You can indeed declare less than what you purchased for, but you could face problems. The taxman may consider this rather strange as it is the case that properties are being bought for a higher price than the last selling price, and raise a supplementary demand for tax. Also, your capital gains would be inexistent, a situation also strange.
However, the transaction is possible and it is not against the law. Any claim from the tax man for further tax could be contested. Seek legal advice in order to check on the assesed value of the property by the taxman.
Regards
