The mere ownership of a property generates income that will be taxed under the Personal Income Tax (IRPF)
The Personal Income Tax (IRPF) regulations consider imputed real estate income to be that income which the taxpayer must include in his taxable base for being the owner or holder of a real right of enjoyment over real estate that meets certain requirements.
The ownership of a timeshare right on urban real estate (timeshare) also generates imputed real estate income.
The requirements established are as follows:
1.- That they are urban properties not used for economic activities
2.-That they are rural properties with buildings that are not essential for the development of agricultural, livestock or forestry operations, not related to economic activities.
3. That they do not generate returns on capital (that they are not rented out)
4.- That they do not constitute the taxpayer's habitual residence.
5.- That it is not undeveloped land, buildings under construction or buildings that, for urban planning reasons, are not suitable for use.
The amount of imputable income will be calculated as follows:
- 2% of the cadastral value of the property, in general
- 1.1% of the cadastral value if it has been revised from 1 January 2014 onwards
- If the property lacks an assigned cadastral value, 1.1% of 50% of the higher of the acquisition values or the value verified by the Administration in the management of other taxes will be imputed
For a correct interpretation of the regulations, it is worth mentioning some conceptual issues that are sometimes beyond our knowledge:
A) The rule specifies that income will be generated by the property of which one has ownership or title to a real right of enjoyment, that is, of which one has the usufruct.
It is common to separate the bare ownership and the usufruct of real estate in the case of inheritances where, although the deceased was the full owner, it was their wish that the person with whom they lived continue to enjoy the home despite naming different people (usually descendants) as heirs to the property
Another fairly common case is the use of the home by the ex-spouse and children in compliance with a divorce decree, even though the property remains with the spouse who must leave the marital home. (See also “La separació de la parella a l'impost de la renda”)
B) Parking spaces acquired together with the property may be considered as part of the main residence, up to a maximum of two. In this respect, spaces acquired after the purchase of the property will generate imputed income even if they are located in the same property.
This imputed income calculation system will be the one we use to calculate the minimum amount of real estate income when the property is rented to a relative up to the third degree of consanguinity or affinity, even though the actual amount of rent received is lower.
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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