Property Sale lawyers fees

[samizdat]

its based on the castral value as decided by the TOWN HALL at the time of sale.!!

So if you sell a house for 400,000E but the town hall thinks its worth 500,000E at the time of the sale they will levy an additional tax which I think is 7% of the 100,000 difference. They dont care if you have been paying tax on a castral value of 350,00E for last few years. As with all things spanish I think they have a couple of years to review this situation and come after you.!!! I think Katy probably has the actual figures as its quite a hot potato around Marbella.

The price on the escritura is irrelevant to the town hall, mainly due to the number of under-declarations of our spanish friends, and also due to the downturn in construction and resales, so town hall coffers are empty. I suspect this "law" has always been in place??? but its only in last year that town halls are enforcing it.

As with all things spanish - buyer/seller beware...

[hillybilly]

Hello Samizdat! Where have you been hiding?!

[samizdat]

hilly

ran out of cute rockers in Granada to terrorise on my motorbike...

oh hang on - that was you

Sold up in Granada (hurrah a buyer) and now back in Uk as its crap on coast - La Zagaleta beautiful but a construction site full of land slips ...

[julian]

"its based on the castral value as decided by the TOWN HALL at the time of sale.!!"
what is "it" ??the retention?
I think we are confusing the 3% retencion (from the seller) with the ITP that the buyer pays

[Anonymous]

The retention is made by the purchaser and paid by the purchaser to the tax office on form 211 within one month of the sale. It is 3% of the value shown in the escritura with the minimum value being calculated by applying the municipal multiplier to the valor catastral. If the amount shown in the escritura is less than this calculation AEAT will apply a supplementary payment to the 7% transfer tax paid by the purchaser. Theoretically it could also challenge the figure in the Capital Gains Tax declaration. The notary does not hold the retention and will NOT 'send it back to you'

The purchaser must give a copy of the form 211, bearing the bank endorsement showing that the payment has been made, to the vendor who then has three months from the date of payment of the retention to the tax office to submit a Capital Gains Tax declaration on form 212. Expenses on original purchase can be added to the purchase price and expenses on sale can be deducted from the sale price including the agent's fee as long as you have a properly receipted invoice. A coefficient is also applied to the purchase price according to the year of purchase. This is all quite straightforward but gets a little complicated if the original purchase was prior to 1996.

The bottom line may be either that you have to pay more tax if the 3% doesn't cover the amount of Capital Gains Tax payable or you will be entitled to a refund of some or all of the retention. In this case you will need to leave your Spanish bank account open until the refund is made. Once you have completed the form 212 you have to take it to your bank to be stamped to confirm that the account number given into which the refund is to be paid is correct. Even now some banks are not familiar with this procedure and you may have to persist. You then have to take the completed form to the tax office and present it with the receipts against which you are claiming the expenses.

In order for the refund to be made you must have been paying non-resident taxes for at least the past four years. In some cases they may also ask for a pro rata declaration for the current year even though, theoretically, this is not due until the 31st December of the current year.

The refund should be made within six months. If it goes over that time you will be entitled to interest as long as any delay has not been caused by time taken to clarify any mistake which may have been made by you in the completion of the declaration.

[avellana]

Welcome back Beachcomber!

[pigs-might-fly]

OTH, if you are FISCALLY resident - i.e. you have a certificate from Hacienda to this effect (resident & submitting an ordinary Spanish tax return, not the one for non-residents) the retention is not made.
Additionally, if you are over 65 years of age, are fiscally resident and have lived in your Spanish property as your one and only home, for more than three years, no CGT is due at all.
In spite of this latter point, if you qualify, you MUST have the fiscal residency certificate from Hacienda, or the 3% WILL be held back even though no tax is due!
Fort those of you on very modest incomes, who live here full time and are pensioners it's well worth while submitting a proper normal Spanish tax return to obtain the certificate.
We did so and actually received a very small tax refund as a bonus!

[Jool]

Hi Beach, good to hear from you but in this quote below shouldn´t it be the other way around - purchaser gives to seller? Then seller does CGT declaration on form 212?

The seller must give a copy of the form 211, bearing the bank endorsement showing that the payment has been made, to the purchaser who then has three months from the date of payment of the retention to the tax office to submit a Capital Gains Tax declaration on form 212.

[Beachcomber]

Yes, it should. I have edited my post to correct this.

[samizdat]

"its based on the castral value as decided by the TOWN HALL at the time of sale.!!"
what is "it" ??the retention?
I think we are confusing the 3% retencion (from the seller) with the ITP that the buyer pays

sorry was replying to a previous post about this issue . But it didnt quote the original post with my answer. No I'm not talking about the 3% retention on selling.

[muneca]

In terms of showing there are no liabilities on the property, what do we need to take to the gestor on the day of completion? All my bills are paid by direct debit - i dont seem to have all recent bills with me:( will it suffice to take bank statements showing payments made to the various utilities?

Also, im understanding the buyer needs to give me the receipt for CGT on Form 211- is that on the day of completion?

[Anonymous]

The purchaser has one month in which to pay the retention to the tax office. The fact that the retention has been made will be written into the escritura but you will not be able to have the receipted form 211 until it is paid to AEAT (as I said, within one month of the sale).

You will need to produce utility bills and IBI receipts. Bank statements will not suffice.

[Jool]

Muneca - just what is your Agent doing for their fee?

I am not being rude but you come across as rather muddled and trying to deal with things you are not sure about

On completion day the Notary will obtain a Nota simple which should show there are no debts on the property, if there are you will not be able to sell that day unless it is a mortgage that will be cancelled, in which case the bank´s representative should be there to do this and the buyer will need to allocate out funds accordingly, all via bankers cheques. This needs to be organised in advance. you also need to prove that all bills are up to date, IBI receipt for last year plus a facility for paying IBI for this year (your responsibility as you owned the property on January 1st), basura paid, elec and water up to date. Certificate from the community for comm fees up to date (normally they charge for this!) ......

You pay the CGT as seller, the buyer needs to prove they have paid the retention tax within one month........but also you need to pay the plus valia at the town hall within 2 months however I must reiterate that your Agent should be doing all of this for you and advising you of this and getting the relevant forms for you......

[julian]

you should take the proof of payment of the last electric and water bill, and receipts showing IBI , basura, and community fees paid(by certificate from the community administrator).

I think the agent is charging for introducing a buyer to the seller, for a preumably pre-agreed 5%

[Beachcomber]

If the purchaser is using a half decent representative he will want to check for himself that there are no bills outstanding for utilities. Proof of payment of the most recent bill is no guarantee that there are no previous bills outstanding. He would need the actual bills for reference when contacting the utility services for this information.

[julian]

the purchaser is not using a solicitor.

[muneca]

the estate agent's fee is for finding the buyer. thats the way it works here - they do not need to be assisting me and of course they want to pass me on to a lawyer who will charge 1-1500 euro.

all bills are paid - but i dont seem to have the current utility bills . im wondering if the buyer will acept bank reciepts showing payments are made to all utilities. i do have the IBI and basura bills but they dont say paid- the bills are all paid via the bank direct debit. they buyer is not using a lawyer either.

[julian]

you could go with the buyer before the purcahse date to the patronato office in the centre of marbella to confirm that there are no outstanding debts of IBI or basura.

I would give him as soon as possible a copy of an old electric and water bill and tell him to check for himself that nothing is outstanding.it´s in his own interest to check it out.

ask the community president for a certificate that the community bills are up to date.

[Jool]

I am "here" in Andalucia too and all the Agents over this way offer these services for free on top of the 3 to 5% commission they charge, 5% for introducing buyer to seller whilst giving seller no advice or support seems a real rip off to me. Tell them to do this or you bail out......they will want the sale as much as you I am sure......and an explanation of the process is free and hardly time consuming...

[julian]

if Muneca has agreed a 5% introductory fee, and is happy with it, why should he now change the agreement? anyway, legally, even if he pulls out of the sale now he is still liable to pay the introductory fee.