Heirs must use the value declared in Inheritance Tax to calculate capital gains

Determining the acquisition value of a real estate asset is a critical step in correctly calculating the capital gain or loss that must be taxed under Personal Income Tax (IRPF) following a sale.

What the DGT has ruled

The Dirección General de Tributos (DGT) has clarified the criteria applicable when the acquisition of a property occurs through inheritance. The acquisition value shall be that which has been declared or verified for the purposes of Inheritance and Gift Tax.

However, the ruling establishes a fundamental limit: this value may in no case exceed the market value of the asset at the time of the transfer. To obtain the total acquisition value, said amount must be taken and the expenses and taxes inherent to the acquisition must be added, with the exception that interest may not be included.

What this means for you

If you have received a property through inheritance and decide to sell it, the calculation of your tax benefit will not be based on the price paid by your predecessors, but on the value appearing in the Inheritance Tax settlement. This has direct implications for your IRPF taxable base:

• Calculation base: The amount declared in the inheritance will be your starting point for determining the capital gain.
• Market limit: If the value declared in inheritance tax is higher than the current market value, the latter shall prevail.
• Deductible expenses: You may add the expenses and taxes associated with the acquisition, but you must exclude interest of any kind.

What you should do

In the event of a future sale of an inherited asset, it is necessary to verify that the value declared in Inheritance and Gift Tax is correct and properly supported. It is essential to review the settlement of said tax to ensure that the acquisition value used in the IRPF return is the one established by current regulations. Since every financial situation presents particularities, it is recommended to assess your specific case to avoid errors in determining the capital gain.