Imputation of real estate income for co-owned properties

The Directorate General of Taxes (DGT) has issued a relevant criterion for individuals who share the ownership of a property. The inquiry focused on determining whether co-owners must pay tax on the imputation of real estate income when the property serves as a primary residence for one of them, but not for the other.

What the DGT has ruled

The body has ruled that each co-owner must carry out the imputation of real estate income established in Article 85 of the Personal Income Tax (IRPF) Law regarding their share of ownership of the property, provided that said property does not constitute their own primary residence. In this specific case, the DGT points out that the legal conditions for taxation are met, as there is no real right of enjoyment over the undivided share that one sibling cedes to the other.

What this means for you

This criterion has a direct impact on individuals who own properties jointly. If you are a co-owner of a property and it is not your primary residence, you are obliged to declare the real estate income corresponding to your percentage of ownership in your IRPF. The fact that the other co-owner does use the property as their primary residence does not exempt the second owner from their tax obligation for their respective share.

• The obligation to impute income arises from the ownership of the undivided share.
• It is not necessary for the property to be rented for the imputation to exist.
• The primary residence of one co-owner does not nullify the obligation of the other.

What you should do

It is necessary to analyze the ownership situation of your properties and verify whether the requirements for a primary residence are met for each owner. Since the regulations of the IRPF Law establish specific conditions for the exemption of this income, it is fundamental to evaluate the nature of the occupation and the existence of real rights of enjoyment. It is recommended to assess each particular situation to ensure compliance with tax obligations according to the General Tax Law.