One of the issues that arise when selling a property is determining its tax effects. To do this, it is necessary, among other aspects, to know when said transfer acquires legal effectiveness. In this sense, Spanish Law includes the theory of title and manner, based on the general principle that “the proof of a sales contract in a private document does not transfer ownership by itself if the tradition of the thing is not accredited.” sold” (Judgment of April 27, 1983).
In fact, the tradition can be carried out in multiple ways, among which, for real estate, we can mention the placing in power and possession of the thing, the delivery of the keys or titles of ownership or the granting of a public deed.
Having stated the above, if the elements of title and manner are present at the time of signing a private purchase and sale contract, the capital alteration will be deemed to have materialized in the tax period of its signature and consequently the capital gain or loss obtained must be attributed to that tax period. This tax effect will also be extended to the indirect taxation accrued on the occasion of the transfer (VAT/onerous property transfers) and to the tax on the increase in the value of urban land.
Without prejudice to the foregoing, in the case of installment operations or with a deferred price, the transferor may choose to proportionally allocate the asset alteration in various tax periods, applying the criterion of proportional imputation as the corresponding charges become payable. In this sense, operations in installments or with a deferred price are considered those whose price is received, in whole or in part, through successive payments, provided that the period elapsed between delivery or making available and the expiration of the last installment is greater than one year. .
A special case occurs when, once the private purchase and sale contract with deferred payments has been signed, and before receiving the full price, the death of the seller occurs, since in such case the capital gain pending imputation must be integrated into the entire property. patrimonial alteration in the last tax period of the deceased (that is, in the period of death), without prejudice to the fact that, where appropriate, the surviving co-owner spouse may continue to apply the rules of temporary imputation of the patrimonial alteration in accordance with the special rule of forward or deferred price operations.
Tax Department.
Laura Canada Camera