The 1st of January 2022 marks the date in which new property tax values are applicable in Spain. They have been implemented by the Law of Preventive Measure against Fraud of July 2021 and are likely to bring lots of controversy.

Here’s a quick outline of what to be aware of when it comes to buying or selling property in Spain and when it comes to completing a Spanish probate.

Property in Spain

These new property tax values are said to have been implemented to avoid tax evasion and people still declaring the value of the property below the market value or the price paid.

It is only one week into the implementation of the law, and I have already seen values which are significantly higher than the market value. This is likely to mean paying a few thousand euros on top of what they would have paid if completion took place on 31st December 2021.

Spanish probate

Consideration of this new tax value is also important for inheritance purposes, as the properties will need to be valued according to these values as a minimum.

It will be important to review the values and consider which value to include in the tax returns, to avoid the Spanish tax authority coming back with a tax demand. However, the Notary are likely to warn the parties at the time of the transaction, but make sure your lawyer communicates with you in this respect.

It will be possible to appeal this value providing evidence that the market value is less, however it will need to be seen as to whether the administration will review these values without the need of administrative proceedings in Spain, which in many cases is likely to make the case non cost-effective to pursue.

Watch out and obtain legal advice! A good lawyer should be able to give you information if a value is available so you know as soon as possible how much your liability will be.

If you are planning to buy or sale a property in Spain, or need to complete a Spanish probate, do not hesitate to contact Carmen Calvo on 01273 284 120/07980 596 406.