selling below Catastral Value

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This topic contains 8 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 6 years, 10 months ago.

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  • #55368
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi all,

    Just wanted to double check. If you sell a property below the catastral value – is it true that the purchaser has to pay tax on the difference between the price which he/she purchases the property at and the catastral value? I thought I read this somewhere here before and I wanted to check?

    Thanks.

  • #95878
    Profile photo of Anonymous
    Anonymous
    Participant

    Not sure on this, but for my property (6 years old now) the catastral value is around a third of its market value. And at the peak probably a fifth of it’s market value.

    So you would be hard pressed to sell it below the catastral value, unless you were literally giving it away.

  • #95879
    Profile photo of Anonymous
    Anonymous
    Participant

    @jp1 wrote:

    Not sure on this, but for my property (6 years old now) the catastral value is around a third of its market value. And at the peak probably a fifth of it’s market value.

    So you would be hard pressed to sell it below the catastral value, unless you were literally giving it away.

    Hi jp1,

    I purchased my apartment in 2005 – so 5 years old. I’m going on that catastral value according to my suma bill going back to 2006 – I didn’t realise that the catastral value change. I wanted to check about the implications before agreeing.

    Many thanks

  • #95880
    Profile photo of Inez
    Inez
    Participant

    Hi Angela, this is becoming an issue in places such as Estepona which has a high catastral value – they hiked them up to refelce prise rises (all income for the toen hall) but now people are selling under that, the town halls are coming to buyers asking for the tax difference.

    They take the assumption that you bought under therefore it must have been a cash deal!

    Get your lawyer to register before notary date, in Hacienda, the actual purchase price and this should help! They wont come after you as you are out of the picture – the Spanish are aware of it and just fight it or see thay had a good deal and pay it!!

    If they try to pursue is they will ask for a valuation in order to prove their case! (got one happing at the moment!!)

  • #95882
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi inez,

    Thanks for that – yes the original contract should prove that we paid x amount and I will make this quite clear! I was offered the option of black money but declined to take it as I worked in as a law clerk and understood the consequences of that. I also wanted to check before I agree any price with the purchaser about the implications of that and wanted to inform him.

    Many thanks

  • #96025
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi – we bought below Catastral value in Menorca in March 2009, but had instructed local solicitor to ensure that local Hacienda were notified and aware of this beforehand – and if there was an attempt to claim extra tax afterwards, he would defend us at no charge. So far there has been no problem, although our defensive action was taken because of tax claims in similar situations some months earlier with local property. Local Hacienda found this proactive approach difficult but it appears to have paid off.

  • #96029
    Profile photo of Anonymous
    Anonymous
    Participant

    Don’t speak too soon!

    10 months is a very short time indeed. The Spanish wheels of bureaucracy turn very slowly. And in fact they could clobber you on the day you sell, demanding payment of tax for buying an under-declared property (in their eyes).

    Personally I believe the fact that you warned them about a low price will make no difference at all. They will have their formula for tax calculation (with all multipliers increased in this tax devoid environment of a recession) and they will demand their piece of the pie.

  • #96155
    Profile photo of Anonymous
    Anonymous
    Participant

    Angela,

    The value the Tax Department take to check if the purchase price it is below their estimation or not it depend of the location of the property, as there are Regions that take a percent on the catastral value and others have a specific value being fixed in a list, for example in Murcia Region you have the Orden de 19 de diciembre de 2006 de la Consejería de
    Economía y Hacienda, por la que se aprueban los precios
    medios en el mercado de determinados inmuebles urbanos
    y rústicos radicados en la Región de Murcia para 2007 that has been renovated for january 2009, where there is a specific price per m2 depending where the property it is based.

    As well in most of the Regions, the Tax Office Bureau will suply you with their price reference, it is called “average price”

    The consecuences of estating in the deeds a lower price than their average price is that the buyer will have to pay the taxes of the diference among that estimation minus the purchase value, samething will happen to the seller in order to calculate the profit tax on the sale.

    Apart of that, the Tax Agency “average price” could be contest with the proper appeal and in case there is no agreement a process called TASACION PERICIAL CONTRADICTORIA could be aplied where after a complex process there will be an independent surveyor appointed in order to make a valuation.

    Hope this makes things a little bit more clear

    regards

    Gonzalo Ross

  • #96156
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi gonzalarous,

    Thanks for your reply. I didn’t accept the offer in the end – alot of people on the forum might same I’m mad not to accept but he was first to look at apartment and I’m not desparate to sell (just yet! 😕 )

    Appreciate the advice.

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