If you have received a complementary settlement on account of which the tax office claims an amount higher than that paid in the tax settlement, AFINCARTE can advise you and will prepare the statements and appeals you should submit to the relevant administrative department.
- Tax on patrimonial transmissions and documented legal acts
They are complementary settlements due from the acquisition of second-hand properties, also known as complementary settlements for transmissions, settlement proposals, parallel settlements, value verifications, etc.
In this case, the steps to follow will include: writing a pleading and, once the definitive settlement is received, lodging an appeal for reversal or an economic and administrative claim before the Regional Economic-Administrative Tribunal (TEAR).
The possibilities of obtaining a condemnatory judgment from the TEAR are very high if coherent and reasonable justifications are alleged, as the tribunal is aware that the administration is irrational in many cases.
It should be noted that a complementary settlement concerning the tax on capital transfers and documented legal acts, due to which the tax base is increased, has consequences to the buyer, but also to the seller.
Moreover, regional tax offices frequently send an additional tax to the buyer, apart from that paid after the purchase including the proportional delay charges.
This is due to the fact that public deeds list the real price paid in the purchase transaction, but the value assigned to that building by the administration is considerably higher, since the appraisals were not revised after the housing crisis and this caused downward fluctuations of prices in real property market.
- Tax on urban land value increase: Local capital gains
This tax is levied on the increase in value of urban-nature lands for the period during which it was owned by the transmitter (for a maximum of 20 years). Any owner that transfers a property, either through buying, selling, inheritance or donation, is bound to settle this tax before the local administration.
Depending on whether or not the local capital gains are settled on the real value of the property, the city council may send you a complimentary settlement to which you should add the corresponding tax.
If this happens, it is necessary to confirm if the settlement was properly conducted and if the real value of the land was taken into account. In some cases, as a result of the economic crisis, this amount could be lower than the acquisition value, thus the increment in value would lead to tax exemption and hence you would not be obliged to pay it.
- Inheritance and donation taxes
Starting 1st January 2016, the first 400,000 EUR of ascending, descending or conjugal inheritances are exempt from this tax. Nevertheless, this does not apply to inheritances from siblings, aunts or uncles, cousins, etc. The taxation of these inheritances will continue to be excessively high.
In these non-exempt cases, the amount to be paid can achieve significant costs; therefore it is essential that buildings appraisals are adjusted to the market. In case the Galician tax office sends a complimentary settlement, it is recommended to check if the value given to the goods is correct and lodge the corresponding appeals, since the amount to be paid can be considerably reduced.