Determination of the tax base for ITPAJD when no reference value is available

The determination of the tax base in the Transfer Tax and Stamp Duty (ITPAJD) is a critical aspect of real estate acquisition. A recent binding ruling from the Directorate General of Taxes (DGT) clarifies the procedure to follow when the Administration does not have a reference value for the transferred asset.

What the DGT has resolved

The ruling addresses the question of which magnitude should be used as the tax base for the calculation of the tax when no reference value exists or when it cannot be certified by the Directorate General for Cadastre. The DGT has resolved that, in the absence of such a value, the tax base shall be the highest of the following three magnitudes:

• The value declared by the parties involved in the transfer.
• The price or consideration agreed upon between the parties.
• The market value of the asset.

Consequently, the taxpayer is obliged to compare these three values and apply the highest one for the calculation of the tax, in accordance with the provisions of the TRLITPAJD and the General Tax Law.

What it means for you

This criterion has a direct impact on natural persons purchasing real estate for which no reference value is recorded in the Cadastre. For residents or expatriates acquiring properties in Spain, this scenario implies that it is not enough to declare the purchase price if it is lower than the market value. If the market value is higher than the agreed price or the declared value, the administration will demand tax based on the highest magnitude.

What you should do

In an operation of this type, it is necessary to perform an analysis of the three mentioned magnitudes to avoid potential contingencies with the Tax Administration. Since determining the market value can be complex, it is fundamental to have elements that justify such a valuation. It is recommended to assess each particular situation to ensure that the applied tax base is correct according to current regulations.