Acquisition value of a property in case of divorce or inheritance

When selling a property, whether it’s the result of an inheritance or a divorce decree, it’s common to wonder about its value and the date of acquisition. This is an important aspect because it directly impacts the calculation of the capital gain upon sale.

WHAT IS MEANT BY CAPITAL GAIN?

Article 33 of Law 35/2006, of November 28, on Personal Income Tax (hereinafter LIRPF) defines it as:

Capital gains and losses are changes in the value of the taxpayer’s assets that become apparent due to any alteration in their composition, unless they are classified as income under this Law.

Its calculation is simple as it results from the difference between the transfer value and the acquisition value of the property, with the following nuances:

• Transmission value: actual amount of the sale according to the deed (provided that it is not less than the normal market value), less those expenses and taxes inherent to the sale, such as the municipal capital gains tax.
• Acquisition value: purchase price according to the deed, plus expenses, taxes and investments made in the property.

The calculation is pretty clear, but what happens in the case of inheritance or divorce?

INHERITANCE

When acquired for profit, the acquisition value of the property received by inheritance will be constituted by the sum of the following:

• The value that, by application of the rules of the Inheritance and Gift Tax, corresponds to said property according to the inherited percentage, without this value being able to exceed the reference value.
• The part of the tax paid for the Inheritance and Gift Tax that proportionally corresponds to said asset, and in accordance with the percentage inherited, plus the expenses and other taxes inherent to its acquisition, excluding interest, that would have been paid by the heir.

Regarding the date of acquisition, once the inheritance is accepted, it is retroactive to the date of the deceased’s death, in accordance with Article 989 of the Civil Code. The General Directorate of Taxes issued the same statement in response to Consultation V0741-21, dated March 29. This point is important, as it is quite common to think that the date of acquisition is the date on which the heir accepts and is awarded the inheritance.

Therefore, it may be the case that you inherit full ownership of a property in two different moments, resulting in two different acquisition dates and even two different acquisition values.

An example would be when one parent dies and 50% of the property is acquired, and the remaining 50% is acquired when the second parent dies.

DIVORCE

In this case, the value and date of acquisition are the original purchase price paid when the purchase was formalized by deed, regardless of what was stated in the divorce decree.

This is because, as established in Article 33 of the Personal Income Tax Law (LIRPF), it is considered that “there is no change in assets in the event of the dissolution of the community property regime or the termination of the marital property regime,” thus maintaining both the initial acquisition date and its acquisition value. The change in assets will occur when the property is sold.

TAXATION OF CAPITAL GAINS

The capital gain obtained is included in the Savings Tax Base for Personal Income Tax and is taxed, for example, in the case of Andalusia according to the following scale: