In home buying and selling operations in Spain, it is common for sellers to want to obtain the greatest economic benefit for it, but there are certain situations in which this does not happen, such as when a home is donated to a family member and it is sold at a symbolic price. . so that it does not appear to be a donation and thus avoid the disbursement of this tax to the Treasury.
Since this is an illegal practice, if the sale price of a property is well below its market value, the Tax Agency can initiate an investigation to find out if there is a crime.
In this sense we can find two different situations, on the one hand, the most serious one, which is having paid “in black” or “B”, or having done so through a purchase and sale contract, where the price that has been paid for the property, and, therefore, where the possibility of a possible investigation by the Treasury may arise.
If the result is considered to be a crime, the Tax Agency may fine the seller. If the sale price of the house is less than 10% of the market value of the home, it is considered that a level of infringement is being committed, and in this case the penalty ranges between 1,000 and 10,000 euros. In the event that it has been sold for less than 5% of the real value of the property, it becomes a serious infraction, punishable by fines of between 20,000 and 100,000 euros and even prison sentences of 6 months to 2 years.
Can a home be sold below the official values?
When a property is acquired, the Cadastre establishes a value for it, taking into account various factors such as its size, characteristics and location, a quote that the Treasury uses to calculate taxes on real estate or other obligations related to housing.
In this sense, it should be taken into account that it is not unusual for the cadastral value of a home to be above the market value of a property, since the Cadastral appraisal is based on historical data and may not accurately reflect . The different changes and fluctuations experienced in the real estate market. This implies that to determine the sale price, market conditions and the factors that influence the price of real estate must be taken into account, and although the official values of the Treasury and Cadastre are a reference, they do not determine the real market value. . .
In this way, once the market value of a home has been determined, a transaction can be negotiated below said official values, although to do so some factors must be taken into account, such as the associated legal and tax implications, since, Although selling below the cadastral value can reduce the seller’s transaction costs, the Tax Agency can continue to demand payment according to its own valuation.
In the eyes of the Treasury, this type of sales below the cadastral value can be considered a form of tax evasion, so, although there is freedom to agree on a sale price, there is a legal obligation to declare the sale for the minimum value. . tax that is set by the corresponding autonomous community. Otherwise, the seller may have to face a judicial process to try to demonstrate that the Administration’s appraisal of the property is disproportionate.
