Purchase tax 8% or is it actually more ?
- flan_taster
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Purchase tax 8% or is it actually more ?
I hope this has not been covered before. There is an 8% tax paid on purchase of a property. Then later on you get a further tax demand because the property you bought from the Bank who had to repossess it sold it at less than some notional value calculated by the local authorities. So now instead of being an 8% tax it is more like 12.5%.
My question is this. According to my Gestor he reckons that this additional tax is unjustified. And he will take the matter up with whoever preumably the Tax office. If he is successful in reducing the amount payable he wants to share the saving which am comfortable with.
I am wondering if in fact anybody has successfully challenged this additional Tax and won ? If the Bank had it on its books unsold for 2 years how is it that some Tax authority says it is worth much more ?
My question is this. According to my Gestor he reckons that this additional tax is unjustified. And he will take the matter up with whoever preumably the Tax office. If he is successful in reducing the amount payable he wants to share the saving which am comfortable with.
I am wondering if in fact anybody has successfully challenged this additional Tax and won ? If the Bank had it on its books unsold for 2 years how is it that some Tax authority says it is worth much more ?
- flan_taster
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Re: Purchase tax 8% or is it actually more ?
As a follow up, I notice that on the UK in Spain How to Buy a property etc one para on Purchaser's checklist states this:
QUOTE
You know the cadastral value of the property and how much purchase tax will be due. Be aware that tax is charged on the council’s valuation of the property as opposed to the amount of the sale. You can check this at the regional government’s online tax agency site using the cadastal reference number
UNQUOTE
It seems my Gestor does not agree with paying Tax if it is unwarranted !
QUOTE
You know the cadastral value of the property and how much purchase tax will be due. Be aware that tax is charged on the council’s valuation of the property as opposed to the amount of the sale. You can check this at the regional government’s online tax agency site using the cadastal reference number
UNQUOTE
It seems my Gestor does not agree with paying Tax if it is unwarranted !
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Re: Purchase tax 8% or is it actually more ?
The tax is 8% up to €400.000, 9% for the next €300.000 and 10% thereafter.
The tax is calculated on the valor catastral multiplied by the municipal coefficient and, as you say, you will be charged a supplementary tax on the amount undeclared.
You can challenge this but it will, in the first instance, be routinely rejected by AEAT. You then have to contract a property assessor to provide a valuation of the property and proceed from there through the courts with a claim for a reduction in the taxable value and a refund of some of the tax paid.
This will be a lengthy and expensive procedure and you have to decide whether, in the long run, it is worth it.
The gestor says he will carry out the procedure for a share in the saving but does this mean that the expenses involved will be deducted prior to calculating his share or will you be expected to pay them out of your own pocket?
The tax is calculated on the valor catastral multiplied by the municipal coefficient and, as you say, you will be charged a supplementary tax on the amount undeclared.
You can challenge this but it will, in the first instance, be routinely rejected by AEAT. You then have to contract a property assessor to provide a valuation of the property and proceed from there through the courts with a claim for a reduction in the taxable value and a refund of some of the tax paid.
This will be a lengthy and expensive procedure and you have to decide whether, in the long run, it is worth it.
The gestor says he will carry out the procedure for a share in the saving but does this mean that the expenses involved will be deducted prior to calculating his share or will you be expected to pay them out of your own pocket?
Let's go Brandon!
- flan_taster
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Re: Purchase tax 8% or is it actually more ?
Thanks for that.
I am going to check with the Gestor what are the total fees to be expected and what to expect if he is unsuccessful. Am certainly not prepared to pay more than the actual Tax due ! But if he is willing to process the challenge and thinks he can win then perhaps he knows something.
Am still wondering if there have been any successful challenges. By implication you seem to suggest that there can be providing you are patient.
I am going to check with the Gestor what are the total fees to be expected and what to expect if he is unsuccessful. Am certainly not prepared to pay more than the actual Tax due ! But if he is willing to process the challenge and thinks he can win then perhaps he knows something.
Am still wondering if there have been any successful challenges. By implication you seem to suggest that there can be providing you are patient.
Re: Purchase tax 8% or is it actually more ?
So is it on a no win no fee basis?
Our lawyer said it is rare for anyone to win even though he would have earned a hefty fee. Unless things have changed you still have to pay the money owed upfront before the appeal is considered. Property assessers aren't cheap and he will probably be on the side of the authorities.
Our lawyer said it is rare for anyone to win even though he would have earned a hefty fee. Unless things have changed you still have to pay the money owed upfront before the appeal is considered. Property assessers aren't cheap and he will probably be on the side of the authorities.
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Re: Purchase tax 8% or is it actually more ?
Apparently there have been successful appeals but then AEAT has come along and recalculated the taxes subsequently then you have to appeal all over again.
I am reluctant to give links to third party sites especially those of Spanish lawyers but just have a read through this as a guide:
http://www.abacotaxes.com/articles/gene ... x-in-spain
Bear in mind the caveat that they are Spanish lawyers (with all its implications) and they are obviously touting for business.
I am reluctant to give links to third party sites especially those of Spanish lawyers but just have a read through this as a guide:
http://www.abacotaxes.com/articles/gene ... x-in-spain
Bear in mind the caveat that they are Spanish lawyers (with all its implications) and they are obviously touting for business.
Let's go Brandon!
- flan_taster
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Re: Purchase tax 8% or is it actually more ?
Katy: Yes I had understood it to be No Win No Fee. The Gestor seems happy on this basis.But am checking again.
Beach: Oh dear. So you can win a lower Tax amount and think it's all over then some time later it is rescinded. How pathetic. Thanks for the link and will find more to think about.
Beach: Oh dear. So you can win a lower Tax amount and think it's all over then some time later it is rescinded. How pathetic. Thanks for the link and will find more to think about.
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Re: Purchase tax 8% or is it actually more ?
Surely the tax has always been payable on the actual sale price - unless the declared price is less than the calculation you mention?Beachcomber wrote: The tax is calculated on the valor catastral multiplied by the municipal coefficient and, as you say, you will be charged a supplementary tax on the amount undeclared.
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.
"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.
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Re: Purchase tax 8% or is it actually more ?
Yes, I suppose I should have said the minimum amount of tax payable but the discussion was about the situation where the value of the property is claimed to have been underdeclared.
Let's go Brandon!
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Re: Purchase tax 8% or is it actually more ?
Understood. Didn't mean to be pedantic, I just wondered if perhaps something had changed.
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.
"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.
- flan_taster
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Re: Purchase tax 8% or is it actually more ?
I have heard tales of locals underdeclaring when selling if the other party is happy which apperently is or was common in Andalucia. But when a bank sells its own repossessed property then surely the Tax man is going to think that the sale price is exactly what the bank agreed and got.
No funny business.
Or am I missing a point?
No funny business.
Or am I missing a point?
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Re: Purchase tax 8% or is it actually more ?
Don't think you're missing the point, it's just that even if a bank sells a property for less than Hacienda's calculation, they will charge tax to the buyer based on the higher figure. I was just checking that it doesn't work the other way round, i.e. if the sale price is higher than Hacienda's valuation, which even in today's market is still highly likely, they will still charge tax on the declared sale price.
Personally, I think they should have always used the catastral value for tax purposes, as they do with plus valia, because whether or not the valuation makes any sense, at least it's documented and transparent, and using this figure would have eliminated any point in under-declaring and avoided the whole black economy mess.
Personally, I think they should have always used the catastral value for tax purposes, as they do with plus valia, because whether or not the valuation makes any sense, at least it's documented and transparent, and using this figure would have eliminated any point in under-declaring and avoided the whole black economy mess.
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.
"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.
Re: Purchase tax 8% or is it actually more ?
Hi
I am interested in a property in the region of Murcia, I have the valor catastral could anyone give me a link to a site to find the municipal coefficient for the region in order to work out the actual purchase tax payable. Thank you
I am interested in a property in the region of Murcia, I have the valor catastral could anyone give me a link to a site to find the municipal coefficient for the region in order to work out the actual purchase tax payable. Thank you
Re: Purchase tax 8% or is it actually more ?
We've just bought an apartment in Jimena de la Frontera. It's on the top floor of a house which was demolished and rebuilt in 2001. Our lawyer told us the purchase tax was 8% and we transferred the money to him together with notary fees etc a few days before completion. On the morning we were due to sign at the notary's office the lawyer rang us to say he had just found out that as the owner of the property (a company) was the developer and we were the first purchaser (the apartments had been rented out) then we would have to pay 12% tax instead of the usual 8%! When we got to the notary's office the lawyer went in to discuss it with the notary and he confirmed that was the case. We still went ahead and completed the purchase but it was a nasty surprise!!
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