TAXES IN THE TRANSFER OF REAL ESTATE
The transfer of real estate can be taxed by different taxes (the Tax on Property Transfers or ITP in the case of sales, the Tax on Inheritances and Donations or by the Tax on Documented Legal Acts or AJD in those cases in what the transmission is taxed by VAT).
Until now, the competent tax administration (whether regional or central) regularized the price established not by the value declared by the taxpayer in the public deed, but by the value estimated by the technicians of the corresponding administration through the procedure of verification of values.
This administrative action was often based on a pre-established index or tables as well as data extracted from the internet (including photos obtained from Google Maps) but without carrying out a physical inspection of the specific property that would allow, among other things, check their condition, age, possible conditions, etc.
Well, from an important Supreme Court Judgment dated January 21, 2021, this practice will no longer be possible (except for strictly justified exceptions). As established by the High Court, the face-to-face visit and the corresponding physical inspection of the property will be an inexcusable requirement.
It will therefore be necessary to pay attention to future administrative settlements that are carried out in case it is appropriate to use the valuation method used as a basis for calculating the corresponding tax. And, on the other hand, for all the procedures that are in the appeal phase and that were settled following the practice declared erroneous, it will be essential to allege the aforementioned Judgment in order for the settlement to be declared null and void.
Ignacio Díaz / Gorka Alonso-Cuevillas
Lawyers
Heads of the Real Estate Law and Tax Law DepartmentsAlonso-Cuevillas Lawyers and Economists