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V2909-17 13 November 2017 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · valor real

Authorities may verify the actual value of an asset if the declared price does not reflect market value

A query was raised regarding whether a property transfer should be taxed based on the purchase price or the average market price in the area. The Directorate General for Taxes (DGT) ruled that the tax base must be the actual value and that the Administration may challenge the declared value through value verification procedures.

The question raised

Whether taxation should be based on the average market price, knowing that it does not reflect reality, or whether, conversely, taxation should be based on the purchase price.

The DGT's ruling

The tax base is the real value of the transferred asset. The value declared by the parties is not binding on the Administration, which may verify the real value through the means provided in Article 57 of the General Tax Law. The declared value shall only be binding if the values published by the Administration itself have been used in compliance with legal requirements. The interested party may appeal the valuation through a contradictory expert appraisal.

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