Valuation checks and mortgage appraisals: Supreme Court criteria

The determination of the value of transferred real estate constitutes a particularly relevant issue in taxes such as the Property Transfer Tax and Stamp Duty (ITP-AJD) or the Inheritance and Gift Tax. In this context, the tax administration has various mechanisms available to verify whether the value declared by the taxpayer corresponds to the real value of the transferred property.

In this regard, the Spanish Supreme Court has recently ruled on the use of mortgage appraisals as a means of verifying property values, confirming that they may be used by the tax administration when certain circumstances are present.

Judgment No. 55/2026, of 26 January 2026 (appeal 4976/2024) analyses the scope of the verification method provided for in Article 57.1.g) of the General Tax Law, relating to the use of the appraisal of mortgaged properties.

Article 57 of the General Tax Law establishes the different methods that the administration may use to verify the value of assets and rights declared by taxpayers.

Among them is the method provided for in Article 57.1.g), which allows the use of the appraisal of mortgaged properties carried out in accordance with mortgage market regulations.

These appraisals are technical valuations normally carried out by authorised appraisal companies and used by financial institutions to determine the value of the property that serves as collateral in a mortgage transaction.

The Supreme Court confirms that this type of appraisal may constitute a valid means of verifying the declared value, insofar as it is a valuation carried out in accordance with the applicable regulations.

One of the aspects analysed by the Supreme Court in the judgment concerns whether the administration must specifically justify the initiation of a valuation verification procedure.

The Court states that the power to verify values forms part of the ordinary powers of the tax administration, and therefore its exercise does not necessarily require the prior existence of indications of fraud or irregularity.

In particular, the Court considers that the existence of a significant difference between the value declared by the taxpayer and the value resulting from the mortgage appraisal may constitute a sufficient element to justify the initiation of a valuation verification procedure.

The judgment also analyses whether the administration must provide additional justification to identify the mortgage appraisal value with the real value of the transferred property.

The Supreme Court considers that the administration may use such appraisal as a valid reference within the verification procedure, provided that the appraisal:

• has been carried out in accordance with mortgage market regulations
• is duly justified from a technical perspective
• was known to the taxpayer

In such cases, no additional specific justification is required to use the appraisal as a means of verifying the declared value.

However, the taxpayer retains in all cases the right to challenge the administrative valuation through the corresponding review procedures.

The criterion established by the Supreme Court has significant practical relevance in real estate transfer transactions.

In particular, it may affect situations in which the value declared in the transaction is significantly lower than the value stated in the appraisal used to obtain mortgage financing.

In such cases, the administration may consider that there is a sufficient discrepancy to initiate a valuation verification procedure in order to verify whether the taxable base of the tax adequately reflects the value of the transferred property.

The Supreme Court ruling reaffirms the validity of the valuation verification method based on the appraisal of mortgaged properties provided for in Article 57.1.g) of the General Tax Law.

According to this doctrine, the tax administration may use mortgage appraisal as a means of verification when there is a significant difference between the declared value and the appraisal value, without it being necessary to previously demonstrate indications of fraud.

In any event, the taxpayer retains the right to challenge the administrative valuation, both through administrative procedures and before the contentious-administrative courts.