Over the past few years, property being transferred between private individuals - normally subject to the Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados tax - has given rise to constant conflicts between the Administration and the administrators.
This is because the values declared by the interested parties need to be confirmed and, in the majority of cases, the relevant authority - in this case the regional government - needs to modify the declared purchase price.
Because of the interminable series of appeals against the verifications of the declared value and the paying of the corresponding taxes, there are many administrative and legal opinions about the subject. However, they all agree on one maxim: to protect the interested party.
In view of the various rulings and legal decisions, we can conclude that the verifications of value carried out by the Administration must conform to certain criteria:
Repeated legal doctrine (for example, and amongst the latest, the Supreme Court Rulings of June 18, November 30 and December 23, 1991, January 18, June 20 and July 17, 1992) enforced the need for the professional valuers' reports, which form a base of verification for the Administration, are founded on a reasonable valuation requiring an investigation into the details of the property, such as condition, age, construction, real market prices, urban situation and others. Without this information the valuation becomes null and void.
- A valuation that is limited to consigning an estimated value is not acceptable if it does not contain clear and concise information including the technical methods used to arrive at the valuation.
Therefore, the tax payer can oppose with full knowledge and without being left defenceless, as this constitutes a defect of such importance to determine the invalidity of the opposed administrative act.
The Administration's policy, which is still in force, consists of issuing a new verification of the value following the annulment of the previous unacceptable report.
The Administration can, through the legal ruling of article 49 in the Texto Refundido del Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados tax, proceed to verify the real assets and rights transferred, through the regulations laid down in article 52 of the tax code.
However, the law does not allow for repetition until someone states the correct value, as verification can only take place once and the tax payer can only appeal once.
In order to avoid legal battles and, above all, the heightened conflict regarding the verification of property values, the Ministry of Economy, Tax and Public Administration, following the examples laid down by other autonomous communities, has put another valuation system in to place.
In this way the tax payers can find out beforehand the value that the Administration will classify a property as "verification not a priority".
These valuations are the results of multiplying the rateable value of the property in question by a co-efficient, the price of which depends on the municipality where the property is situated.
Therefore, declaring a value higher than the outcome of this calculation lessens the risk of the autonomous government carrying out a verification of the declared value.
This method is applicable to properties situated in urban areas as well as rural land.
By using the system of multiplying the local registered value by the coefficient considerably reduces the possibility that government inspectors will verify the declared value. However, it does not constitute a method of valuation in itself.
Therefore, in the cases where the value assigned to a property in a sales/purchase transaction between private individuals is less than the figure obtained through the system of applying coefficients, the Administration cannot undertake a verification of value without referring to this method, otherwise this would make the rights of the tax payer vulnerable.

Tomás Ballestero Lawyers, C.C. Arenal - Avda. del Pla, 126-2º, despachos 28A and 28B - Jávea. Tel. 96 579 29 46. e-mail tomasabogados@expertoslegales.com