Transfer Tax of Public Auction Purchases
Fortunately, the transaction would never attract the penalties envisaged for those transactions where the declared price/sell off price fell short of 20% and 2 million pesetas of the offical declared value.
However, the Spanish Supreme Court, following the opinions of previous court rulings (TS 1-12-93 TS 5-10-95 TEAC 7-3-96) declared a partial annulment of article 39 of the RITP (Transfer Tax regulation), and identifies the sell off price with the base for calculating the transfer tax, without conditions. This means that the Tax Authority is not entitled to raise a supplementary demand for tax if they consider the sell off price is lower than the offical value given by the Tax Authority to the auctioned property.
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