If you are planning to buy a house or are going to sell yours, keep in mind that it is very likely that you will pay more transfer or capital gains tax. Buyer and seller see, since January 1, how the two taxes have risen considerably for many properties in Badajoz. And not because of an increase of the type that is applied to each tax, but because the Treasury has changed the valuation it makes of each second-hand home or garage. In most cases upwards. The consequence is that the amount to be paid for taxes also rises.
TODAY has analyzed nine different cadastral references in different parts of the city. In a 130-square-meter flat on San Isidro street, the increase was barely 2.5%, but for a 290-square-meter house next to the Adorers, the rise skyrocketed to 259%. And that has consequences whether the house is bought or inherited or sold.
On January 1, the anti-tax fraud law came into force and, with it, the new reference value of the Cadastre. This means that the taxpayer will not pay taxes for what the operation has cost him, but for the value approved by the Government for his house.
If until December 31 the fiscal value (resulting from multiplying the cadastral value by 1.82) was used to calculate taxes, now the reference cadastral value is used.
In practice, people from Badajoz pay more for the Property Transfer Tax (ITP), which is paid when buying a used home and is 8% of the reference value. Or the Inheritance and Gift Tax (ISyD). The seller also usually pays more for the Capital Gain. In the event that the owner pays the Patrimony tax, they will also verify an increase, although only if they acquired the property as of January 1, 2022. The tax that escapes the new value is the IBI, which is levied on the property and is the one that the people of Badajoz pay every summer.
As Transmissions or Capital Gains are paid only once, in the purchase sale, the people of Badajoz barely notice the change. Although the real estate companies warn that relevant increases are being verified. “There is a hidden rise in taxes,” explains the owner of the García Márquez Real Estate network, Mariano García-Sardiña. “In some cases there are substantial differences,” he notes. And not just in homes. For a parking space sold through his company just a few days ago, the calculation base has gone from 10,000 euros to 15,000 euros. “The difference is remarkable and in homes where the value rises by 30,000 or 40,000 euros even more.”
“There is a hidden tax increase and there are cases with substantial differences”
mariano sardiña, real estate garcia&márquez
«This has incidences for the Transmission tax paid by the buyer and for the Capital Gains paid by the seller. Although the interest rate of taxes has not increased, in the end it is a hidden tax increase », he stresses. And he warns that the new reference value “is always higher” than the fiscal value that was taken as the basis for calculating taxes.
They do not value the state
From the Idealista portal they point out that the Treasury does not take into account the state of conservation to calculate the new reference because the properties are not visited, as well as that the value will be updated year after year. The figures are determined by the General Directorate of Cadastre and are based on real property sales prices by area, according to information provided by notaries and registrars.
All of this is better seen with the examples described in the table below and by talking to real estate agents in the city, now that the new method has been in operation for three months. The most pronounced difference of the nine consulted by HOY is found in San Atón street, next to the Adorers, in the upper part of the Old Town.
In that street there is a house of 290 square meters built that has gone from having a fiscal value of 37,702 euros to 135,352 euros, which is its reference cadastral value. The increase is 259% and, with it, the Transmission and Capital Gains tax that the buyer and seller would pay in the event of doing so. The Transfer Tax, which is 8%, grows from 3,016 euros to 10,828 euros.
Examples of change in Badajoz
The increase from the fiscal value to the new reference value for a house of 290 square meters built on San Atón street, next to the Adorers, is 259%. From 37,702 euros it goes to 135,352 euros. The transfer tax rises from 3,016 euros to 10,828 euros.
Single-storey house of 30 square meters on Sepúlveda street. From a fiscal value of 15,680 euros it goes to 29,873 euros, with an increase of 90.51%. In the case of the Transfer Tax, which is usually 8%, it grows from 1,254 euros to 2,389 euros.
Detached house on Sierra del Naranjal street. The fiscal value was 161,388 euros and the new one amounts to 255,141 euros. That is, 58.09%.
45 square meter apartment on San Pedro de Alcántara street. The value for the Treasury in 2021 was 48,663 euros and now it is 61,354 euros; 26% more.
Housing in Manuel Alfaro street, in the area of Europa avenue. If the Transmission tax was calculated on 128,000 euros in 2021, now it is done on 152,500 euros. It is 19.14% more.
100-meter apartment built in the well-known block, between Colón and Santiago Ramón y Cajal avenues. It had a fiscal value of 121,238 euros and went to 133,155 euros on January 1. Up 9.83%.
Floor of 85 meters built on the avenue of Peru. It had a fiscal value of 74,018 euros and has gone to 80,285 euros. Increase of 8.5%.
Low floor of 100 square meters and in poor condition on Concepción Arenal street. The fiscal value was 45,675 euros until December 31 and from January 1 it is 48,689 euros. Increases 6.6%.
130 square meter apartment on San Isidro street. The value granted by the Treasury was 123,463 euros in 2021 and now it is 126.54 euros. It grows 2.5%.
The increases also affect the tax on Documented Legal Acts, which is 1.5%, in the event that, for example, the owner declares a larger area than the one originally deeded.
Habitat, some low
They are not so sure that all values will go up in Habitat. Its coordinator in the city, Ignacio González, witnessed a few days ago the sale of a chalet in an urbanization of Cáceres, in the surroundings of Bótoa, where the value has been reduced by 20,000 euros. It has gone from 155,000 to 135,000 euros. And that has made the buyer pay less to the Junta de Extremadura for Transmissions this March than he would have done in December. He also warns that not all properties have a new reference value. In this case, they take advantage of the fiscal value that applied to December 31.
Diego Domínguez, director of IHS Real Estate, has not yet seen any downward case. In all he has risen. Even in one the client has bought for a price lower than the value given by the Treasury. And he has had to pay based on the highest.
Although Catastro ensures on its website that its valuation is always lower than the market price, this is not the case. «The other day we sold a house in the José Antonio Groups (center) for 58,000 euros, but the buyer had to pay taxes for 70,000 euros. The 12,000 euros of difference have supposed 996 euros more in the expenses of sale for the buyer”, indicates Diego Domínguez. From experience he knows that the purchase value is only taken into account if it is higher than that granted by the Treasury.
«The value rises in all the operations that we have closed in recent weeks, also for garages»
diego dominguez, ihs real estate
«The value rises in all the operations that we have closed in recent weeks, also for a garage in San Roque. So far practically everyone has gone above. 10% in the case of a three-bedroom, two-bathroom apartment in Pardaleras, which has gone from 103,000 to 113,000 euros. A few days ago they signed another operation for a flat in San Roque consisting of three bedrooms, a bathroom and a storage room. From 97,000 euros it has gone to 108,000 euros. “Once again it has been 10,000 euros more,” he underlines, which affects the purchase tax and the provision for bank expenses.
What reaction do people from Badajoz have when they know that they are going to pay more? “People take it.” This 2022 it’s time to pay more.
How to Check the Change in Value of Your Home or Garage
The Cadastre electronic office (www.sedecatastro.gob.es) has a section on the reference value with a special ‘questions and answers’ section. In addition, it is possible to know the current reference value of each home and parking space. You must enter the DNI and the cadastral reference, which can be seen on the IBI receipt.
It is necessary to have a Digital Certificate or PIN Key to carry out the consultation through the Internet. You can call 91 387 45 50 and 902 37 36 35 or go to Management by appointment.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.