This 2022 comes with fiscal changes in the purchase of real estate. From January, the land registry will set a reference value that will establish what we should pay tax on. This has been determined by the Ministry of Finance. If until now we paid taxes according to the market price, now it may cost us a little more. We give you the keys to all of this.

Until now, if you bought a second-hand flat, you had to pay 10% transfer tax (ITP); and when you inherited a property or received a donation, the corresponding inheritance and donation tax. Even so, if the tax office proved that the property had been sold below market value, it could then force the property to pay more.

To avoid the litigation that this entailed, the cadastre has created this new reference value, without retroactive effects. These changes come hand in hand with the reform of the Law against tax fraud, which affects ITP, stamp duty and inheritance and gift tax.

Thus, from now on, the cadastre will take into account the deeds of sale of the year prior to each area. To find out what the value of our property is, therefore, we will have to consult this index, which is already published on the cadastre’s website. It is on this amount that we will have to pay the transfer and transfer taxes. In this way, the tax will no longer depend on the market value, and some consider that, as a result, the exact condition of the property at the time of purchase will not be taken into account.

Requesting a rectification

In fact, if the buyer believes that the price assigned to his property is higher than it is worth, and he is paying more than he considers fair, then he can rectify his self-assessment and ask for a refund for undue income. Let’s say for example that the land registry has valued our property at 280,000 euros, but we think it is worth 180,000 euros.

Then, we will have to provide the necessary evidence to prove that the conditions of the property are not adequate and that the price should be lower. From this point on, the cadastre will analyse the case and determine whether we are right and deserve a refund. However, the tax office warns that the reference value is already slightly below the market value. 

The seller, in the tax return

In the case of the seller, he/she has to include the sale and purchase in the tax return and will have to pay the corresponding taxes for the difference between the sale and purchase price; or the acquisition price, in the case of inheritance or donation, if it is positive. In fact, article 14 of the General Tax Law makes it explicit that the transfer tax does not affect the income tax and, therefore, if the property has been sold below its reference value, it is taxed at the price of the sale. 

The property tax, known as IBI, which is paid every year in our municipality, depends on the cadastral value, and not on the reference value and, consequently, will not be affected by this new reference value.

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