Taxation of the gratuitous establishment of rights of first refusal and redemption

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the fiscal nature of the gratuitous establishment of preferential acquisition rights, such as the right of first refusal (tanteo) and the right of redemption (retracto). This resolution analyzes which tax must be applied when a right of this nature is transferred without economic consideration.

What the DGT has ruled

The query presented focused on the taxation of the acquisition of a right of first refusal and redemption without consideration. The body has ruled that the gratuitous establishment of these rights constitutes a lucrative transfer inter vivos.

As a consequence of this classification, the operation is not subject to Transfer Tax and Stamp Duty (ITP-AJD), but must be taxed under Inheritance and Gift Tax (ISD), in accordance with Law 29/1987. Likewise, it is established that the tax base for the calculation of the tax shall be the market value of the acquired right.

What it means for you

This ruling has a direct impact on individuals who receive rights over real estate free of charge, whether from family members or third parties. If you receive a preferential acquisition right without making a payment for it, the administration will not treat it as an operation subject to transfer tax, but as a gift.

This implies that the value that must be declared for tax payment is not zero, but the market value that the right holds at the time of the transfer. The correct valuation of this right is fundamental to complying with the tax obligations derived from the Inheritance and Gift Tax Law and the Civil Code.

What you should do

In an operation of this nature, it is necessary to precisely determine the market value of the right of first refusal or redemption intended to be established. Since the tax base depends on this value, an incorrect valuation could lead to inspections by regional or state tax authorities. It is recommended to assess each particular situation to ensure that the transfer is correctly categorized under the corresponding tax.