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Deductible Debt: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 9 rulings · 2015–2024

Current position

In Wealth Tax, non-residents subject to tax by real obligation may deduct debts for capital invested in assets located in Spain. Deductibility depends on the purpose of the debt, which must be proven by any means valid under law to demonstrate that it was used for the acquisition of the real estate. In Inheritance Tax, only debts existing at the time of death are deductible.

The DGT's position remains constant regarding the requirement to prove the purpose of the debt for its deductibility for non-residents. A consistent application of deductibility based on the actual existence of the debt at the time of accrual is observed, as seen in rulings regarding inheritance and life insurance.

Turning points

  1. V0067-16

    Establishes that guarantees for future execution, such as an open-ended mortgage, do not constitute existing debt and are not deductible from the estate.

  2. V3112-20

    Specifies that in real obligations, the deductibility of the debt depends on its purpose for the acquisition of assets in Spain, regardless of the type of loan.

Analysis based on 9 of 9 rulings with a stated position. Updated 29 September 2026.

Rulings on this topic

9
V0393-24 12 Mar 2024

Foreign loan debt deductible for property purchase in Spain for Wealth Tax

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
obligación realpatrimonio netobase imponiblesujeto pasivodeuda deducible LIP — Ley 19/1991 del Impuesto sobre el Patrimonio art. 5.Uno.bLIP — Ley 19/1991 del Impuesto sobre el Patrimonio art. 9.Uno
Affects CompanyExpat · Non-residentIndividual
V3112-20 19 Oct 2020

Foreign loan debt used to purchase property in Spain is tax-deductible

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
obligación realpatrimonio netodeuda deduciblecapitales invertidossujeto pasivo LIP — Ley 19/1991 del Impuesto sobre el Patrimonio art. 5.Uno.bLIP — Ley 19/1991 del Impuesto sobre el Patrimonio art. 9.Dos
Affects CompanyExpat · Non-residentIndividual
V2581-18 20 Sept 2018

Mortgages securing third-party debt are not deductible for Inheritance Tax

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
masa hereditariahecho imponiblesujeto pasivobase imponibledeuda deducible LISD — Ley 29/1987 de Sucesiones y Donaciones art. 3.1.aLISD — Ley 29/1987 de Sucesiones y Donaciones art. 5.a
Affects CompanyExpat · Non-residentIndividual
V1440-17 7 Jun 2017

Non-secured loan for property construction deductible in Spanish Wealth Tax

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
deuda deducibleimpuesto sobre el patrimoniopréstamo no hipotecariojustificación de deudaafectación de deuda LIP — Ley 19/1991 del Impuesto sobre el Patrimonio art. 9.4LIP — Ley 19/1991 del Impuesto sobre el Patrimonio art. 25.1
Affects CompanyExpat · Non-residentIndividual
V1091-16 17 Mar 2016

Mortgage debt of the deceased may be deducted to determine the tax base

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
base imponiblevalor realdeuda deducibletransmisión mortis causamasa hereditaria LISD — Ley 29/1987 de Sucesiones y Donaciones art. 9.aLISD — Ley 29/1987 de Sucesiones y Donaciones art. 13.1
Affects CompanyExpat · Non-residentIndividual

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