The acquisition value for Personal Income Tax (IRPF) shall be the real purchase price

The calculation of capital gains or losses in Personal Income Tax (IRPF) following the sale of a property is a critical aspect of personal wealth management. A recent binding ruling from the Dirección General de Tributos (DGT) has specified which amount must be used as the acquisition value when the agreed price differs from the values declared in other taxes.

What the DGT has ruled

The inquiry raised whether it was possible to use an acquisition value higher than the price actually paid, based on the value declared and accepted in the Transfer Tax and Documented Legal Acts Tax (ITPAJD). The taxpayer intended to apply a value of 255,000 euros, despite the real purchase price being lower.

The DGT has determined that the acquisition value consists of the real purchase price plus the expenses and taxes inherent to the transaction. Following the jurisprudence of the Supreme Court, the Administration establishes that:

• If a value verification has been conducted for ITPAJD purposes, said verified value must be considered the real amount.
• If no such administrative verification exists, the value shall be that determined by Articles 34 and 35 of the IRPF Law; that is, the real price paid.

Therefore, the mere fact that a value is accepted in the ITPAJD does not allow for the artificial inflation of the acquisition value to reduce the taxable base in the IRPF if there was no value verification by the Administration.

What this means for you

For individuals selling real estate, this resolution implies that the value declared in the transfer tax cannot be used to reduce capital gains in the IRPF if it is higher than the price actually paid in the deed. The value that will serve as the basis for calculation will be the real price of the transaction, increased by the expenses and taxes incurred.

What you should do

It is necessary to verify that the amount recorded in the purchase deed coincides with the economic reality of the transaction. In the event of discrepancies between the price paid and reference values, the legal situation of each property must be assessed to avoid errors in the tax return that could lead to tax inspections.