EDITING |
What taxes must be paid when buying a second-hand home?
When buying a home, what needs to be paid varies if the property is new or not. If the home is second-hand, the tax to be paid is the ITP, Property Transfer Tax.
The taxable base (amount on which the tax is calculated) since January 2022 is constituted by the cadastral reference value, which is published on the electronic headquarters of the Cadastre. This is a theoretical value of the price of the property, which is different from the cadastral value, and does not have to coincide with what we will actually pay for the property. The real value of the property is replaced by the reference value recorded in the Cadastre. We must not confuse the cadastral value, which takes into account the location of the property, its condition, age, etc., with the market reference value calculated from the transactions of properties carried out before a notary in the area where the property is located. However, the problem that many buyers face today is that the reference value does not take into account either age or condition of the property, and the location of the property in some cases is very broad, and is not limited only to sales of the same building or buildings with similar age, condition, and characteristics. This poses a risk, as it may exceed the theoretical value compared to the real one, implying a higher tax payment, in which case the taxpayer will have to demonstrate that the value of the property is lower than the cadastral reference value. The burden of proof lies with the taxpayer, who in this case is the acquirer.
The ITP is a regional tax that varies from 4% to 10% depending on the autonomous community. The lowest percentages are associated with special conditions such as being a large family or having a disability of 33% or more among others, provided that the acquisition is of a primary residence. However, it is normal to range from 7% to 10%.
In the case that a professional rather than an individual acquires the used property, they may choose to pay VAT instead of the ITP. Normally, the VAT payment is higher than the ITP, but it can be deducted totally or partially.
If the purchase price of the property is higher than the reference value, the tax must be paid based on the purchase price, as it is of greater value.
How to proceed to challenge the reference value if it is higher than the real value of the property?
There are two ways to proceed;
1- Pay the tax determined by the cadastre and request a subsequent appeal.
2- Pay the tax based on the real value of the property and appeal the reference value and the settlement.
