In this paper we discuss how the time domain subspace based identification algorithms can be modified in order to be applicable when the primary measurements are given as samples of the Fourier transform of the input and output signals or alternatively samples of the transfer function. An instrumental variable (IV) based subspace algorithm is presented. We show that this method is consistent if acertain rank constraint is satisfied and the frequency domain noise is zero mean with bounded covariances. An example is presented which illuminates the theoretical discussion.