Tax hike slipped in on property sales

Selling a house is about to become more expensive after the government slipped in a codicile to the new antifraud law. (The law hasn’t yet been passed but is likely to pass).

The regional governments have for the last few years been trying to tax house sales on the greatest of three: declared house sale price, cadastral or other taxation value OR assumed market value (VRM).

The Courts have constantly rejected this assumed cadastral valuation – the government has been consistently defeated time after time, all the way up to the Supreme Court of Spain. Judges are unanimous that the tax people can’t just pull a figure our of their hat to tax you on without inspecting the property and taking into account the sale price.

Despite this, the new antifraud law has an article enshrining in law that the regional tax authorities can take the assumed market value as the taxable base. Meaning the tax liability of selling a property could be many thousands of euros higher than the reality…
The Supreme Court said of it in 2018: “It might be legal but it is not the correct way to determine the true market value of a property” and demanded changes.

The tax people say that it is a transparent and fair way of taxing properties that is based on average market movements, as catastral values are often years out of date. (The unsaid addition is that they don’t trust the declared sale price – for obvious reasons 😂 )

The first of many, many hidden tax hikes we can expect over the next year I’m afraid.

Leave a Reply

Your email address will not be published. Required fields are marked *


This site uses Akismet to reduce spam. Learn how your comment data is processed.