What is ‘Complementaria’ Tax (Hidden Tax)?

If you bought a property a few months ago and you have just received another tax bill in the post, then you might be interested to learn more about this.

Firstly, your lawyer might have informed you about the possibility of receiving a “liquidación complementaria” if the value of the property was low for the Tax Office, which we would like to refer to as Hidden Taxes.

When you bought your property, you probably paid 12% of the declared value on taxes, expenses and fees. But, if you bought a property below market value or what the tax assessed value is, you will receive what is known an “Impuestos complementarios” Complementary tax.

When purchasing a property, the Tax Office takes into account the average market value, not the purchase value (you could always find bargains with the Tax on the market value). Due to the many cheap properties that are on the market, the tax agency has been reviewing all the declared taxes and sending “Liquidaciones complementarias”.

Even though you paid either on the sales value, your tax declaration could be reviewed and a letter sent to you to adjust it according to their average value.

You could either work out the transfer tax value calculated by a divisible figure of the “valor catastral”, also known as the cadastral value. Each town hall has different figures.

Once you receive the letter, you may be able to appeal against their valuation and contest it. Otherwise, it will be understood that you accept their valuation.

If you are going to appeal this hidden tax, you must be aware that there is a time limit of 10 natural days in which you must send of all pertinent information about your property to the taxman to argue your case. However, they may not accept this first argument and you may be forced to have your property valued by a surveyor to further fight your case.

For more information and help with this particular issue, we recommend that you contact expert Tax advisors who can assist you.