Posted: Sun Mar 6, 2022 1:57pm
That's a good point, Robin, property transfer tax (ITP) never gets a mention on "A Place in the Sun"!
It also reminded me that there was a change in the law in January this year regarding the "reference value" used for calculating the ITP. All reference values, which are based on the cadastral (land registry) value of a property, have been reviewed. This is another way of overcoming vendors and buyers who under-declare the sale value at the Notary and top-up with 'under the table' payments. From January, it's the reference value that will be used to calculate the transfer tax.
For example, in the Comunidad Valenciana region, ITP is set at 10% of the selling price, so if you were to buy a property at €150,000, you would expect to pay ITP of €15,000. However, if the new reference value has been set at €175,000, the ITP will be €17,500, even though you've only paid €150,000 for the property. Conversely, if the reference value of a property is €150,000, but you agree a higher purchase price of, say, €165,000, the transfer tax will be based on the actual selling price, even though it's higher than the reference value. So I think it's worth buyers checking with the relevant Town Hall what the revised reference value is, prior to making an offer.
Kind regards,
Kim