New tax on properties sold "under value"

Information and questions about the Law in Spain and Andalucia.
pdabrown
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New tax on properties sold "under value"

Postby pdabrown » Wed Nov 19, 2014 4:29 pm

Hi All,

I have heard that there will be a tax levied on the "full value" of a property when the authorities deem that it has been sold "under value".

Does anyone know about this and how it will be administered?

Thanks

Paul

katy
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Re: New tax on properties sold "under value"

Postby katy » Wed Nov 19, 2014 4:39 pm

Unfortunately it has always happened. We were stung when we bought in the 90,s recession. System has improved now, your Lawyer can give you the amount due before the sale. We just had the bill out of the blue about 6 months after purchasing.

infoseeker
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Re: New tax on properties sold "under value"

Postby infoseeker » Wed Nov 19, 2014 4:59 pm

I understand that this " complementary tax" not "complImentary" as some mistakenly think, can be avoided if the solicitor checks with the Hacienda which value will be accepted.
Unfortunately the Hacienda has not updated its list of house values to accommodate the fact that the value of most properties has plummeted.
The blame for this unwelcome tax demand lies which people from years ago, who did an under the table job with brown envelopes, stating a lower value, to reduce taxes paid by buyer and seller.
It was rife, and illegal, but notaries turned a blind eye to it.
Now, properties are really at a low price , but the Hacienda still thinks it's a tax dodge, or pretends to so that they can send out these demands, which can be appealed against, within a time frame.
I hate the fact that some solicitors advise clients to just put up with it and put money aside to pay it, instead of fighting this unjust tax demand.
If a buyer asks me to do this, as it still goes on, I would refuse.

Beachcomber
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Re: New tax on properties sold "under value"

Postby Beachcomber » Wed Nov 19, 2014 5:58 pm

The fiscal value of a property is calculated by applying a municipal multiplier to the valor catastral.

If the purchaser completes the form 600 online for the payment of transfer taxes and the amount declared is less than the fiscal value there will be a pop-up message warning of the consequences of having done so.

It is a no-win situation because if the purchase value is lower than the fiscal value there will be a claim for the tax on the difference by the authorities and if you declare the full fiscal value on the form 600 even though the actual sale price was less there is a prima facie case of making a false declaration in a public document.
Let's go Brandon!

gus-lopez
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Location: Lorca, Murcia ,Spain

Re: New tax on properties sold "under value"

Postby gus-lopez » Thu Nov 20, 2014 10:11 am

There own rules state that the VC cannot be more than the market value.
" El valor catastral no puede superar el valor de mercado, entendiendo por tal el precio más probable por el cual podría venderse, entre partes independientes, un inmueble libre de cargas, a cuyo efecto se fija, mediante orden ministerial, el coeficiente de referencia al mercado para los bienes de una misma clase."

Read more: http://elcatastro.blogspot.com/2011/03/ ... z3Jb95qXIv
Todos somos Lorca.

Beachcomber
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Re: New tax on properties sold "under value"

Postby Beachcomber » Thu Nov 20, 2014 10:49 am

This may be so but the fiscal value is determined by applying the municipal multiplier to the valor catastral which can be anything from 1,2 to 4 depending upon the date of the last revision.

The figure may be appealed but the first appeal is routinely rejected by AEAT and it is then necessary to involve an assessor in order to establish the market value which takes time and money during which the sale may be lost or the fees and expenses may outweigh the saving made on the tax payable.
Let's go Brandon!

katy
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Re: New tax on properties sold "under value"

Postby katy » Thu Nov 20, 2014 12:08 pm

The Lawyers who advise you to put up with it are the honest ones as they charge a packet to handle the appeal.

Beachcomber
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Re: New tax on properties sold "under value"

Postby Beachcomber » Thu Nov 20, 2014 2:54 pm

That was going to be my next point. It is difficult enough for a native Spaniard to go through the process without legal help and virtually impossible for a non-Spanish speaking foreigner.

AEAT uses the same strategy for avoiding the repayment of the 3% retention withheld from non-residents on the sale of the property. They will hope that the claimant will not bother to chase up the repayment as, depending on the amount due, it can cost equally as much to employ a lawyer to appeal it.

If challenged over the non-payment they will state that a non-resident tax return for a certain year is missing necessitating a visit to the tax office in order to produce the receipted copy or that there is a mistake in the form which has to be corrected. This process is a little easier for a foreigner but is not without its complications.
Let's go Brandon!

Miro
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Re: New tax on properties sold "under value"

Postby Miro » Thu Nov 20, 2014 3:37 pm

I sold a trastero a couple of years ago for €3,500 which was a fair "market" value at the time. The Valor Catastral, bizarrely, was around €9,000. Still waiting for the backlash.... :?
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

pdabrown
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Re: New tax on properties sold "under value"

Postby pdabrown » Sat Nov 29, 2014 3:16 pm

Hi Folks,

Thanks for all this info. Based on the comments and the fact that the amount to pay is less than 1000euro I have asked the lawyer to just pay it.

Cheers

Paul


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