In previous articles, we have frequently discussed the so-called Reference Value, explaining what it entails and the possibility of challenging it. In this week’s article we wish to focus on an aspect that is unknown to many. The possibility of “claiming against the reference value” in special cases. We are referring to situations where the reference value does or should not exist.
What is the reference value and what is its purpose?.
The Reference Value is an indicator established by the General Directorate of the Cadastre, which measures the value of real estate properties in Spain. Unlike the cadastral value, the Reference Value is a public indicator that any citizen may consult. This indicator impacts various taxes: Transfer Tax, Stamp Duty Tax, Inheritance and Gift Tax, etc. The taxpayer is required to always pay tax based on the higher value between the declared value in the deed and the Reference Value.
What happens when a property does not have a Reference Value?.
When there is no reference value, the parties are free to set the value they deem appropriate. However, the Tax Administration may review this value based on market prices or values used in similar transactions. If they consider that the value set by the parties does not reflect the real value of the property, the Administration may review the tax paid by the taxpayer and require the payment of the difference.
Cases of the absence of a reference value.
The opposite may also occur, meaning that there should not be a Reference Value assigned to some specific properties, but one has been assigned, nonetheless. What exactly do we mean by this?. According to the Resolution of 23.10.2024 of the General Directorate of Cadastre, there are certain cases where a property should not have a reference value:
.- Real estate with a sale price administratively limited (official protection housing VPO).
.- Residential properties where there is no legal relationship between the owner and the occupant, preventing the free disposal of the property (homes with squatters).
.- Properties damaged by a civil protection emergency or by natural or human-made disasters.
.- Properties whose transfer is set by public auction, whether judicial or administrative. What can be done in these cases?.
What to do when a property has been assigned a reference value, but it shouldn’t have one.
If you are considering purchasing a property occupied with a squatter, or one classified as Protected Social Housing (V.P.O) you could pay the corresponding tax based on the assigned reference value (even if it is incorrect); and then request a refund for undue payments. For this, you will need to provide evidence proving the existence of this situation. For example, if the property is illegally occupied: photographs, a court resolution related to the occupation, or any other document confirming that the property had squatters.
The deadline to claim a refund for undue payments due to an incorrect reference value is 4 years. If you find yourself in a similar situation and wish to engage in claiming against the reference value, at White-Baos Lawyers we can help you. Do not hesitate to contact us today. We will study your case and provide expert legal advice on the matter.
The information provided in this article is not intended to be legal advice but merely conveys information relating to legal issues.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
E-mail: info@white-baos.com
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