It is noticeable that the Christmas holidays are approaching, with the illusion in the streets full of people, the children running down the street, the Christmas lights of our beloved Calle Larios, and from MDG Advisors, we want to join in that joy, and inform you of a recent consultation of the Directorate General of Taxes, which on this occasion, is not to the detriment of the taxpayer.
As we know, and this is nothing new, article 10 of the revised text of the Law on Transfer Tax and Stamp Duty, approved by Royal Legislative Decree 1/1993, of 24 September, establishes that ‘the taxable base is constituted by the value of the property transferred or of the right that is constituted or transferred’.
In the case of real estate, its value will be the reference value provided for in the regulations governing the land registry, at the date of accrual of the tax.
However, if the value of the real estate declared by the interested parties, the price or agreed consideration, or both, are higher than the reference value, the higher of these values will be taken as the taxable base.
And in line with the above, and with the aim of providing you with the good news that we mentioned at the beginning of the blog, the Directorate General of Taxes in the binding consultation V2002-24, establishes that in cases where a property is acquired that is occupied, tax may be paid on the acquisition of the same at the acquisition value instead of the reference value, representing a tax saving for the taxpayer, since normally when a property is acquired that is occupied, the acquisition value is lower than the value determined by the Cadastre (reference value).
This is due to the fact that according to the Resolution of the General Directorate of Cadastre, in the case of residential real estate, where there is no legal regime regulating the relationship between owner and occupier (when the two do not coincide), and this prevents the free disposal of the property by the owner, this is a situation which may imply, where applicable, that the reference value of a real estate does not exist.
Taking into account this change of criteria, we are reviewing all the deeds of purchase of real estate that our clients have made in order to request the return of undue income in favour of our clients.
If you find yourself in a similar situation, we remain at your disposal to provide you with the best advice on the regularisation of your tax situation.
Leticia Cayuela Mayor
