The High Court of Justice of Andalusia has admitted for consideration the regional appeal in cassation for infringement of rules issued by the Autonomous Community of Andalusia and will rule on whether the reduced 3.5% rate of Transfer Tax (TPO) provided for the purchase of a main residence by persons under 35 applies when, there being more than one purchaser of the property, the real value of the part of the home acquired by each of them is below the threshold of €150,000 set out in the regulations (previously €130,000) even though the total value of the home does exceed that threshold.
Controversy over the application of the reduced 3.5% Transfer Tax rate in Andalusia
The controversial issue originates in the application of the reduced Transfer Tax rate intended to promote a social housing policy. Thus, the wording of the article, which has undergone slight changes over the years since it was first approved in 2003, establishes a Transfer Tax rate of 3.5% for home purchases provided that:
- The use of the home is as a main residence.
- That the purchasers are under 35 years of age (in the case of marriage or civil partnership, it is sufficient for one of them to meet the requirement).
- And that the real value of the home does not exceed €150,000 (or €130,000 before 27/10/2021, when the threshold was raised).
The wording, apparently uncontroversial, gave rise to widespread controversy when there were several purchasers, in cases where the total real value of the home exceeded €130,000 (or €150,000 currently), but the value acquired by each of the buyers did not exceed that threshold: should the reduced rate apply or not, given that each taxpayer filed their tax separately, declaring a tax base below that threshold?
Let us imagine the example of a married couple or civil partners, one of whom is under 35, who acquire their first main residence 50% each, for a total price of €220,000. The total amount of the home would prevent them from applying the reduced 3.5% Transfer Tax rate, and they would have to pay tax at the general rate of 7% in Andalusia.
However, if we consider that each of the two purchasers only acquires a percentage of the home for a total of €110,000 (50% of the €220,000 price), then they could apply the reduced 3.5% rate.
Different criteria between the Chambers of the High Court of Justice of Andalusia – Admission of the regional appeal in cassation
Well, the issue turned out to be anything but uncontroversial, and discrepancies arose between the rulings of the Contentious-Administrative Chambers of Málaga and Seville of the High Court of Justice of Andalusia, which favoured considering the total value of the home, regardless of the number of purchasers and the percentage acquired, and the Contentious-Administrative Chamber of Granada of the same Court, which held that the part actually acquired by each individual should be analysed to calculate the limit, insofar as this interpretation was more in line with the guiding principles of social and economic policy such as access to housing, the protection of young people and the protection of the family set out in the Spanish Constitution.
The regional appeal in cassation has been admitted for consideration in the Order no. 33/2025 of 22 July 2025, filed under the legal direction of the MERAC Legal team, precisely because of the existing discrepancy between the different Chambers of the High Court of Andalusia and because the cassation issue affects a large number of taxpayers and causes widespread legal uncertainty.
Thus, the Order of admission acknowledges the existence of a discrepancy:
"The appeal in cassation, in view of the existence of conflicting legal criteria between the Seville Chamber and those of the judicial capital and Málaga, must be admitted in accordance with article 88.1.a) of the LJCA, since the judgment under appeal sets, in substantially identical matters, an interpretation of the regional rules on which the ruling is based that contradicts the one established by other courts."
And it concludes that the appeal in cassation will concern:
"The issue on which the appeal in cassation will focus will therefore be the interpretation of article 24 of Regional Legislative Decree 1/2009, concerning the tax benefit in the Transfer Tax and Stamp Duty, Onerous Property Transfers modality, consisting of the application of a reduced rate of 3.5% on transfers of real estate whose real value does not exceed 130,000 euros, when used as the purchaser's main residence and the purchaser is under 35 years of age.
In particular, it will address how the 130,000-euro limit should be interpreted, i.e. whether the value of the property should be computed regardless of the percentage or share acquired, or whether only the percentage or share acquired should be taken into account in determining whether the amount of 130,000 euros is exceeded, regardless of the total value of the property."
Legal interpretation of the reduced 3.5% Transfer Tax rate
In our opinion, turning to the case under appeal, and insofar as the General Tax Law itself establishes that tax rules must be interpreted in accordance with article 3.1 of the Civil Code, an interpretation must be sought of the regulation of the reduced Transfer Tax rate that is consistent with the context, the historical and legislative background and the social reality of the time in which they are to be applied, based fundamentally on the spirit and purpose of the rule.
If we look at the current housing crisis, the difficulty young people face in accessing housing and the spirit of the rule when it was approved, which was none other than to "extend tax benefits to as many Andalusian citizens as possible, paying special attention to those with the lowest economic capacity", the rule should be interpreted by considering the real value of the percentage of the home actually acquired by each taxpayer, which is, after all, the amount that reflects that person's real purchasing power.
All this without forgetting that, given the exponential rise in house prices in recent years, there would be no real practical application of the reduced 3.5% Transfer Tax rate for home purchases by young people under 35 in the vast majority of Andalusian municipalities.
Potential impact of the future cassation doctrine: tax refunds?
If cassation doctrine is established in the direction indicated, a large number of Andalusian taxpayers could benefit from the reduced rate who, being in similar situations, have been forced to pay the general Transfer Tax rate of 7% that the Andalusian Regional Government has been demanding in these cases.
Provided that 4 years have not passed since the taxable event accrued and it is not time-barred, the taxpayer could initiate a procedure for the refund of undue payments.
However, we must wait for the High Court of Justice of Andalusia to establish cassation doctrine to know its criterion and, if it is favourable to taxpayers' interests, initiate a procedure for the Andalusian Regional Government to refund the taxes overpaid.
If you think you could benefit from the reduced 3.5% rate or claim back what you overpaid, we can review your case — book an appointment with our team of lawyers in Málaga
