As the Daily Mail reports, In Spain, as in Britain, the buyer must pay sales tax on a property. This is known as Impuesto de Transmisiones Patrimoniales (ITP). It is paid as a percentage of the value of the house. The exact figure varies depending on what type of property is being bought and where it is in the country.
But since the Spanish property market crashed, the amount of this tax flowing into the Government’s coffers has dwindled.
Now the tax authorities are combing through home sales dating back over the past four years and comparing the declared sales price to what they believe the real value is. If the house’s sale price does not match with the taxman’s own official valuation of the property, the owner is asked to pay the difference in stamp duty.
Nine Dragons Blog
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