Rental of inherited property: full taxation for the separate owner

There is a recurring confusion between the nature of assets in a marriage and the attribution of the income they generate. The Dirección General de Tributos (DGT) has clarified the tax treatment of income obtained from the lease of a property that belongs exclusively to one of the spouses due to an inheritance.

What the DGT has ruled

The query concerned whether the income from the rental of an inherited property should be taxed in its entirety by the taxpayer or whether it should be shared with their spouse, given that both are married under the community property regime (sociedad de gananciales). The DGT has determined that income is obtained based on its origin, regardless of the matrimonial economic regime applied.

The criterion establishes that capital income is attributed to the owners of the assets following the rules of legal ownership. Since it concerns a property that is a separate asset, acquired through inheritance, the legal ownership rests exclusively with the heir. Therefore, real estate capital income must be imputed entirely to the owner of the asset.

What it means for you

If you are the owner of a property acquired through inheritance, donation, or any title that makes it a separate asset, the income you receive from its rental does not form part of the community property mass for the purposes of income attribution in Personal Income Tax (IRPF). This implies that:

• The totality of the income must be declared in the owner's tax return.
• The community property regime does not allow these earnings to be shared with the spouse to reduce the individual tax burden.
• The legal ownership of the asset is the determining factor for the imputation of income.

What you should do

It is necessary to verify the legal nature of the assets that generate income within the family sphere. In cases where there are inherited properties or those acquired before marriage, the correct attribution of income in the tax return is fundamental to avoid discrepancies with the Tax Administration. It is recommended to assess each patrimonial situation individually to ensure that the imputation of income complies with current regulations.