Changes to property transfer tax

[BeachLife]

I don't know if any of you have been following this, but there have been changes - non of which will be in the seller's, transfers or inheritors favour

Extract:

" When property is transferred from one person to another in Spain there is a tax to pay. From January 2022, inheritance, donation and transfer tax, will all be affected by the new ‘reference value’ in Spain, in Spanish it is called Valor de Referencia.

If you have property in Spain or are considering buying somewhere, then you should be aware of the new ‘reference value’ in Spain that has been introduced. This value will determine how much tax you must pay when your property is transferred to another owner.

The new ‘valor de referencia del inmueble’ was introduced at the beginning of January 2022 in order to calculate property transfer taxes such as the ITP (Impuesto sobre Transmisiones Patrimoniales)  and ISD (Impuesto sobre Sucesiones y Donaciones) – inheritance and donation tax."

https://blog.abacoadvisers.com/new-reference-value-in-spain/

[Aficionado]

The sting in the tail of it is this bit:

"The bad news is that if the sale price is higher than the reference value then the tax will be based on the sale price. However, if the sale price is less than the reference value it is the latter that will count. In other words, there is no win, win on this. You will always be charged at the higher value"

Best you can hope for, if selling, is that you sell for more than this "reference value", at least that way your percentage charge won't go way up. Imagine selling for 1/2 of the reference value, because property prices have taken a dive just at the wrong time, it would effectively double your taxation hit. No way is this a fair and equitable system.

[chris and jackie]

None of the Spanish tax system is fair!