The Spain’s Supreme Court recently ruled in favor of the Spanish Tax Agency, declaring that it can require those who purchase a home with a mortgage to pay Property Transfer Tax (ITP) based on the mortgage appraisal value instead of the purchase price, when the appraisal value is higher than the purchase price (as established in three rulings issued between February 9 and 10, 2026, in addition to three others from December 2024).
The Tax Agency considers that if a bank has appraised the property at a value higher than the purchase price, that appraisal value is a clear indication of the property’s “real value.”
Thus, the Supreme Court establishes that the Tax Agency may officially verify the real value of the property in question when the difference between the price declared by the buyer and the one set by the mortgage appraisal is “relevant”, and may even demand the difference through a supplementary settlement.
In case of disagreement, the taxpayer may challenge the tax authority’s valuation through a contradictory expert appraisal to demonstrate that the real value of the property is that of the sale.
Another aspect to consider is that, since January 2022, in many cases the minimum taxable base is set by the reference value of the Cadastre, using the higher of:
-
-
- Reference value of the Cadastre
- Value declared in the sale
- Real value of the property
-
However, the General Office of the Cadastre does not always provide a reference value, so in many transactions and factual situations (such as inheritances and donations), the mortgage appraisal is reaffirmed as a solid and truthful mechanism to discuss the declared value.
