The determination of the amortizable base of properties acquired free of charge for the calculation of the returns on real estate capital of the Personal Income Tax has been an aspect that has given rise to successive interpretative discrepancies in recent times.
Currently, the criterion adopted by the Tax Administration, carrying out a literal interpretation of the Tax regulations referring to deductible expenses for determining the net return on real estate capital, (articles 23.1.b of Law 35/2006 on Property Tax Income of Natural Persons and 14 of Royal Decree 439/2007 approving the Personal Income Tax Regulations), consists of determining as the acquisition cost of goods acquired for profit exclusively “the expenses and taxes inherent to acquisition”.
That is, in application of said criterion, for the determination of the net returns on real estate capital, the amortizable base of the properties acquired free of charge would be limited to the expenses associated with their acquisition, without taking into account the real value given to the property. in the acquisition free of charge.
However, although in isolation, a resolution to the contrary issued by the Regional Economic-Administrative Court of Valencia has been made public.
Specifically, the TEAR, in its administrative economic resolution No. 46-04964-2017 of June 30, 2020, has come to the fore of the administrative criterion considering that, to determine the acquisition cost of properties acquired by inheritance for the purposes of their subsequent amortization, the rules that regulate personal income tax gains (art. 35 LIRPF) must be applied, that is, the acquisition value must be calculated on the real value given to the property at the time of acquisition, added to the cost of the investments and improvements made, as well as the expenses and taxes associated with the acquisition.
In this sense, the amortization base of properties acquired for profit would not be limited to the expenses associated with the acquisition, but rather the real value given to the property at the time of its acquisition would have to be taken into account. This is a more favorable criterion for the taxpayer.
Without prejudice to this, in any case it is worth noting that this is an isolated resolution, so we will have to wait for new pronouncements in this same sense.
Tax Department.
Pablo Arias Medina