an asset, such as a home, you have the possibility of reducing the taxable base of the capital gain by including the costs you have assumed to formalize the operation. By increasing the deductible expenses, the net profit on which you are taxed decreases, which directly impacts the amount of tax to be paid.

This criterion is applicable as long as the expenses have been paid by the transferor and the necessary documentation is available to demonstrate the disbursement.

What you should do

When transferring assets, it is fundamental to keep all documentation that proves the costs associated with the operation. To ensure the correct application of this criterion, you must have:

• Original notary invoices.
• Proof of payment for real estate fees.
• Documentation of registration expenses.

Each transfer situation has particularities that must be analyzed to ensure that the tax settlement complies with current regulations.