Inheritance and sale expenses may be included in the acquisition value of a property

The calculation of capital gains or losses in the transfer of inherited real estate is a critical point in the Personal Income Tax (IRPF) declaration. A recent resolution from the Dirección General de Tributos (DGT) clarifies which concepts can be added to the acquisition value to optimize the taxable base in the event of a subsequent sale.

What the DGT has ruled

The query concerned whether the expenses and taxes derived from an acquisition for gratuitous reasons (such as an inheritance) can be considered part of the acquisition value to determine the capital gain. The DGT has ruled that the acquisition value is composed of the value determined according to the rules of the Inheritance and Gift Tax, increased by the proportional part of the expenses and taxes inherent to said acquisition.

Among the concepts that can be included are:

• Inheritance and Gift Tax itself.
• Notary and registry fees.
• Management and advisory fees.
• The Tax on the Increase in the Value of Urban Land (IIVTNU).

What this means for you

If you are an individual who has inherited a property and plans to sell it in the future, this interpretation is relevant for calculating your tax burden. By including these costs in the acquisition value, the transfer value is reduced relative to the cost value, resulting in a lower capital gain and, consequently, a lower tax impact on the IRPF.

It is fundamental to take into account that these expenses must be proportional to the ownership share held by the heir and, crucially, must be duly justified through the corresponding documentation.

What you should do

To ensure the correct application of this criterion, it is necessary to keep all invoices and proofs of payments made during the succession process and the subsequent transfer. Notary and registry documentation, as well as tax payment receipts, are essential to prove the totality of the expenses intended to be included in the value of the asset. Since every financial situation presents particularities, it is recommended to assess each case individually to ensure compliance with current regulations.