Delays in refund of 3% Sales Tax

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This topic contains 8 replies, has 5 voices, and was last updated by Profile photo of Mark Stücklin Mark Stücklin 1 year, 1 month ago.

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  • #185158
    Profile photo of simp123
    simp123
    Participant

    We sold our property in Lanzarote July 2013 and the 3% tax was withheld. We were told it would take 6 months to refund it! Although in some cases up to a year! The Modelo forms were submitted and we waited. Both our estate agent and subsequently a legal representative enquired on progress but said they could do no more – you have to wait. I’ve tried phoning but no-one speaks English and unfortunately my Spanish is inadequate. There appears no e-mail or address to use?

    How do you establish at what stage the application is? Is there any regulatory body that can be contacted to investigate delays as I’m aware we are not the only ones.

    Does anyone have any experience of pushing to return their money? We know it’s Spain but should they be allowed to hold on to money for unreasonable periods.

    Thankyou

  • #185215
    Profile photo of Mark Stücklin
    Mark Stücklin
    Keymaster

    I’m sorry to hear you are still waiting. I’ve often heard of 6 months to a year, but not longer. I don’t know what your options are but I’ll ask some contacts of mine. In the meantime you might find some useful info in these threads:

    Spanish capital gains retention tax

  • #185602
    Profile photo of kenwilliamhawkins
    kenwilliamhawkins
    Participant

    Has anyone heard anything about Polaris/Parador they have our 67,000euros.nearly 5 years now we have been trying to get answers .They refuse to accept any responsibility .We have nothing to show for it ,we gave them each stage payment as requested ,then found out we should have been given a bank guarantee for each payment .We only have one ,the contract after 18 months waiting for its return was found after we went over and demanded it.CAN ANYONE HELP US.

  • #187687
    Profile photo of simp123
    simp123
    Participant

    Wow – a payment was transferred to our account on 2 Oct 2015. However it was not what was expected.There was no other information but after contacting our bank it appeared the amount represented 6,277.54 euros. The amount retained was 9750.00!

    The house was bought for 470,000 euros in 2008 and sold in July 2013 for £325,000 net loss £145,000.

    As far as I am aware we left owing no taxes, why the reduction? Do they make as assessment based on reduction in property prices? Has anyone experienced anything similar?

  • #187715
    Profile photo of Mark Stücklin
    Mark Stücklin
    Keymaster

    Hi Simp123,

    Thanks for sharing. Really interesting.

    So it seems that, in the Canaries at least, the time they take to refund the retention is July 2013 > Oct 2015 = 2 years and 3 months, or at least in your case. That’s a scandal.

    It’s also a scandal that they did not notify you, or provide you with any further information. You should have received an official letter from the tax office explaining the amount returned. Have you really heard nothing from the tax office?

    If you sold at a loss, and the 3% is there to cover capital gains, you should have received a full refund. I’ll ask a tax lawyer about this.

  • #187743
    Profile photo of philocd
    philocd
    Participant

    I seem to remember reading, on Insight, that the issue of the withholding tax is not simply based on the difference  between purchase price and selling price.

    I thought that the tax was based on the difference between cadastral value at the time of purchase and cadastral value at time of sale. As the local / regional authorities review these cadastral values from time to time, it would then be possible to sell for less than the purchase price, but still be liable for tax due to an increase in the cadastral value.

     

  • #187745
    Profile photo of jp1
    jp1
    Participant

    I think the attitude to adopt is to add 3% onto the sale value and write this value off when selling the property. If you get some of this amount refunded then that is a bonus.

    I had my full retention returned with a small amount of interest from a sale in 2009. It took about 12 months for the refund.

    When I sell my current property, I will try and and add a few % onto the price to cover the refund. That may i won’t get too stressed out about yet another area of Spanish corruption.

  • #187782
    Profile photo of simp123
    simp123
    Participant

    Hi Mark,

    No nothing received to justify the reduction. My bank gave me a reference number on the transfer form but I’m back in the same situation of trying to find someone in the Tax Office to explain it!!!

  • #187791
    Profile photo of Mark Stücklin
    Mark Stücklin
    Keymaster

    The joys of dealing with Spanish officialdom 😉

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