In the Valencian Community, second-hand house purchases are taxed at 10%.
Accordingly, the buyers pay 10% tax on top of the purchase price (for instance in a purchase of 100.000 euros, the buyers need to pay 10.000 euros tax).
The Valencia tax agency has a period of four years from the date of purchase to review the purchase price.
On many occasions in the last few years, the tax agency has requested extra tax from the buyers, arguing that the purchase price was too low, and purchase taxes paid on it should have been higher.
That led to many court cases from buyers, who have disputed the tax agency review.
The courts have ruled very often in favour of the buyers, as the tax agency did not have a survey of the house made, but simply decided to give a value to the house, out of random formulas, which did not correspond to reality.
As a consequence of the Court rulings, the Valencian tax agency has now changed the system. The minimum house price value for tax purposes is now fixed, using a formula dependant on the house "catastro" value, which differs in every town.
If the price is above the "minimum taxable price" the buyer pays 10% tax of the purchase price.
But, if the "minimum taxable price" is higher than the real price, the buyers will have to pay 10% tax on that "minimum taxable price".
For instance, if the real purchase price was 100.000 euros, and the "minimum taxable price" was 120.000 euros, the tax to pay by the buyers would be 12.000 euros.
The buyers would pay 10% tax on the real price on completion (10.000 euros), but some months after the purchase, the tax agency would request the extra taxes (2.000 euros).
So, even though house prices are free and subject to agreement between the buyer and the seller, for tax purposes there are minimum values to calculate the purchase tax, which has to be paid by the buyers.
Accordingly, before you buy a house in the Valencia region, your lawyer should check if the price is above the minimum taxable price, that way you will avoid unexpected extra taxes