General calculation rules

Regulations: Articles 34 to 36 Law IRPF and 40 Regulation

Note: Please note the summary tables of the general rules at the end of this section.

The determination of the amount of capital gains or losses arising from the transfer, whether onerous or lucrative, of non-affected assets is determined by the difference between the transfer and acquisition values of the assets.

Precision: To determine the amount of the capital gain or loss arising from the see the section on specific valuation rules in this Chapter.

A. Acquisition value

The acquisition value will be formed by the sum of:

1. In the case of transfers for valuable consideration: for the actual amount for which said acquisition would have been made.

   However, for the purposes of determining the acquisition value in the event of a subsequent verification of values in the Tax on Property Transfers and Documented Legal Acts by the respective Autonomous Communities, this verified value must be taken into account as the actual amount referred to in article 35 of the Tax Law. Supreme Court judgment of 21 December 2015, issued in appeal for unification of doctrine No.  2068/2014. (RED: STS 5470/2015)

   In the case of transfers for profit or free of charge (inheritance, legacy or donation): for the declared or the administratively verified for the purposes of the Inheritance and Gift Tax, without this being able to exceed the market value. 

   However, as of July 11, 2021, in the case of lucrative acquisitions due to death arising from contracts or succession agreements with effect from the present , the beneficiary thereof who transfers the acquired assets before the expiration of five years from the conclusion of the succession agreement or the death of the deceased, if earlier, will be subrogated in the position of the latter, with respect to the value and date of acquisition of those, when this value is lower than that provided for in the previous paragraph.

   Law 11/2021, of July 9, on measures to prevent and combat tax fraud, transposing Council Directive ( EU ) 2016/1164, of 12 July 2016, which establishes rules against tax avoidance practices that directly affect the functioning of the internal market, modifying various tax rules and the regulation of gambling, has added a new paragraph to article 36 of the Personal Income Tax Law to subject to taxation those cases in which, in the five years following the conclusion of the succession agreement or the death of the deceased (if earlier), the assets are transferred by the beneficiary of the succession agreement. In this case, the successor loses the value update carried out through the ISD and is subrogated on the date and value of acquisition of the original owner.

   It should be noted that the institution of "succession agreements" (contractual succession) is prohibited in the area of common law (articles 1,271, 658.1 and 816 of the state Civil Code), but is maintained in the civil, regional or special laws of certain Autonomous Communities where the validity of the Civil Code is not complete (Aragon, Balearic Islands, Catalonia, Galicia, Navarre and the Basque Country).

   Important: The provisions for succession agreements will only apply to transfers of assets made after July 11, 2021, which were acquired for profit due to death by virtue of contracts or succession agreements with present effects.

   See in this regard the first transitional provision.4 of Law 11/2021, of July 9, on measures to prevent and combat tax fraud, transposition of Council Directive ( EU ) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market , modifying various tax rules and regulations on gambling ( BOE of 10)

   In the lucrative transfers of companies or shares referred to in article 20.6 of Law 29/1987, of December 18, on the Tax on Inheritances and Donations ( BOE of the 19th), the acquisition value will coincide with the original value of the donor since the donee is subrogated in the position of the former with respect to the values and dates of acquisition of said assets.

2. The cost of investments and improvements made to the acquired assets, without taking into account, for these purposes, the costs of maintenance and repair.

   For these purposes, an improvement is considered to be the compensation paid by the owner to his tenant so that the latter vacates the property.

3. The expenses (commissions, notary public, Registry, etc.) and taxes inherent to the acquisition (Property Transfers and Documented Legal Acts, VAT or Inheritance or Donation Tax if the acquisition was made free of charge), excluding interest that would have been paid by the acquirer.

4. From the sum corresponding to the previous amounts , the amount of the tax-deductible amortizations will be subtracted, computing in all cases the minimum amortization , regardless of its effective consideration as an expense.

   The minimum amortization is the result of the maximum amortization period or the corresponding fixed percentage, depending on each case.

   For leased properties, the minimum depreciation amount is determined by applying 1.5 percent until December 31, 1998; 2% until December 31, 2002, and 3% from January 1, 2003.

   In relation to the calculation of depreciation, it should be noted that:

   • Amortization is not applicable for assets that are not susceptible to depreciation, such as land, securities, etc.

   • "Tax-deductible" depreciation corresponds to real estate or personal property used for economic activities, to real estate or personal property leased or subleased, to real rights of use and enjoyment of real estate, to cases of provision of technical assistance that does not constitute an economic activity and to the leasing of businesses or mines or subleases. In these cases, the minimum amortization will be computed, regardless of its actual consideration as an expense.

   • In the case of the transfer of assets related to economic activities, the book value is considered as the acquisition value, taking into account any depreciation that would have been tax deductible, without prejudice to the minimum depreciation to which we referred above .

   • In the case of real estate that has been leased, depreciation will be considered to meet the effectiveness requirement when, in each year, it does not exceed the result of applying the percentage of 3% to the highest of the following values: acquisition cost paid or the cadastral value, excluding the value of the land. When the value of the land is not known, it will be calculated by prorating the acquisition cost paid between the cadastral values of the land and the construction for each year.

     In the case of real estate acquired for profit, it must be taken into account that the acquisition cost paid includes the value of the property acquired in application of the rules on Inheritance or Gift Tax or its value verified in these taxes (not including the value of the land). Interpretive criteria established by the Supreme Court (Administrative Litigation Chamber) in its Judgment No. 1130/2021, of September 15, in the appeal for cassation number 5664/2019 (ROJ: STS 3483/2021).

     The acquisition cost also includes the amount of taxes and expenses inherent to the acquisition and, where applicable, all investments and improvements made.

B. Transmission value

The transmission value will consist of:

1. The actual amount for which the transfer was made or the declared value or, where applicable, the value administratively verified for the purposes of the Inheritance and Gift Tax when the transfer was made for profit or free of charge, without this being able to exceed the market value.

   The actual amount of the sale value will be taken as the amount actually paid, provided that it is not less than the normal market value, in which case the latter will prevail.

2. From the above amount, expenses and taxes inherent to the transfer, excluding interest, may be deducted to the extent that they have been paid by the transferor.

C. Special assumption: Transfer of assets to which improvements have been made in a year other than that of acquisition

In the case of assets on which improvements have been made in a year other than that of acquisition, it will be necessary to distinguish the part of the transfer value that corresponds to the asset and to the improvement or improvements made, in order to determine, separately and independently, both the capital gains or losses derived from each, as well as the reduction that, where applicable, is applicable. For these purposes, the values and dates of acquisition will be taken as those that correspond, respectively, to the asset and to each of the improvements made.

Consequently, the capital gains or losses thus determined may have different periods of generation, and the reduction percentages that may be applied to the capital gains will also be different depending on the seniority of the assets themselves and each of the improvements made as of December 31, 1996, taking into account that if improvements have been made to the transferred assets, the period of time that these improvements remain in the taxpayer's assets will be taken as the number of years between the date on which they were made and December 31, 1996, rounded up.

Summary diagrams

The components of the respective acquisition and transfer values of the different assets not affected by economic activities, depending on whether the transfer is onerous or lucrative, are those indicated in the following tables:

a) Outline - summary: onerous transmission

Regulations: Article 35 of the Income Tax Law

b) Outline - summary: lucrative streaming

Regulations: Article 36 of the Income Tax Law