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AEAT House valuations

AEAT House valuations

Old Jul 21st 2019, 11:33 am
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Default AEAT House valuations

I want to buy a Spanish property and I would be interested to know what value the tax office places on it (as they might demand more tax later if they disagree with the sale price) how do I find this information out?
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Old Jul 21st 2019, 11:43 am
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Default Re: AEAT House valuations

Originally Posted by spainrico
I want to buy a Spanish property and I would be interested to know what value the tax office places on it (as they might demand more tax later if they disagree with the sale price) how do I find this information out?
It's not the AEAT valuation but that done by the Cadastral Office (and then multiplied by a figure by your town hall depending on when it was last valued).

Fred may be able to explain this better.
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Old Jul 21st 2019, 11:51 am
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Default Re: AEAT House valuations

OK so it is not like buying a 2nd hand car - the transfer tax is based on a pre-published list of car valuations...

I understand property transfer tax is at 10% (Comm Valencia) and at the time it will be based on 10% of the sales price - but I understand AEAT may come back and ask for more if they deem the value was too low.

The cadastral value is set and used for IBI taxes.

So do AEAT look at all transactions or how does it work?
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Old Jul 21st 2019, 12:33 pm
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Default Re: AEAT House valuations

Hi.

We purchased an apartment earlier this year and its Cadastral value is about €14k more than we paid.
The apartments were built in 2005 and they have not been revalued since.

Our solicitor was the one who gave us the information but sometimes the extra tax comes as a bit of a surprise.
As yet we have had no notice to pay this 'extra tax' but Im not hopeful of getting away from it. We can appeal when we get the bill but its going to cost about the same amount as the estimated bill.
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Old Jul 21st 2019, 12:40 pm
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Default Re: AEAT House valuations

To work out the official valuation you need the catastral value and a coefficient which is set for each municipality.

You can find the coefficients for Valencia here

http://www.hacienda.gob.es/Boletines...2019/61936.pdf

I dont know whether they check every property transfer but I imagine their computer works it out for every transaction and flags any that are higher than the sale price. It is usually some time before they send you a demand.

It should never be a surprise because your lawyer is more than capable of working out whether you may have a problem and advising well before the actual purchase - sadly most of them are too lazy to be bothered.
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Old Jul 21st 2019, 1:03 pm
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Default Re: AEAT House valuations

Thanks Fred and Barriej.............so are we saying that only if you pay less than cadastral value you could be in for a problem?

Fred - OK looks like that document holds all the answers but looks amazingly complicated!
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Old Jul 21st 2019, 2:09 pm
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Default Re: AEAT House valuations

It looks complicated but all you need to look at is Annex 11 and it’s the cm value that is the one you want. Multiply your catastral value by the cm for your municipality. If I comes out higher than the sale price you could have a problem. If lower you’re OK
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Old Jul 21st 2019, 2:14 pm
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Default Re: AEAT House valuations

Thanks, Fred as always you are the man! It came out lower, brilliant.
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Old Jul 21st 2019, 3:21 pm
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Default Re: AEAT House valuations

Originally Posted by Fred James
It looks complicated but all you need to look at is Annex 11 and it’s the cm value that is the one you want. Multiply your catastral value by the cm for your municipality. If I comes out higher than the sale price you could have a problem. If lower you’re OK
A long time ago since we bought our house but official valuation was higher than we paid. It has never been an issue. Our catasteral value bears no resembalence to either official valuation or what we paid.
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Old Jul 21st 2019, 5:00 pm
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Default Re: AEAT House valuations

There is rarely any correlation between the values. My Catastral value is about one tenth of its lowest conceivable sale value.
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Old Jul 21st 2019, 6:20 pm
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Default Re: AEAT House valuations

Originally Posted by Barriej
Hi.

We purchased an apartment earlier this year and its Cadastral value is about €14k more than we paid.
The apartments were built in 2005 and they have not been revalued since.

Our solicitor was the one who gave us the information but sometimes the extra tax comes as a bit of a surprise.
As yet we have had no notice to pay this 'extra tax' but Im not hopeful of getting away from it. We can appeal when we get the bill but its going to cost about the same amount as the estimated bill.
We were caught by this in 2010. Paid up the transaction tax and all quiet for about six months before a further demand came through based on cadastral value, some 20% higher than we had actually paid as it was a "distress sale" . When the demand came we pleaded poverty and were allowed to pay the extra back over three years in monthly installments with minimal interest charges.
Of course the other aspect is that the castastal value had been calculated in 2008 before the property downturn. Our lawyer was prepared to appeal but the process is complex and quite expensive requiring expert opinions from external engineers etc etc.
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Old Jul 22nd 2019, 8:16 am
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Default Re: AEAT House valuations

Yes, this is the situation I was posting about. It is a very long time since I completed a property transaction so I was trying to understand the potential pitfalls. Thanks to everyone for contributing.
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Old Jul 22nd 2019, 10:06 am
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Default Re: AEAT House valuations

On my last purchase (c.2016) we received a demand for the notional extra value. Our lawyer appealed and won for a 250 euro fee.
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Old Jul 22nd 2019, 8:47 pm
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Default Re: AEAT House valuations

I think the phenomena is an unfortunate legacy of the once widespread if not standard practice of under valuing property in order to take the difference under the table.
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Old Jul 23rd 2019, 7:48 pm
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Default Re: AEAT House valuations

Originally Posted by Notdunroamin
I think the phenomena is an unfortunate legacy of the once widespread if not standard practice of under valuing property in order to take the difference under the table.
Exactly that - under-declaring the sales value of the property that's why the dual valuation process was put in place.
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