The valuation methods based on indexes after the Supreme Court judgements of 23 May 2018

Abstract

The method for determining the fiscal value of immovable property that consists in applying legally established coefficients on their cadastral value, which has its basis in Article 57.1, b) of the General Tax Law, has been generally adopted and developed by the Autonomous Communities for assessing the base of the Transfer Tax and the Inheritance and Gift Tax. However, such valuation method was not pacifically accepted by both the commentators and the courts, with the argument that its outcome differs from the "real value" of the property, which is the tax base. This argument was rejected by the Supreme Court in two judgements of 6 April 2017. A change in the composition of the second division of the Administrative Chamber of the Court permitted the new majority to seize the opportunity to overturn the previous doctrine and eliminate in fact the coefficients method. The present article examines
critically the Supreme Court judgements of 23 May 2018, which performed this shift in case law, and describe the foreseen legislative measures to remedy the situation created by it.