This is how you must declare real estate that is owned and not rented

One aspect to consider when preparing an income statement is that related to housing. Obviously, the rent for the house must be declared because it involves capital gains. But what about Real estate owned by the taxpayer is vacant or not rented? Do they also have to pay personal income tax?

In this case the answer is yes. This assumption is known as the real estate income imputation. This is defined in Article 85 of Law 35/2006 on personal income tax It must be declared because the Treasury is aware that this property is capable of generating income.

How are these types of properties for rent advertised?

They explain from the ING blog that “just to have the potential to earn that money, you have to pay a minimum on your income statement.” In the declaration, the taxpayer must go to Section C is real estate that is not affected by economic activities.

On the other hand, from the real estate company Banker & House, they confirmed in their blog that it is a measure from the treasury to deal with the problem of transferring real estate to family or friends No cost.

  • Urban real estate that is not affected by economic activities.

  • Rural property with buildings that are not necessary for the development of agricultural, forestry or livestock activities, and are not affected by economic activities.

  • It does not generate capital income as a result of leasing real estate, businesses, mines, the constitution, or the assignment of rights or powers of use or enjoyment over real estate.

  • It does not constitute the usual place of residence of the taxpayer. For these purposes, it is understood that the garage spaces acquired with the property of a maximum of two are part of the usual residence of the taxpayer.

  • It is not undeveloped land, buildings under construction, or buildings unaffected by urban reasons.

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Who should declare these entries and how they are calculated

The people who should include these incomes in advertising are Realtors who are at their disposal all or part of the year. The beneficiaries or persons who have a real right to use or enjoy the property must include the corresponding income in their return in the same amount that corresponds to the owner. In addition, timeshare residence right holders are required to include it depending on the length of the usage period.

The IRS determines, in general, 2% will be applied to the cadastral value of the property which appears on the IBI receipt. However, the 1.1% To properties whose cadastral values ​​have been revised, adjusted, or determined by a public collective assessment procedure or property that, on the tax due date (usually, December 31) lacked cadastral value or was not notified.

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