Property Valuation, worth contesting?

[peejay]

as a recent arrival (property purchased Dec 2010 Ahaurin el Grande) we have had a valuation of the property which is some 65,000 euro above the actual price paid and a demand for a significant payment.
As a simple man this seems almost illegal under any common european law but this is Spain. The law firm used for the initial purchase say it will be a long and expensive process to appeal this decision. Does anyone out there have experience of such issues and the likely time and costs involved?

Peejay

[Beachcomber]

Take the valor catastral of the property (found on the IBI receipt) and multiply it by the municipal coefficient which for Alhaurín el Grande is 4,0. If the result is less than the amount of the valuation it is worth appealing against it. If not, don't bother.

When I appealed a re-valuation it took about seven months to get a decision in my favour. However, this was several years ago and I did it myself so had no inflated lawyer's fees.

[spanish_lad]

while you will have to pay more ibi, remember that the house will be worth that much more when you sell it.

[katy]

while you will have to pay more ibi, remember that the house will be worth that much more when you sell it.

[Jool]

It is happening a lot at the moment as the Tax Office use their valuations often based on times when prices were a lot higher.......you won´t beat Beachcomber´s advice and don´t take it personally, for the Mojacar area on Costa Almeria nearly all properties sold are getting these "real" valuations from the spanish tax man.....at least there will be no fine as well for deliberately under declaring!!!

[bkeo1]

Yep happened to me too!!! Bought in 2008 (Oct) got a bargain (as you would expect at that time). Paid the tax on it when the purchase went through (taxed at the price we paid). However, after the sale the Tax Man came back for more!!! They valued it at the "Market Value" way more than we paid!! Wasn't a happy camper as you can imagine. Got my Solicitor on to it and he told me that it would take so long and cost more than just paying it!!! Good luck with that one!!

[peejay]

thanks to all for valuable advice. Helped me make up my mind to swallow the pain!

[spanish_lad]

well thats the theory anyways

[OPTIMISTIC]

As someone hoping to buy in the Andalucia area soon, this thread came as a bit of a shock. What exactly is IBI? Can you give an indication of the rate of the extra tax chargeable on, say, the 65,000 Euro re-evaluation figure mentioned by the OP?

Sorry to be so ignorant, but I'm in the preliminary stages of property purchase in Spain (still just looking) and don't want to be caught out by unknown anomalies where I can avoid it.

[annfoto]

IBI = Rates
Transfer tax (IVA) on buying a second hand property is 6%, 7% on a new property.
I can recommend getting hold of a copy of "You and the Law in Spain" by David Searle

[Beachcomber]

Transfer tax is not IVA. Transfer tax (Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos) is paid on a resale property and IVA on a new property. Transfer tax is 7% up to a property value of €400.000 and 8% thereafter. It hasn't been 6% for several years.

This is the problem with buying books on property purchase in Spain. They soon become outdated.

By the way, there is now a fast-track procedure for contesting AEAT property valuations that does not require the use of a lawyer or asesor fiscal.

[markwilding]

You can't always blame the Spanish goverment for everything. A lot of people try to avoid paying some taxes by asking for some of the payment in cash.
So although the house might have been officially sold for a lower amount, the real purchase price was higher.

[peteroldracer]

As someone hoping to buy in the Andalucia area soon....

Buying a property in Andalucia before there are significant and substantial changes in lots of legislation, and the establishment of a compulsory organisation that will prosecute all and any abogados and notaries that do not guarantee that any property they do the legal work for is totally legal, and that all taxes have been paid (with a massive compensation fund for those ripped off!) must be a real gambler.
Rent something.

[peejay]

Optimistic,
I read a couple of books on moving to Spain and knew tax was payable on the purchase price. Beware that estate agents and lawyers may well not bother to tell you that the taxable value bears no relation to the market value of the property. I beleive the days of 'black' money and cash payments are over, but this taxable value is still an issue. The extra 'unexpected' tax was made up of shortfall of tax paid on the real purchase price and beachcomers calculation. A little more infuriating is the penalty of approx 1,000 euro for late payment!
I am now hoping to appeal the taxable value directly.
Good luck on the move, so far the benfits outweigh the negatives!

[Bowler]

IBI = Rates
Transfer tax (IVA) on buying a second hand property is 6%, 7% on a new property.
I can recommend getting hold of a copy of "You and the Law in Spain" by David Searle

And I can recommend YOU do the same