Recently, a client received the letter 'Propuesta de Valoración y de Liquidación Provisional'. An unpleasant surprise. This is the so-called la complementaria: Spanish tax authorities are demanding extra taxes on the purchase of a property in Spain.
Why extra taxes?
Since the property crash of 2008 - 2009, there have been many bargains in Spain. With little money, you can snap up a nice second home. However, these low property prices also reduce registration tax revenues. Of course, the Spanish tax authorities don't like that. When you buy a resale can buy property at a very interesting price, you run the risk of la complementaria.
What is la complementaria?
The law states that the Spanish tax authorities may check the purchase price after purchasing the property. Based on a number of criteria, the local tax administration checks the tax value of the property. Afterwards, the tax value is compared with the purchase value in the notarial deed. If there is a significant difference, the tax authorities may claim the registration duties on this difference + interest. The complementaria is therefore an additional assessment and a request for additional payment of registration fees. This system is similar to the control estimate in Belgium. The tax value is a similar concept to the venal value of a property in Belgium.
You are buying a Spanish villa near Calpe at a price of 120,000 euros (purchase value). A good deal. However, this purchase price puts you in the sights of the Spanish tax authorities. The tax administration notes that the tax value is 220,000 euros. The difference between the tax value and the purchase value is 100,000 euros. With a registration tax of 10%, the complementaria than 10,000 euros. In other words, the tax authorities will kindly ask you to pay an additional 10,000 euros in registration fees, plus interest.
How is the tax value determined?
The tax value of a property is determined autonomously by the local tax office based on various criteria. These include location, habitable area, year of construction, etc. In some regions, the cadastral value is increased by a coefficient. Moreover, the tax value is not adjusted annually, so some properties have a tax value from before the property crisis. For this reason, cheap resale homes are targeted.
Since January 2022, the valuation of Spanish properties has been automated. The administration relies on actual recorded purchase prices.
How can I avoid an additional assessment?
During the legal examination of the property, we always check the tax value. In a report, we also provide you with a risk analysis. In addition, when buying a property in Spain, we advise you on how to avoid and refute an additional tax assessment.
Last update: March 2022