Horizontal division of real estate: maintenance of values and acquisition dates

The determination of the acquisition value is a decisive factor for calculating capital gains or losses in Personal Income Tax (IRPF). A recurring issue arises when a community of property, derived from an inheritance, proceeds with the horizontal division of its assets.

What the DGT has ruled

The Dirección General de Tributos (DGT) has established that the horizontal division of a property does not constitute an asset alteration. In this scenario, the resulting properties maintain the same value and the same acquisition date as the original parent property.

The criteria focus on the dissolution of communities of property. If the allocation of elements strictly adheres to the ownership share, without any economic compensation or excess value between co-owners, no capital gain or loss occurs at the time of division. In the case analyzed, as dwellings of equal value were allocated according to each heir's share, the values and acquisition dates of the original inheritances are preserved.

What it means for you

If you are a co-owner of an inherited property and decide to carry out a horizontal division so that each party receives an independent unit, current regulations allow you to:

• Maintain historical cost: The acquisition value for future tax calculations will be the same as that of the parent property.
• Preserve seniority: The acquisition date is not updated to the moment of division; instead, the date of the original inheritance is maintained.
• Access reductions: For elements acquired before 1994, the reduction regime of the ninth transitional provision of Law 35/2006 (LIRPF) may be applied at the time of the final sale.

What should be done

It is fundamental that the allocation of assets is carried out by strictly respecting the ownership shares. Any economic compensation or the delivery of a higher-value asset that does not correspond to the share could transform the operation into an onerous transfer, generating an immediate tax obligation. Since every situation involving the division of a community of property presents technical particularities, it is necessary to assess each case individually to ensure that the allocation does not generate unwanted tax effects.