When the costs involved in the purchase of a property are added up, it becomes obvious that it is a fairly significant number. This means there are some people who look for ways to falsify the purchase price in order to pay less tax and save costs in the transaction.
However, this practice, which is not so unusual in our country, can entail tax risks for both the seller and buyer.
At WeRelocate BCN we explain the consequences of deeding a property at a lower value.
The objective of deeding a property for a value lower than its official price is an illegitimate, although common practice, made in order to avoid paying taxes. This could nevertheless have repercussions for both parties:
On the part of the buyer, even if at first
they save part of the Transfer Tax and Stamp Duty, they run the risk that the Treasury will carry out a value check that cannot be justified. This would mean having to pay the corresponding tax, together with interest for late payment, and depending on the seriousness of the transaction they could face a tax penalty. If you also decide to sell the property at a later date, as you obtain a higher capital gain, you will have to pay a higher percentage of personal income tax.
On the seller’s side, s/he benefits both in the payment of the IRPF and the municipal capital gain, and although the risk is lower, if the Treasury decides to check the declared value, s/he would have to make a complementary declaration in the IRPF.
Although this practice is relatively frequent due to the supposed advantages it entails, in truth is both buyer and seller risk many disadvantages, above all because the savings that can be made will not compensate for everything that needs to be paid later, in the event that the Treasury carries out the appropriate checks.