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Practical Income Manual 2021.

Example: Real estate income allocation

Don JVC, during the year 2021, has been the owner of the following real estate:

  • Primary residence, whose unrevised cadastral value amounts to 34,800 euros.
  • Garage space acquired jointly with the property and whose unrevised cadastral value amounts to 3,900 euros.
  • Apartment on the beach that you only use during the vacation month. Its cadastral value, which was reviewed with effect from 2013, amounts to 40,800 euros.
  • Apartment acquired for 105,000 euros on July 1, 2021 and which, on September 1 of that year, has been rented for a monthly rent of 600 euros. As of December 31, 2021, the cadastral value of the property has not been notified. The value declared by the taxpayer for the purposes of the Tax on Property Transfers and Documented Legal Acts is the acquisition value, without the Tax Administration having proceeded to modify it.

Determine the imputation of real estate income corresponding to said properties:

Solution

  • Main residence and garage space: no imputation of real estate income is appropriate.

  • Apartment at the beach. Imputed real estate income:

    1.1 times 100 s/40,800 = 448.80 (1)

  • Apartment acquired in 2021. Imputed real estate income:

    1.1 per 100 s/ (50% x 105,000) x 62 ÷ 366 = 97.83 (2)

Total imputed real estate income (448.80 + 97.82) = 546.63

Notes to the example:

(1) Since the cadastral value was reviewed in 2013, that is, within the ten years prior to 2021, the percentage to apply is 1.1 percent. (Back)

(2) Since the owner has not been notified of the cadastral value of the property as of December 31, 2021, the percentage of 1.1 percent is applied to 50 percent of the acquisition value of the property, a value that has not been modified by the Administration for the purposes of the Tax on Property Transfers and Documented Legal Acts. Furthermore, the imputed income must be determined in proportion to the number of days in which the property has been at the disposal of its owner (from July 1 to August 31). Finally, the income derived from the leasing of the property is considered income from real estate capital in which section they must be declared. (Back)