17 Oct PROPERTIES VALUATION ADJUSTMENT MADE BY TAX AUTHORITY(CONSELLERÍA DE HACIENDA) IN COMUNIDAD VALENCIANA

Many property purchasers (also heirs, and people who have received a donation) in the Comunidad Valenciana Region have received, especially during the last few months, a “supplementary liquidation” for the purchase tax (Impuesto de Transmisiones Patrimoniales) or the inheritance and donation tax (Impuesto sobre Sucesiones y Donaciones).

This liquidation is issued by the tax authority in the Comunidad Valenciana Region (Conselleria de Hacienda): they have been reviewing the valuation of acquired, inherited or donated properties, obtaining a higher value than the real price referred in the correspondant Notary deeds. As a consequence of this new valuation, the Conselleria calculates the amount of the tax to be paid, which is higher than the amount previously paid; and they claim for the difference –plus interests- against the new owner.

The mentioned valuation adjustmentsthat the Conselleria has been making werebased on article 57.1.b) of the Law «Ley General Tributaria» and the Regulation called ORDEN 23/2013, of 20th of December, issued by the Conselleria. Those legal texts refer to the right of the Administration to review valuations just by referring to the valuations (a certain price per square metre) previously published in official registries for tax purposes, applicable to all the properties in a determined area.

But legal circumstances have recently changed in regard to these issues as a consequence of the Decree issued the 28th of October 2015 by the highest Court in Comunidad Valenciana -Tribunal Superior de Justicia de la Comunidad Valenciana (TSJCV)-. This Court has determined that the direct reference to «official prices» is acceptable in certain cases -for example, local taxes known as «IBI» or «Plusvalía»-, but not for other taxes, like the purchase tax (Impuesto de Transmisiones Patrimoniales) or inheritance and donation tax (Impuesto sobre Sucesiones y Donaciones). According to the Decree, the Laws applicable to these taxes require the valuation adjustments made by the tax authority to be personalised and individualized, and valuation reviews made only by reference to the «official prices» are against the Law and, therefore, are not valid for the specified taxes.

This new situation opens the door for appeals of hundreds of purchasers (or heirs, or people who have received a donation) who have received office notifications relating to the referred taxes. Therefore, wehighly recommend to appeal against those tax demands. If the Conselleria refuseda first appeal, we will have the opportunity to appeal again, through an «administrative» Court called Tribunal Económico-Administrativo and, if necessary, through the mentioned TSJCV, which is the highest judicial authority in the region and has already clearly determined this issue.