Linking of valuations carried out by other administrations. Previous valuation agreements
Today we are going to deal with a very interesting subject, and with fiscal transcendence, the valuation agreements.
As many of you know, in Andalusia it is possible to calculate (through the website of the JUNTA DE ANDALUCIA) the minimum tax value of properties located in Andalusia (both urban and rustic), for the purpose of settling the Transfer Tax and Stamp Duty (I.T.P), and the Inheritance and Gift Tax (I.S.D).
The above statement should be qualified according to the specific case:
- If the declared value of a property (in public deed), is higher than the minimum tax value, the taxpayer is obliged to declare, for the purposes of payment of I.T.P and/or I.S.D the value stated in the deed, thereby avoiding the risk of receiving a check from the Junta de Andalucía.
- If the declared value of a property (in a public deed) is the same as the minimum value for tax purposes, the taxpayer can declare the value stated in the deed for the payment of I.T.P. and/or I.S.D., thus avoiding the risk of being checked by the Junta de Andalucía.
- If the declared value of a property (in public deed) is lower than the minimum fiscal value, the taxpayer must declare, for the purpose of payment of I.T.P and/or I.S.D., the minimum fiscal value, if he wants to avoid receiving an inspection check, and an additional liquidation, with interests for delay, and in some cases with a penalty.
Through the website of the Junta de Andalucía, it is possible to know the minimum tax values of the properties for the purposes of payment of the Transfer Tax and Stamp Duty, and Inheritance and Gift Tax.
https://www.juntadeandalucia.es/agenciatributariadeandalucia/ov/valoracion/valoracion.htm
It is important to point out that there are two types of valuations, an “informative” valuation and a “binding” valuation.
To obtain the binding valuation, as we have been able to verify by accessing the web application, it is necessary to have an electronic signature and the request must be made by the owner of the “property”.
The “binding” report obtained would be valid for 3 months, and should be included in the public deed of transfer of the property in question (purchase, sale, capital increase, donation…).
If you do not have an electronic signature, do not have the cadastral references of the property, or are not authorised (according to the web platform) to obtain this “binding” valuation, there is another possibility to obtain it, which would be to submit a written request to the tax agency of Andalusia. The forms for this procedure (at least for rustic properties) are not usually available on the website of the Junta de Andalucía, so it would be necessary to apply for it at any of the delegations of the Junta, or at the offices.
On most occasions, the “advisors” limit themselves to requesting an “informative” valuation (without electronic signature), as they consider (which is true) that by applying this value obtained through the Junta’s web platform, the client will not receive a complementary liquidation from the Junta de Andalucía, however, they forget about the possibility that other tax administrations (for example the tax office) do not accept this “informative” value.
The problem is that this “informative” valuation is not binding for it to be accepted by another administration, so at Netlex we always advise our clients to request a “binding” valuation, for two reasons:
- Because it is free of charge.
- Because we consider that it could be used against possible checks carried out by other administrations (e.g. tax agency), all by virtue of the provisions of the T.E.A.C in its resolutions dated 14 May 2019, and 9 April 2019 (RG 4610/2016) which establish the binding nature for the Tax Inspectorate of the previous valuation of properties carried out by the competent body of the Autonomous Administration.
Let’s look at an example:
Let us imagine the case of a person who intends to contribute a property he owns, which he once acquired for the price of €100,000, to a trading company in order to use it for the economic activity of that company.
- According to the valuation obtained by the Junta de Andalucía (binding valuation) the property is valued at €150,000.
- According to the valuation obtained by an “official valuation company” the property is valued at €200,000.
On the basis of this information, the question arises as to which alternative would be more advisable.
Well, in the present case, if the taxpayer has a valuation agreement for the property, issued by the Junta de Andalucía (150,000€), which is incorporated into the deed (in this case of capital increase), even if this value is lower than that obtained through an independent expert valuation, we understand that it would be the reference value that the taxpayer should consider, both for the purposes of settling the operation in I. T.P.T., as well as for the purposes of declaring said transfer in his I.R.P.F. tax return, for the aforementioned reasons, even in the event that he would pay a lower amount of I.T.P. (Corporate Transactions), and I.R.P.F. (Personal Income Tax).
It seems very strange to say this, but in the case of having chosen, as the value of the transfer, the highest value obtained via real estate appraisal, this operation runs the risk of being checked and modified “upwards” by the inspection services of the state tax administration agency (I.R.P.F), and of the tax agency of the Andalusian community (I.T.P), given that this valuation obtained by an expert is not binding. It should be taken into consideration that the experts of the tax administration can use several methodologies to value the properties, and each methodology gives a different value, however, we consider that they would have their hands “tied” to alter this valuation, if the taxpayer uses a previous binding administrative valuation carried out by the autonomous administration.
In our experience, the valuation obtained through the application provided by the Junta de Andalucía, for those properties that have a cadastral reference, is usually lower than the one provided by the real estate valuers, which is why it is a tool to be taken into account by any tax advisor.
However, obtaining prior administrative valuations would not be the appropriate way to value properties in certain cases, in which it would be advisable to hire the services of a real estate appraiser.
At Netlex asesores, we offer our clients real estate appraisal services, through opinions issued by independent experts.