Tax changes in the valuation of real estate sales

Tax changes in the valuation of real estate sales

Whoever buys second-hand housing during this year is in luck, will be spared from paying the Property Transfer Tax as announced by Congress that has given the green light to the new bill on measures to prevent and fight against tax fraud.

The buyer will not pay taxes for the house but for its value in the market,said Law will be approved by the General Directorate of the Cadastre and will enter into force next January 2022 so it will affect all sales from that date and without retroactive character.

This market value will be calculated from the price of the transactions of the properties, without the need to know the state of the property and without the need to visit it. This new value will affect the ITP and the Inheritance and Gift Tax. That is, the taxable amount will be that reference value.

In case of not agreeing with that value, the taxpayer must demonstrate his mistake and therefore the burden of proof will fall on the taxpayer who must demonstrate that the reference value of the cadastre does not correspond to the market value. The new Law estimates that the market value will be the reference value in the Cadastre from January 2022.

One of the main questions is how will they determine the value of the home?

From January 2022 it will be through the new reference value, so the administration will not be obliged to send an expert to the house, the taxpayer who makes reforms to revalue it before selling it will be punished since it will be worth the same as an unreformed one.

Currently the Law is in the process of approval and “When there is no reference value or this cannot be certified by the General Directorate of the Cadastre, the taxable base, without prejudice to administrative verification, will be the largest of the following magnitudes: the value declared by the interested parties or the market value”.

Therefore, when the Reference Value of the Cadastre enters into force, taxpayers must declare in accordance with that value, because this is required by Law.

Below we show the sales taxes according to the different autonomous communities:

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