Limits on the 75% reduction for the transfer of rural estates

The application of tax benefits in the transfer of agricultural holdings requires a precise analysis of ownership and the matrimonial economic regime. A recent binding ruling from the Dirección General de Tributos (DGT) has delimited the scope of the 75% reduction provided for the transfer of rural estates, establishing strict criteria regarding which part of the transfer can benefit from this incentive.

What the DGT has resolved

The advisory body has determined that the 75% reduction for the transfer of rural estates must be applied exclusively to the percentage corresponding to the spouse who holds ownership of the agricultural holding, in accordance with their matrimonial economic regime. In the case analyzed, where a community property regime existed, the reduction is only applicable to the 50% that corresponds to the holder of the agricultural holding.

The resolution points out that it is not possible to apply said reduction to the portion acquired by the other spouse if they are not the holder of the agricultural holding. Consequently, if the reduction is applied to the entirety of the transfer without distinguishing ownership, an error is made in the tax settlement.

What this means for you

This interpretation directly affects individuals and spouses who carry out operations involving the transfer or assignment of rights over agricultural holdings, especially under community property or separation of assets regimes. If the agricultural holding is owned by one of the spouses, the tax reduction does not automatically extend to the portion belonging to the other spouse due to their economic regime.

For taxpayers, this implies that the correct determination of the taxable base must clearly distinguish between the portion belonging to the holder of the agricultural holding and the portion that does not, avoiding the improper application of reductions to the total transferred value.

What should be done

In the event of such an operation, it is necessary to verify the ownership of the agricultural holding and the applicable matrimonial economic regime. The correct settlement of the Transfer Tax, Documented Legal Acts and Mortuary Operations Tax (ITPAJD) requires breaking down the portion of the transfer that meets the requirements of current regulations (Law 19/1995, Law 58/2003, and Law 22/2009) from the portion that does not. It is recommended to assess each legal and patrimonial situation individually to ensure compliance with tax obligations.