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THE HOUSING LAW REACHES CONGRESS
7th March 2022
Treasury inflates home valuations and forces taxpayers to pay more taxes
25th April 2022Treasury inflates home valuations and forces taxpayers to pay more taxes
Cadastral valuations in many cases exceed the value stated in the deeds by more than 60%, which affects taxes such as the ITP.
Since last January 1, the new reference value of the Cadastre is the tax base for taxes as important as the Property Transfer Tax (ITP), Documented Legal Acts (AJD) or the Inheritance and Gift Tax (ISyD). In other words, it is the key to determining how many taxes must be paid for the purchase, inheritance or donation of a used home.
The Government included this change in Law 11/2021 on measures to prevent and combat fraud, approved last summer, and in its first months of operation it is already having a direct and negative impact on taxpayers: it is causing a sharp rise of real estate valuations and, therefore, increasing the tax settlements that taxpayers must make.
According to the newspaper El Economista, many Treasury appraisals are exceeding the value that appears in the deeds by more than 60%. In some cases, the 'new' treasury appraisal even doubles the deed value. Some numbers that put on the table the tax blow that experts in tax matters have advanced so much since the Government approved the regulations.