·         21-11-24
Buying a squatted home can be attractive due to the initial savings, as these properties are usually sold between 30% and 50% cheaper than their market value. However, when we talk about taxes, things change, and there are not always tax advantages. The Treasury has clarified how this type of operation is taxed and what options taxpayers have if they do not agree with the valuation of their property.
How is a squatted home taxed?
The Property Transfer Tax (ITP), which varies between 6% and 10% depending on the autonomous community, is applied to a taxable base that does not always coincide with the purchase price. According to the General Directorate of Taxes (DGT), if a home does not have a defined reference price (as occurs in cases of squatting), the Tax Agency will determine the taxable base taking as a reference the highest of these three options:
1. The value declared by the buyer.
2. The purchase price indicated in the deed.
3. Market value.
In the case of squatted homes, the market value usually prevails, regardless of the fact that the purchase price is much lower due to the condition of the property.
Why is there no reference price for squatted homes?
Taxes explain that a property will not have a reference price if there is no legally regulated relationship between the owner and the occupant. For example, if there is no rental contract that allows the owner to freely dispose of the property, the Land Registry will not assign a reference value to the property.
What can you do if you do not agree with the valuation?
If the Treasury determines that the market value is higher than the purchase price and this impacts the tax settlement, you have two options to challenge it:
1. Challenge the settlement after the purchase.
o Once the Tax Agency issues the tax settlement, you can file a claim if you consider that the value assigned to the property is not correct. o The Treasury will review the case and ask the Cadastre to ratify or correct the value based on the evidence you present.
2. Appeal against the Cadastre’s reference values.
o Every year, the Cadastre publishes the reference values ​​of the properties on its electronic site before October 30.
o Before doing so, it opens a 10-day collective hearing process (announced in the BOE) so that citizens can present allegations.
o The final resolution is published in December and can be appealed within a month before the economic-administrative courts.
Conclusion
Although acquiring a squatted home may seem like a good deal due to the reduced price, it is essential to consider the fiscal impact of the operation. The Tax Agency has the last word on the taxable value and, in most cases, this will be the market value. However, if you are not satisfied with the valuation, remember that you have legal avenues to claim and adjust the taxation.
Have you faced a similar case? Tell us about your experience in the comments. We’ll be happy to answer your questions!