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ARCHIVED - Brit property owner in Alicante unable to sell due to government over-valuation
The Spanish Catastro doubled the estimated property value, making the taxes due on the plot alone unfeasibly high
Brit Ali Singer bought her three-bed, two-bathroom villa in Alicante back in July 2022, moving with her husband to the Costa Blanca for a new life in the sun.But a small and obscure quirk in the way the Spanish real estate system works meant that Ali’s property was valued at double what it should be worth, leading them to owe more in taxes from the purchase and meaning they lost a buyer when it came time for them to sell.
All Spanish buildings must be registered on the ‘Catastro’, or Cadastral Land Registry, in order to keep track of where they are, how big they are, how much they are worth and other important information.
Put simply, the cadastral value of a property is updated according to the most recent laws in Spain, and tries to bring the actual value of the property in line with its market value. It cannot be more than the price it would fetch on the market.
However, in Ali’s case, the Cadastral office valued her property at double its market price.
“On this basis we are a) being pursued for tax outstanding from our purchase and b) have lost our buyer based on this ongoing tax implication,” she said.
So how could something like this happen?
When Ali and her husband looked to buy the property in the Marina Alta towns of Teulada-Moraira back in July 2022, it was marketed at 470,000 euros, and subsequently reduced to 430,000 euros. This was the property’s first sale since being built in 1975.
There was actually some discrepancy on the actual location of the property, as it said Teulada on the deeds and Moraira on the records of the Catastro. The two localities are unique in that they are actually administered by one Town Hall, but the inconsistent paperwork wasn’t even the biggest problem Ali faced.
“Shortly after committing to buy, we were informed by our lawyer that the Cadastral had placed a value on this property of 1,000,000 euros,” said Ali. “We have been given no logical exposition for this.”
She continues, “To challenge their decision, we had an independent valuation carried out by a qualified surveyor.”
This valuation came in at 618,000 euros, well under the Cadastral estimate. The surveyor also provided the Catastro with multiple comparisons of villas in the area which were similar to Ali’s and which had recently sold for between 450,000 and 650,000 euros.
To proceed with the purchase, Ali and her husband paid tax based on the valuation price of 618,000 euros, but it wasn’t enough for the authorities.
“We are now being ‘pursued’ by the Spanish authorities for the tax they believe is due with the villa being valued by the Cadastral at 1,000,000 euros,” she said.
As if that weren’t bad enough, their attempts to sell the villa for personal reasons have been stymied by this issue.
“My husband recently had a quadruple heart bypass and due to his ill health, we must now sell this property,” said Ali. “We had a buyer agreed at a price of 600,000 euros. However, his lawyer has informed him that the Cadastral have valued the property not at the previous 1,000,000 euros but now 1,200,000. If he were to proceed he would be paying 60,000 euros more tax to the Spanish authorities than the purchase price of the property.
“The buyer has pulled out and we seemingly have a property that with the ludicrous Cadastral value and consequently the tax implications relating to this, we cannot sell for its market value.”
According to Ali, the whole thing is causing her and her husband “significant stress” and has despaired at being unable to sell and unfairly treated. They have contracted the services of a solicitor and secured a face-to-face meeting with people at the Catastro in Alicante and are hopeful that they will be able to explain their case so that it can be resolved satisfactorily.
Ali wanted to warn any British and foreign buyers looking to purchase property in Spain about such issues that can come up, to help other people avoid falling into the same situation she did.
“The more awareness created the better,” she concluded.
Image: Ali Singer
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The Abad Abogados law firm specialises in offering innovative legal solutions to its clients, prioritising quality, satisfaction and success. With offices in central locations in La Zenia in Orihuela Costa, Alicante, as well as in Murcia city and Los Alcázares in the Murcia Region, it is easy for expats and foreign citizens abroad in Spain to access the legal services they need.
The team at Abad can help you with any issues relating to Real Estate and Property law, Taxation, Litigations and Commercial law in Spain. From getting a NIE number in order to 
be able to undertake official paperwork in Spain, to completing your residency and visa requirements, they are there to ease every step of the move to Spain for people wanting to come and live in the country.
They can also handle any resident and non-resident tax declarations in Spain, including property taxes and issues surrounding double taxation across international borders, as well as inheritance tax and wills.
Whether you want to formally register your own business in Spain, take someone to court or face being taken to court yourself for whatever reason, Abad & Associates will be by your side.
Their unqualified successes in helping clients navigate these issues have made Abad Abogados one of the leading firms of Lawyers and Accountants and Tax Advisors in Orihuela Costa and in Alicante province.
