One of the most surprising tax novelties that 2022 has brought us has been the modification of the tax base in the Tax on Patrimonial Transfers and Documented Legal Acts (ITPAJD) and in the Tax on Inheritance and Donations (ISD). Law 11/2021, of July 9, on measures to prevent and combat tax fraud, has replaced the concept of real value (parameter that operated until this year to determine the tax base) by that of value (plain), understanding by this what it calls market value, which in the case of real estate will correspond to the (new concept) reference value.
The justification mentioned in the explanatory memorandum of the law to explain this change is to avoid litigation generated by the concept of “real value” and the verification systems used by the regional administrations. In addition, for the sake of legal certainty, it is established that the tax base is the reference value provided for in the Real Estate Cadastre Law (Royal Legislative Decree 1/2004, of March 5). Thus, the reference value is determined by the General Directorate of Cadastre.
Of course, if the transmission price agreed between the parties is higher than the reference value, the latter will prevail as the taxable base of the tax to be applied. This modification establishes a minimum value to be taken into account as the taxable base of the tax, which, however, may be higher than the real value of the transaction that gives rise to the taxable event.
In other words, if we accept that the market value is the price agreed between independent parties in conditions of free competition and we must pay taxes for a higher value (the reference value) and the reference value is higher (a circumstance that we are verifying in multiple transactions held in 2022) we will be violating the constitutional principle of economic capacity (art. 31 Spanish Constitution).
For these purposes, it is worth recalling the Judgment of the Supreme Court of June 18, 2012, which establishes: “There is no more accurate definition of what should be understood as the real value of said properties than that of 'price that would be agreed upon under normal market conditions between independent parties'”. The market value of a property is determined by the law of supply and demand and is not a static concept but is influenced by a multitude of factors and circumstances that make it practically impossible for it to be established in a general and a priori way for everyone. the properties of an area or a street.
According to what we are told, the reference value is determined by the General Directorate of the Cadastre as a result of the analysis of the prices of all the real estate sales that are made before a notary, based on the data of each property recorded in the Real Estate Cadastre. We are also told that the reference value cannot exceed the market value, so a reduction factor is applied (in this case 90%).
At this point and under this scenario, we are encountering taxpayers who purchase second-hand homes for prices below the fixed reference value and express their disagreement with having to pay taxes based on said reference value, higher than the one truly satisfied to the seller. .
In this case, our most prudent advice would be to present the self-assessment taking the reference value as the taxable base and, subsequently, request the rectification of said liquidation contesting said reference value.
Therefore, now it will be the taxpayer himself who must demonstrate that the reference value provided by the cadastre does not coincide with the market value and therefore with the value for which the base has been established in the public deed.
This will undoubtedly entail the need to provide an appraisal of the property, certifying (logically after a physical inspection of the property) that the market value is in accordance with that declared in the public document.
The alternative of self-assessment based on the price set forth in the public deed would give rise to disciplinary proceedings when the management bodies proceeded to verify the operation.
In conclusion
- After the aforementioned reform, the reference value of a property is configured as a basic and fundamental data at the time of any transaction to be carried out with it. It must be known by all parties prior to any decision.
- Dismembering the taxable base of the real value of the operation may mean having to pay taxes for an amount greater than what is truly paid and this in contravention of the constitutional principle of economic capacity. Beware of future jurisprudence of our highest court in this regard.
- The reality of the market shows an increase in the cost of second-hand housing due to this novelty.
- The collateral effect with other related taxes, such as personal income tax, shows fiscal asymmetries that are difficult to justify. Think of the case of a sale where the acquirer settles ITPAJD for the reference value, higher than the one actually paid, while the transferor will declare in his personal income tax as the transmission value in his personal income tax the one that appears in the deed.
- Likewise, in the Wealth Tax for real estate acquired from 2022. Violation of the principle of equality?
As we can see, too many questions for a rule that has just been incorporated into our legal system.
Antonio ballester
Managing partner of Tomarial
