Contrato de Rescisión de Compraventa

[Anonymous]

I am posting this in a new thread under this topic because it has become buried in the original thread and I really would like, if not a definitive answer, at least an opinion.

"Yes, people think of an 'escritura' as a title deed but it refers to any written document, legal or otherwise, but going back to the original question of the rescission of the contract I finally found what I was looking for which is a copy of a contract signed by a friend who was involved in a similar situation a few years ago but he was the original prospective purchaser of a yet-to-be-built off-plan property having signed a contract of purchase/sale in the normal way.

He was a non-resident and signed a contract with the promoter rescinding his right to the property by way of private contract. He and the promoter were the only two people mentioned in the contract and I don't think a third party had even been involved at the time bearing in mind that it was at a time when foreigners were snapping up every piece of real estate they could find.

Without going into the antecedents etc these were the conditions of the contract:

PRIMERA.- Objeto.- Ambas partes RESCINDEN DE MUTUO ACUERDO EL CONTRATO DE COMPRAVENTA firmado con la PROMOTORA el día --- de --- de dos mil---- referido a las FINCAS descritas en el Expositivo II del presente Contrato.

SEGUNDA.- La PROMOTORA devuelve en este acto la cantidad anticipada de ----- EUROS ( -----euros) IVA incluido.

TERCERA.- El presente contrato tiene plenos efectos desde el momento de la firma del mismo lo que conllevará automáticamente la puesta a disposición de la PROMOTORA de la vivienda vendida, para su comercialización de nuevo.

There was no mention of 7% tax or of going before a notary, in fact, how could 7% ITP be paid on a property that hadn't even been built yet? My friend signed a receipt for the return of his deposit and that was it. This was a private CONTRATO DE RESCISIÓN DE COMPRAVENTA but, if tax was payable, upon what should the tax have been based and by whom should it have been paid?

This makes a nonsense of the situation in which the original poster, livinginalhaurin, finds himself of having to pay two lots of 7% tax on the same purchase. There must be a scam in there somewhere but I'm damned if I can see it or who benefits from it other that AEAT apart from the fact that the first prospective purchaser has managed to extract himself from the requirement to proceed with the purchase of a property that he decided he didn't really want and avoided paying IVA because he didn't go through with the purchase from the promoter. If he had done so livinginalhaurin would have purchased from him not the promoter and would only have paid the 7% transfer tax on the purchase in the normal way."

[julian]

if out of all that your question is
"This was a private CONTRATO DE RESCISIÓN DE COMPRAVENTA but, if tax was payable, upon what should the tax have been based and by whom should it have been paid?"

then my opinion , for what it´s worth, is that no tax should be paid on this contract.

[Beachcomber]

That's exactly what happened. No tax was paid. I am aware that the post is somewhat convoluted but I wanted to contrast this scenario with that described by livinginalhaurin in his first post of the original thread.

[julian]

to be honest I´m trying to avoid going back and looking at the first post as we seem to have already had our monies worth over this topic, and just the thought of starting again brings back my nervious twitch !!

[Beachcomber]

Yes, I agree, but I would like to think that our exchanges have given some food for thought to livinginalhaurin with whom I have some considerable sympathy. If I were he I wouldn't be about to let the conniving lawyer who, so-say, represented him off the hook lightly.

Perhaps we could wait to see if Mr Searl has anything further to contribute.

[julian]

looks like Mr.Searl gets weekends off !!

[DavidSearl]

FROM DAVID SEARL

FOR JULIAN AND BEACHCOMBER

Damn right I take the week-ends off. Julian, thank you for your suggestion of the new thread. I responded to the original one too soon, so I shall put it in here, too.

The Value Added Tax is charged on the full amount of the sale stated in the contract. Which contract we have not seen. The Junta tax agency, as noted in the original post, revalued this upward.

Best Regards, David Searl

[Beachcomber]

I hope you don't mind that I am copying your reply from the other thread to this one, which I started in the hope of avoiding confusion, in order to avoid said confusion and to make it easier to refer to when replying:

FROM DAVID SEARL

FOR BEACHCOMBER

Good Post with your copy of the rescision contract. It is always basic to see the documents.

Please note that the contract states that the sum paid to the promoter has been returned, with IVA included. So there is a reference to tax.

You and I suspect that this tax was never paid of course and no government agency ever knew that this piece of paper existed. Or the original purchase contract either. But the parties attempted to protect themselves by this reference. (Not to mention that the developer probably paid the first off-plan buyer a nice profit, in cash, as well).

You ask who benefits from having the IVA declared and paid on the first contract from livinginalhaurin. The developer benefits because he has collected the tax from the first buyer and paid it, thus acting legally. A situation could arise where the first buyer wants to act against the developer and uses his original contract as evidence. The developer then presents the IVA payment and says it was all done legally.

Because these off-plan deals have become a subject for closer scrutiny by the tax agency, developers now tend to do this.

The tax, either ITP between private parties, or IVA when bought from a developer, becomes due on the contract itself, not the actual property. If the developer fails to deliver what he has promised, this is then another issue.

NOTE: In my capacity as Moderator I observe that perhaps a general discussion of Spanish property should be the subject of a new threat rather than rattling on here. The same goes for the hooraw's nest into which the "Raffle off my house" thread has turned.

Best Regards, David Searl

I know there is a reference to IVA but I was referring to the payment of some kind of tax on the refund for the rescission of the contract as had to be paid by livinginalhaurin in his particular case. My friend certainly didn't pay any neither has there been any suggestion that he should either then or now but I presume this is because in livinginalhaurin's case the promoter insisted on the contract being signed before the notary.

However, if the promoter in livinginalhaurin's case paid IVA to AEAT at the time of the contract in respect of the first purchaser this means that AEAT has received three lots of IVA/ITP in respect of the same property purchase (one by the promoter and two by livinginalhaurin).

Perhaps I am being thick but I just can't get my head around this.

I would suggest that, rather that trying to make rhyme or reason out of the situation, it is best to avoid purchasing an off-plan property that involves a rescission of a previous contract. Of course, livinginalhaurin's lawyer failed abysmally in his duty to his client not only by neglecting to inform him of the full implications of entering into a transaction of this kind, but by apparently fraudulently agreeing with the first purchaser (after livinginalhaurin's insistence that he was not going to pay tax twice) to include the tax content in the overall price without livinginalhaurin's knowledge thereby resulting in a complementary payment being sought by AEAT for under-declaration. It begs the question 'in whose interest was the lawyer acting?'

...and we wonder why the property market has caved in!!!

By the way, is this what we might call a 'Freudian slip'?

...NOTE: In my capacity as Moderator I observe that perhaps a general discussion of Spanish property should be the subject of a new threat...

[DavidSearl]

FROM DAVID SEARL
TO BEACHCOMBER ET AL

Thank you, Beachcomber, for copying my other response into this thread that is what I threadened to do in that same post, but never did it. Yes, I guess "threat" for "thread" must be a Freudian slip, as the other thread was getting quite threatening.

And thanks again for the new thread.

Now, I wish I knew how to draw a diagram on this forum. I am sure there is a way. It would help a lot. One of my favourite lawyers always draws them and they are easier to grasp than the words.

1. Livinginalhaurin did not pay three lots of IVA. He paid two lots, one of them in two instalments. The one he paid in two instalments was the IVA due on the original off-plan purchase that he did not even make.

2. The original off-plan buyer, by rights, should have paid this. He didn't, and he also underdeclared the sale, so the Junta tax agency came back on him for the rest, which was charged to livinginalhaurin. Then livinginalhaurin paid IVA on his own purchase from the developer.

3. The rescision contract paid no IVA because the off-plan "sale" was annulled and the money returned.

I hope this helps. The other posts are all quite correct, and I agree that livinginalhaurin was treated shabbily by his lawyer. Yet, as you say, it gets convoluted, and if the lawyer turns his back for a moment, he finds that his client faces an unexpected problem. We need not postulate evil intentions for this to happen.

Bring on the new threats, I say.

Best Regards, David Searl

[Beachcomber]

...1. Livinginalhaurin did not pay three lots of IVA. He paid two lots, one of them in two instalments. The one he paid in two instalments was the IVA due on the original off-plan purchase that he did not even make....

No, I said, that livinginalhaurin had paid twice and the promoter once if, indeed, he paid the IVA on the first contract to AEAT:

...However, if the promoter in livinginalhaurin's case paid IVA to AEAT at the time of the contract in respect of the first purchaser this means that AEAT has received three lots of IVA/ITP in respect of the same property purchase (one by the promoter and two by livinginalhaurin)...

as you suggested:

... The developer benefits because he has collected the tax from the first buyer and paid it, thus acting legally. A situation could arise where the first buyer wants to act against the developer and uses his original contract as evidence. The developer then presents the IVA payment and says it was all done legally...

Perhaps we should just follow your lead and give the lawyer the benefit of the doubt by accepting that this ludicrous situation was brought about by sheer incompetence rather than through any deliberate skulduggery! In any event he should be brought to book but, as we said before, persuading a fellow member of his 'profession' to take the case with a genuine intent to see it through to its conclusion would be pretty much impossible and to livinginalhaurin - noli illegitimi carborundum.