Some investors buying up property in Spain could trip up over old tax loopholes, according to the National Association of Estate Agents (NAEA).

For years now, Spanish property prices have often been misquoted in order to avoid high tax payments. Commenting on this fact, Ian Tonge, chair of the NAEA International Working group says: "This means that if the local authority wants to purchase the land today, as has been highlighted in recent cases in Valencia, proving how much it is worth can be very difficult."

"Historically, people have been reluctant to put in the full price on their documents because that would force them to pay more tax than the gain they had made on the property," he continues. "If their property is then needed for road widening purposes, for example, they will only receive the governments recorded value on it, and will be unable to prove that they are owed more. Purchasers in Spain must be careful to declare the true value of their property to protect themselves."