Exemption from imputed real estate income for properties with no possible use

The Dirección General de Tributos (DGT) has issued a relevant criterion for taxpayers who own properties that, due to various technical or legal circumstances, cannot be inhabited or used. The central issue revolves around the obligation to impute real estate income in Personal Income Tax (IRPF) when the property is not available for effective use.

What the DGT has ruled

The Administration has determined that real estate income should not be estimated for properties that are in the construction phase. Likewise, this criterion extends to properties that, for urban planning reasons, are not capable of use. The core of the resolution establishes that the absence of the property's capacity for use prevents the generation of the income that the regulations of Law 35/2006 provide for urban or rural properties.

What this means for you

If you are an individual owner of a property that currently cannot be used, this criterion allows you to avoid an unnecessary tax burden. This applies in scenarios such as:

• Properties undergoing works or construction.
• Properties with urban planning restrictions that prevent their use.
• Buildings that are not used for an economic activity but lack habitability or legal use.

It is fundamental to understand that the exemption is not automatic. The burden of proof lies with the taxpayer, who must reliably demonstrate that the property is not capable of use through any means of proof admitted in Law. The Tax Administration will maintain the power to assess the sufficiency of such evidence during its verification processes.

What you should do

When possessing real estate assets under these conditions, it is necessary to collect all technical and legal documentation that supports the property's status. Urban planning certificates, technical construction reports, or administrative resolutions proving the impossibility of use are key elements. Since the assessment of this evidence is at the discretion of the Administration, it is necessary to analyze the strength of the documentation before proceeding to declare the non-imputation of income.