In Spain there is a tax on property transactions called Impuesto de Transmisiones Patrimoniales.
I.T.P. is levied at 10% on the value of the property in the Valencian Community.
The tax is paid on the greater of the purchase price or on the catastral value of the property.
The catastral value is the
In the vast majority of cases the purchase price exceeds the catastral value…but with bargain properties it’s increasingly likely that the catastral value will be the greater of the two.
Let’s say for example the bank is selling a property at 45000€, but the catastral value is 50000€.
The I.T.P. tax is therefore 5000€
This means 500€ extra is paid in tax, in this case.
How to calculate the catastral value of a property.
You will need the catastral reference.
This can be found on a SUMA bill or on an EPC certificate.
Can it be contested ? Yes, but I have been informed that the chance of success in the Valencian community is quite slim.