WHAT IS THE FISCAL VALUE. SPANISH TAXES
The Fiscal Value is the Value calculated by the Spanish tax administration to be used in tax valuations on transactions affecting to properties like purchase, sale, inheritances, donations, etc.
Sometimes buyers of Spanish properties receive letters from the regional tax office were they’d been asked for additional tax due on the purchase of their properties.
The concept is easy to explain: under Spanish law, the Spanish tax office has got the capacity to override the declared values of transactions in order to ask for additional tax on the basis that the declared price was “under the market value”.
These letters are currently called “complementarias”.
We will explain this concept using and example:
Imaging that you buy a RESALE property in Catalonia, Spain for a price of 300.000 EUR. Purchase tax in Catalonia is the 10 % on the purchase price.
This price of acquisition (300.000 EUR) is called COMMERCIAL VALUE and is the value used to calculate the taxes derived from the purchase and the ones for the sale.
Following this example, on the date of completion of the purchase process, the buyer will pay the 10 % tax over the price of acqusition:
3000.000 * 10 % = 30.000 EUR
However, although the value of the purchase is 300.000 EUR (COMMERCIAL VALUE), the Spanish administration has up to 4-5 years to inspect and to reconsider the price used as base of the tax and being paid to this property. So, during this period the administration may inspect the transaction and may consider in their criteria that the value to be used to calculate the tax on this sale, instead of the price paid (COMMERCIAL VALUE), being 300.000 EUR must be higher, for example, 400.000 EUR (FISCAL VALUE).
If this will be the case, the Spanish administration might require you to pay the difference in both values, the COMMERCIAL VALUE and the FISCAL VALUE (the one calculated by the administration: 400.000 EUR). So, then, the administration may require you to pay taxes with respect to 300.000 EUR, rather than 400.000 EUR usign this formula:
400.000 * 10 % = 40.000 EUR. To this amount, it is deducted the amount of tax already paid at the time of the acquisition. So: 40.000 – 30.000 EUR = 10.000 EUR. This amount will be the one that the Spanish administration will require from you to pay extra in taxes for the acquisition act.
As you may see, it is always recommendable to obtain the Fiscal Value of your property BEFORE completing the purchase process of a property in Spain.
How to know about the fiscal value of your property?
The way is very easy. There is a public official site where this value can be obtained
For this, you need just:
– The cadastral reference of your property
– Your Spanish digital certificate (in case you do not have one, your lawyer will use heirs)
– To visit the official site of the administration CLICKING HERE
You will get then the FISCAL VALUE of your property.
In case the result of the FISCAL VALUE is LOWER than the COMMERCIAL VALUE, this is perfect, as you will have low risk to be demanded in the future to pay extra taxes for the acqusition.
But, in case the FISCAL VALUE is HIGHER than the COMMERCIAL VALUE, there will be HIGH possibilities to be requested in the future to pay the difference on both values in taxes.
However, independently of the result of the valuation obtained as above, nobody (including your lawyer) is in the position to guarantee you any future value inspections from the Spanish Tax Office.
As you may see, the way in which the Spanish tax office valuates the property is attending to “theorical” criteria, and not considering the “real” construction status of the building. So, it may happen that the value of the property can be higher for the administration when, in real, the construction status of the building is very poor.
So, in case you or your lawyer have doubts on this valuation, we it is highly recommendable to make a property VALUATION made by a specialist –ARCHITECT – on the date of purchase. This VALUATION will help to demonstrate to the Spanish administration that, independently on the result of their calculations about the FISCAL VALUE, the REAL VALUE of the property, and you would have more arguments to make opposition to future eventual inspections of these values in the future.