The habitual residence maintains the consideration of habitual in the cases in which the owner of the same suffers from an accredited illness that forces him to change his residence, especially if the death occurs during and as a consequence of said illness.
The Supreme Court, in a judgment of May 12, 2017, which unifies doctrine, determines that the appellant is entitled to a 95% reduction in Inheritance and Gift Tax for the acquisition of his deceased brother’s habitual residence, although during the three The latter lived until his death in his own home.
The ruling of the Regional Economic Administrative Court (TEAR) rejected the right because the deceased and her brother resided at his home and not at the sister’s home.
Regulation change
The concept of habitual residence does not appear in the Inheritance and Donation Tax Law (ISD), so it is necessary to attend to the Personal Income Tax Law (IRPF), which expressly refers to it.
Article 41 bis of the Personal Income Tax Regulation defines the habitual residence for the purposes of certain exemptions in the following terms: “the habitual residence of the taxpayer is considered to be the building that constitutes his residence for a continuous period of at least three years. However, it will be understood that the dwelling had the habitual character when, despite the expiration of said period, the death of the taxpayer occurs or other circumstances that necessarily require a change of address occur, such as marriage celebration, marital separation, job transfer , obtaining the first job, or changing jobs, or other justified analogues”.
The rapporteur, Judge Fernández Montalvo, explains that in the field of “other justified analogous causes” of the transfer that do not make the property lose the consideration of habitual residence, the accredited illness that forces the change of residence must be included.
The application of this doctrine entails the estimation of the appeal for the unification of the doctrine because the judgment of instance declares and recognizes that the transfer from the habitual residence to that of his brother, was due to the state of health.
As a general rule, the cohabitation between the deceased and the successor in title, required by article 20.2.c).3 of the LISD, must take place in the deceased’s home, because, otherwise, it is no longer habitual.
“Now, in the cases in which there is one of the justified causes that attributes the condition of habitual residence to the new address, after the transfer, it will be in this one where the required coexistence must take place”, explains the sentence.
The reasoning set forth justifies the rejection of the alleged inadmissibility opposed by the appealed Administration due to the absence of the necessary identities between the contested and contrasting judgment.
The text of article 20.2.c).3 combines the concepts habitual residence, which implies the effective occupation of the dwelling for at least three years, admitting a shorter term due to exceptional circumstances that require a change of address. With that of cohabitation, which must take place in the habitual residence -common of the deceased and the heir- object of acquisition mortis causa.
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