3% CGT Retention on sale of property

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This topic contains 23 replies, has 9 voices, and was last updated by Profile photo of Anonymous Anonymous 3 years, 3 months ago.

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  • #57740
    Profile photo of Anonymous
    Anonymous
    Participant

    In 2009 we sold an apartment and our Spanish lawyer deducted 3% for Capital Gains Tax on the basis we might have made a gain on the sale! Unsurprisingly we made a loss!

    We were told it would take up to 3 years for the tax authorities in Murcia to refund this to us, we are still waiting and our lawyer never answers my emails questioning this, does anyone have any information as to when it will be refunded ?

    Many thanks
    David

  • #117847
    Profile photo of katy
    katy
    Spectator

    It should be less than a year. Strange your lawyer not answering…is he still around 😕 Even if you made a loss the Spanish authorities often decide you haven’t with their own made up figures. Maybe there was nothing remaining to refund.

  • #117848
    Profile photo of Anonymous
    Anonymous
    Participant

    Yes hi is still around but doesn’t seem to care once they completed the transaction, the firm is Mare Nostrum and based in Torevieja and Los Alcazares on the Mar Menor. I have been told it could take up to 4/5 years before it is refunded!

  • #117833
    Profile photo of Anonymous
    Anonymous
    Participant

    David, I’ve heard of delays of around a year but never 3 years. I think the key to the answer is your former lawyer’s total lack of interest in doing a good job for you, by the sounds of things.

  • #117841
    Profile photo of Anonymous
    Anonymous
    Participant

    Ironically he is still my lawyer as he deals with my tax affairs as a non- resident in Spain! I guess I will have to find another lawyer!

  • #117008
    Profile photo of Anonymous
    Anonymous
    Participant

    3 years is nothing! I submitted an on-line claim (5%) to my Hacienda in October 2008. Rejected, so had my abogado appeal to the Regional Higher Court of Palma de Mallorca. Rejected. I requested sight of pleadings and was promptly refused.
    Finally, I secured the services of a Procurador in Madrid in May 2010 and my abogado re-appealed to the Supreme Court of Madrid on 26 June 2013. Surprise surprise, case rejected.

    There are 100’s of potential claimants. If all won their respective cases, the government would be liable for a considerable disbursement and at this juncture they have little wish to do that!

    My claim is a paltry 30K euros. I have been quietly advised to forget, write it off and not pursue any further…

  • #117849
    Profile photo of Anonymous
    Anonymous
    Participant

    Unbelievable ! I think I will lobby my Euro
    MP to investigate this practice.

  • #117853
    Profile photo of Anonymous
    Anonymous
    Participant

    Malpractice!

    I’m not prepared to be rolled over by the government. I lived in Mallorca for fifteen years, paid all my tax and suma’s. Not once defaulted. I don’t care if my legal fees amount to 29.999K, it’s the principal and I’m fighting this. I’ve persuaded my abogado to escalate to the EC and the process has commenced. Watch this space!

  • #117862
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @davidholland wrote:

    In 2009 we sold an apartment and our Spanish lawyer deducted 3% for Capital Gains Tax on the basis we might have made a gain on the sale! Unsurprisingly we made a loss!

    We were told it would take up to 3 years for the tax authorities in Murcia to refund this to us, we are still waiting and our lawyer never answers my emails questioning this, does anyone have any information as to when it will be refunded ?

    Many thanks
    David

    Hi David,
    first the 3% retention normally takes (in my experience) 6 months to get back. With august of Decembre adding a month each….
    Might take longer in Murcia, but 3 years is excessive….

    Keep it simple, get a new representative. They can either via the notary where you signed or from hacienda request a copy of the form showing that the buyer paid the 3%. Once they have this, it should take a few days to find out the situation.

  • #117866
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks Andrew, not sure whats going on but another lawyer in Los Alcazares told me the same ie. that it could take years to recover this money.

  • #117871
    Profile photo of Anonymous
    Anonymous
    Participant

    This is very bad and unfortunately what I read coming out of this country really indicates the Government has a chip on its shoulder and is going out of its way to be nasty. What with Gibralter as well. I think they may even think if they are nasty enough the British will just all go at rock bottom prices and Spanish can get the properties cheap ! This 3% though-I cannot understand why the lawyers do not do the full calculation when the sale is done including paying the CGT to hacienda so there is no need to deduct the 3% AS for Euro MP’s -I live in Kent and my MEP is a pariah -does not even answer emails. The Conservative ones hopeless -they just collect their money and don’t care. The European Union needs to take Spain to task -but who will do it they break and bend every rule in the book -Pirates -remember Spanish Armada. .Well Rahoy has a nasty bunch around him -Cannot see a recovery there until this insanity stops.

  • #117880
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @Ptr wrote:

    This 3% though-I cannot understand why the lawyers do not do the full calculation when the sale is done including paying the CGT to hacienda so there is no need to deduct the 3%.

    because 3% must always be retained when the seller is not a fiscal resident in Spain, regardless of any ‘profit’ on the sale of their property.
    So until the EU implements rules/procedures to make it easier to chase tax dodgers, it will probably stay the same. unfortunately.

  • #117882
    Profile photo of Anonymous
    Anonymous
    Participant

    I sold my property at a loss in Oct 2011 but I covered all my fees including repayment of the mortgage and did not owe anyone anything, however the 3% retention fee was held & I was told I would get it back within a year. I am registered with a solisitor & paid my tax & all my bills duing the 5 years I owned the property I was told to keep my Spanish bank account so that any monies owed would be returned to my account. I returned to Spain October 2012 hoping that I would get the refund. I approached my tax office & the bank & was told I would have to wait for repayment to be returnedn to my account. My Solisitor advised that forms had been submitted to the local town hall (Los Montesinos) and I have to wait.
    Another year & still no money I lost over £100 thousand as I took equity our of my house in the UK to pay for the apartment & a spanish mortgage. I loved Spain, the apartment was exceptional but I would definately not advise anyone to buy property there without fully understanding or trying to understand the Spanish system.

  • #117883
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @ WendyCal

    what was submitted to the townhall?

    My suggestion to anyone here who is having problem reclaiming the 3%. Ask you legal rep. for a copy of the form 211.
    And for a copy of the 212 that should of been presented to hacienda to reclaim any monies due.

    Those should be the 2 forms, but I am working on memory right now. At least then you can see where the hold up is and why!

  • #117885
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks for the information!

  • #117893
    Profile photo of Anonymous
    Anonymous
    Participant

    @David. Your solicitor probably pocketed the money !!!!!

    @windebc: You are my kind of guy. Most people just give in. This encourages the behaviour by all and sundry in Spain.

  • #117896
    Profile photo of katy
    katy
    Spectator

    Asked a friend, they got theirs back within 9 months. However, they were expecting thousands but it was only €174 😯 Hacienda used their own assumed value plucked out of the air 🙁

  • #117902
    Profile photo of Anonymous
    Anonymous
    Participant

    I too am still waiting for my CGT 3% to be reimbursed. My lawyer (who cahrges about €450 for this service said it can take a couple of years and has sent me theforms that were submitted.

    I also find it not acceptable that a member country of the EU can behave in this fashion.

    I’m also at a loss as to how the amount isn’t set. It’s clear what was paid for the property and what it was sold for – how can “adjustments” be made to these set in stone figures?

    Regards, Carl

  • #111290
    Profile photo of Anonymous
    Anonymous
    Participant

    @carl9 wrote:

    I too am still waiting for my CGT 3% to be reimbursed. My lawyer (who cahrges about €450 for this service said it can take a couple of years and has sent me theforms that were submitted.

    Carl, how long have you been waiting? In which area was your property located?

  • #117918
    Profile photo of Anonymous
    Anonymous
    Participant

    Thinking about your comment on my reply Fuengi (sorry not sure how to quote from a previous post on here) -this puzzles me- It seems the Spanish do this because people seemingly can avoid paying their taxes. Now how easy is it to avoid paying the CGT on a sale. Do some Spanish Lawyers for a little inducement forget to deduct and send to La Hacienda. ?So if you want to sell up can you do a runner pay the 3% and never set foot in Spain again.After all the sun shines in plenty of other places. ie Are some of us too honest and to think of doing a runner if it suits us ?

  • #117931
    Profile photo of katy
    katy
    Spectator

    @Ptr wrote:

    . Do some Spanish Lawyers for a little inducement forget to deduct and send to La Hacienda. ?So if you want to sell up can you do a runner pay the 3% and never set foot in Spain again.After all the sun shines in plenty of other places. ie Are some of us too honest and to think of doing a runner if it suits us ?

    Before the property crash that’s what people did, their CGT bill would have been far more than the 3%. I could be wrong but I thought it was the purchasers Lawyer who was responsible for handing over the retention 😕

    If we hadn’t have been tax residents in Spain that’s what we would have done as the CGT would have been huge as we bought in the 90’s. I know quite a few who skipped the country.

  • #117935
    Profile photo of Anonymous
    Anonymous
    Participant

    I wonder Katy if people can still do as they did before the crash if they buy now cheaply and sell at a profit pay the 3% and will it be ok for them to visit Spain again ?

  • #117940
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @Ptr wrote:

    Thinking about your comment on my reply Fuengi (sorry not sure how to quote from a previous post on here) -this puzzles me- It seems the Spanish do this because people seemingly can avoid paying their taxes. Now how easy is it to avoid paying the CGT on a sale. Do some Spanish Lawyers for a little inducement forget to deduct and send to La Hacienda. ?

    A fiscal resident cannot avoid paying capital gains, unless they re-invest the profits. As there is a year to pay taxes due, it is quite easy for a non-resident to empty their accounts in Spain and disappear.

    @Ptr wrote:

    So if you want to sell up can you do a runner pay the 3% and never set foot in Spain again.After all the sun shines in plenty of other places. ie Are some of us too honest and to think of doing a runner if it suits us ?

    Yes. And until now I do not know of a case where the Spanish tax authorities have chased someone abroad.

  • #118134
    Profile photo of Anonymous
    Anonymous
    Participant

    Alejandro Guillen
    13:08 (4 hours ago)

    Dear Charles

    I passed the case to my colleges in Hamburg specialized in European Law. As you know we have three more clients with the same problem. In Hamburg they said we do not have a direct action to appeal to the European Court of Justice. So our possibilities ended with the Supreme Court resolution. I am afraid we cannot do anything else. It is very unfair that a country keeps for years tax legislation contrary to European law and there are not consequences at all. I am sure the outcome of the sentence would have been another one should Spain not be in crisis.

    If you come to Mallorca please call me. I’ll invite you to a good restaurant to alleviate a little bit this injustice committed by our government.

    Best regards

    Alex

    I concede. No point in wasting more money albeit contrary to a previous posting. At the very least I’ll get a good dinner!

    Good luck with your respective claims…

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