According To Reiterated Jurisprudence, The Tax Authorities’ Verification Of The Value Of A Property Declared By A Taxpayer As An Asset Acquisition Subject to The Property Transfer Tax Must Include An Expert Examination of The Property’s Current State

20 February 2009

Art. 46 of the Wealth Transfer Tax establishes the administration’s capacity to review, on their own initiative, the true value of the transferred assets subject to this tax. Article 160 of the General Guidelines for Management and Inspection specifies that the expert’s verifying report ordered by the administration must include a personal review of the valued asset when it is a singular asset or an asset for which all relevant circumstances cannot be ascertained from contrasting documentary sources.

An example of a defective valuation carried out by the administration can be found in the Valencia Supreme Court Ruling dated February 23, 2007. Said ruling examines the case of beneficiaries who challenged an expert property valuation by the tax authorities modifying the transfer price and affecting the Wealth Transfer Tax that the taxpayer had paid.

The Court ruled in favour of the taxpayers in the end since the valuation carried out by the Tax Authorities was solely based on the average market value of the property (the price at which a property with similar characteristics can be purchased in the market) without any record of a visit to same by the competent expert.

For further information, please contact Javier Valls Aracil: