Declared value Deeds

In many operations of purchase - sale property buyer and seller can face dilemma of whether declare in the deeds the exactly or less price of the property.
The buyer pays the seller the agreed price e.g. 300.000 and they decide to declare 200.000 on the title deeds. They want to reduce transfer costs paying less Transfer Tax, Notary's fees and Land Registry Fees and Capital Gain Tax.
If the transfer costs of buying a property in Spain suppose, approximately, 10 % of the value, in the example showed previously the buyer will have saved himself only 1.000 Euros (They declare 200.000 Euros instead of 300.000 Euros).

ADVANTAGES AND DISADVANTAGES

A priori, the general idea is that less money declares better for the buyer and for the seller, but it depends according for whom.
From the seller perspective all seems advantages, the less declare the less Capital Gain Tax but it is not all good from the buyer point of view because when in the future he wants to sell the property he has to pay more Capital Gain Tax

Suppose that the buyer buys the property for 300.000 but only 200.000 appear in the deeds. If in a year´s time he sells the property for 350.000, he is going to have a profit of 50.000, but by the Spanish Exchequer will be consider 150.000 Euros.

It is necessary to indicate that the Spanish HM Revenue & Customs has controls against the fraud. If they caught you they will fine you.

Spanish Treasury has a few tables that they determine which is the price of sale of a good, in such a way that if one declares less, they apply the mentioned tables.