On June 1, 2016, Order 3/2016 was published in the Official Gazette of the Valencian Community (DOCV), approving the coefficients applicable to the cadastral value for the purposes of taxes Tax on Patrimonial Transmissions and Legal Acts Documented (ITPAJD) and Inheritance and Donation Tax (ISD), effective as of the day following its publication, June 2, 2016.
This new Order 3/2016, establishes a more elaborate valuation method than the previous ones (remember that recently the Order corresponding to the 2013 exercise was declared void and expelled from the Legal Order by the Superior Court of Justice of the Valencian Community). From now on, in addition to the municipality, the situation will be taken into account according to the postal code, if it is a garage / storage room or a house, the plant in which it is located (if it is an attic with terrace the coefficient will be multiplied by 1,10), or if the building where it is located has an elevator or not. For example, the coefficient of municipality in the city of Valencia is 2,58. However, if we had an attic (1,10) on Colón Street (according to the Order, the coefficient in the postal code of this street will be multiplied by 1,19) the coefficient will amount to 3,38 [multiplier coefficient = coefficient of municipality x district coefficient x plant coefficient x usage coefficient].
As to what taxable facts the coefficients will apply, the Order establishes that they “may be applied in the value checks related to taxable events of the ITPAJD and the ISD produced in 2016 when the procedures in which such checks are made start from the entry into force of this order".
However, when a taxpayer had declared a value equal to or greater than the result of the application of the coefficients referred to in this order, that value shall prevail and the Generalitat's Tax Administration shall not proceed to verify said value. by other means.
It should also be noted the provisions in the explanatory statement of the Order and in its article 4, where the Ministry says it is aware of the controversy between the decisions of the administrative litigation rooms of the TSJ, without existing, jurisprudence to date applicable to the case, regarding the suitability of the means provided for in letter b of article 1, paragraph 57 of the General Tax Law (which deals with the verification of values by means of estimation by reference to values that appear in the official records of fiscal nature) to determine the real value for the purposes of ITPAJD and ISD. Therefore, as long as there is no jurisprudence on the subject, The application of this order is limited to the effects in which the taxpayers request information on the value for tax purposes of the real estate that will be transferred (Article 90 of the LGT - information prior to the acquisition or transfer of real estate).
Finally, the first Transitory Provision of the Order establishes that the verification of value in this matter, as long as there is no jurisprudence on the suitability of the verification method to be used, will be carried out by applying one of the provisions in paragraph 1 of article 57 of the LGT, especially the expert opinion of the Administration. That is, from now on, each time they make a check of values for the purposes of the affected taxes, it will be through the visit of an expert (unless there is a mortgage appraisal).
In summary, the Ministry of Finance of the Generalitat Valenciana will only use the coefficients established in this Order when a taxpayer requests information prior to the transfer of the property on the tax value thereof; and in the case that the Administration carried out a verification of values, it will do so, mainly, by the expert opinion system.
Salvador Dominguez Calomarde
Fiscal Area Collaborator
