CGT valuation on property in Spain


This topic contains 3 replies, has 3 voices, and was last updated by Profile photo of jean jean 1 year, 11 months ago.

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  • #183946
    Profile photo of jean


    I am new to this forum and have a question; one to which I cannot seem to find a definite answer:

    In the light of the massive decrease in Spanish property prices, selling at a loss seems almost inevitable.  When doing so, what extra costs does the SELLER incur?  I have read lots of posts regarding the revaluation of properties and extra Transfer Tax bills being sent, sometimes years later to buyers, but what about the seller?

    It seems that Hacienda have their own valuation for properties, (as they do for vehicles) some kind of “book value” or market value.  This is not the Catastral value, although I have heard that the minimum taxable value can be calculated by applying a co-efficient percentage to the VC.

    So, as a hypothesis, suppose a property is sold for 100,000 euros.  The value on the Escritura is 110,000 euros, but in today’s market, this price cannot be achieved.  Does Hacienda then accept that there has been a capital loss, or do they apply their own valuation, which could be more than 110,000 euros and subsequently charge CGT on what they perceive to be difference between their own valuation and the sale price of the property?

    I realise that the seller is liable the Plus Valía, which is a local land tax.  I ask this question from a non-resident perspective and know that there is a 3% tax retention on the total sale.

    I would be grateful to hear from anyone who knows the answer to this, or maybe has experienced such a situation.

    Thank you!  😕





  • #183960
    Profile photo of Aunty Val
    Aunty Val

    As a non-resident seller your buyer’s lawyer will retain 3% of the agreed sale price and send this off to the Hacienda.

    If you owe more tax than has been paid via the 3%, then there is a chance that the Hacienda will show this as a debt against you unless it is paid.  If you don’t have any CGT to pay, you can claim the 3% back from the Hacienda but I would assume this takes forever.  Most sellers tend to return to the UK or wherever they are off to and forget about it.

    To a degree, the agreed sale price is irrelevant as you say – the Hacienda will have a “perceived” value for your property and this will dictate whether the buyer gets a pleasant surprise in a few months.  Most buyer’s lawyers are well aware of this and will advise their clients accordingly – once you have an agreed price, don’t be too surprised if the buyer comes back to negotiate when they are informed of the “perceived” value.

    In your example, if the property is sold for €100k don’t be surprised if the perceived value is much higher – I’ve seen examples where it can be 50% higher.  Ask your lawyer to find out for you as it will give you an idea of how best to play the negotiation with your buyer and frankly, unless the buyer’s lawyer is a complete numpty, you will need to deal with this at some stage.

    Good luck!

    • #183976
      Profile photo of jean

      Thank you for your prompt and very informative replies!

      Is it also true that sometimes AEAT take up to four years to issue the complementarias, byte which time they have added interest?



  • #183975
    Profile photo of Mark Stücklin
    Mark Stücklin

    Aunty Val is right as always.

    This is what our regular legal contributor Raymundo had to say:

    The AEAT is unconcerned on whether there has been a loss or not. It works following its own rateable values for properties which, only in my opinion, may in some cases be detached from the market’s reality.

    By the same token they charge a buyer a ‘complementaria’ when they deem the buying price is too low (explained in detail in my article on buying property in Spain) likewise they will also charge a seller what they think he should be paying according to their own values; regardless whether this is true or not.

    Which is why in many cases Hacienda withholds in full the 3% practiced as a retention (and will not refund it) to a buyer on account of the seller’s CGT liability. This helps to offset any potential ‘shortfall’ on the seller’s CGT as non-residents are prone to leave the country shortly after a sale is concluded.

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