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There are reports that some developers are charging 100% of the I.V.A on the full purchase price at the deposit stage to all purchasers.
Does anyone know just which developers are doing this and what happens if.
1 The developer goes bust.
2 Fails to get legal status on the property or development.
3 The purchaser decides to give the keys back having only paid the deposit.
Is interest payable on the I V.A if 100% of the purchase if it is paid at deposit stage and the time up to completion.
Who would pay it if this answer is yes.
Where did you get this information ? Have you got any link with these reports ? I´m very interested in that issue
I will P/M you
My understanding from lawyers is thats illegal! Only the iva of the paid amount is due at any given time
Why are buyers lawyers allowing this?
Might be worth informaing hacienda! – its certainly a novel way of sprucing up the cash flow!!
Well I am aware of at least one that has been insisting that this is the normal practice for years selling thousands of property in Spain and on the instructions of the developers solicitors who of course were being recommended to the buyers.
The cash flow is what would concern me as a buyer if you get the meaning. 😕
This subject was discussed at length back in 2006 where Drakan (lawyer) states:
“I’ve never seen this in my life and looks extremely suspicious to say the least and If I were your lawyer would advise completey against paying upfront all IVA/VAT, it’s ludicrous.
In a deposit you always pay an amount of money and the proportionate 7% VAT for a new build/off-plan. But you never ever pay all the VAT upfront. No developer would or could ask for that. That’s the EA meddling.
It’s not illegal providing you agree to it but it’s certainly not advisable. The only reason I see to doing this is that the EA is needing cash badly and has “forced” you to do this. “
Going by other posts on this link, it seems OVP is one of the biggest ‘culprits’ re. this practice.
Cant see how they can invoice for it – iva has to be shown on a legit invoice and is a percentage of the net money charged.
I doubt their accountants would want this and its supposed to go to Hacienda at the end of the trimestre.
Something not right!
Try and keep up Charlie 😉
@Just Frank wrote:
Try and keep up Charlie 😉
Keep up with what?? – the planet you’re floating around on? 😉
What are you on about this time, sweetpea?
Well I know one company that does do this. Need I say more!
What are you saying? 😯
Do. Companies like the one you mentioned charge all of the I.V.A of the purchase price at deposit stage and still do it after all this time. 😕
IF this was the case is this legal if the client didnt agree and was told this was normal practice in Spain by the solicitors.
Just asking you understand and do any other developments,sale promoters or E.A s carry out this same pratice.
Not sure what planet I am on today, depends ?
Dont quite think of you as a sweetpea somehow!
They certainly were but I have no up-to-date info on this. My last dealings were with EB&CC. Maybe since more and more people are seeking truly independent legal advice (hopefully) it might have stoppped? I dont know if the company still refer buyers to a particular lawyer but those who used Alberici would have been asked for the full amount.
Am not “saying” anything.
I was just trying to be helpful on your thread by giving a link to where this subject was discussed before on SPI and hoped the info and advice contained in it possibly may have been helpful.
“…is this legal if the client didnt agree….?”
Seems from Drakan’s reply, the answer is no. If they did agree because they were badly advised by their legals, then obviously that is a different matter.
All your other questions: haven’t a clue. Sorry.
Just thought the link I gave may have proved of interest.
YOU 😯 not saying anything. 😕
Well,Well there is life on this planet after all.
Have contacted that company you kindly gave and waiting a reply as the first just didnt add up.
You know what its like,you just get the feeling that somethings amiss,comes with experience. 😉
Must go as many need my help,thanks again for the info
Some of us know when just to offer a helpful link and not to open our mouths for the sake of opening it.
Theres a Pot calling the Kettle black if ever I heard one 😆
Is there anyone that can confirm that this is a valid contract.
Purchaser pays reservation fee inc I.V.A
Purchaser pays 30% deposit inc I.V.A
Purchaser is invoiced 3 to 4 months later for the remaining balance of the I.V.A for the full value of the remaining contract
This is in the contract ?and purchasers would have been informed that this was the way the system worked in Spain by solicitors of the developers 😕
This is your thread Frank. If you want to continue filling it with your nonsense responses to people who offer help, it’s your perogative.
Frank – doesnt sound right. You cannot pay for something that doesnt exist. Assuming in the private purchase contract it states that the deposit is for the right to buy the thing that is being built. Once built it exists and therefore can be bought!
So, if non existent, you are being asked to pay the iva only on what hasnt been built!! And on what hasnt been paid for!
Plus as most deals tend to be 30 or 40% down THEN the rest on completion and usually by finance, it really doesnt make sense!!
Shall I P/M you the actual confirmation of these facts as this one has really got my interest up.
My concerns are as you say how can you pay a tax on something that is not yet supplied.
Thats because they dont know me as well as you do. 😉
Charlie You know the saying if you cant take it dont give it and let us get on with how some of us wish to post on an open forum.
Yes me too – Im always interested in stuff like this. And intruiged.
I know the law here is similar to Moroccan as in normally off plan one pays stage payemtns as it gets built – and there could be 20 stages! Each stage has its own bank guarantee applied as well. So to pay iva on something not given or received is crazy.
I just cant see how you can pay iva on something you havent even paid for – how does the invoice get through?? And if it HAS been paid to the lawyer or developer (allegedly) then Hacienda should have a trace of it in the quarterly accounts from the developer – one way of checking it got to where it should have done.
Doesn´t the total IVA on a new build (if collected at deposit stage) equate almost exactly to the cost of a new Porche Ceyanne.
Lets see – €250,000 for decent apartment = €17,500 (7% IVA) No it seems they will only get a new Porche every 5th apartment.
Oh cynical you 😯
Inez Have posted the P/M to you for a browse with the wine.
@Just Frank wrote:
Oh cynical you 😯
It´s strange Frank, I never used to be 😕
I was also told that a couple successfully recovered money from OVP. They reserved a property on the Rocas site and lo and behold it was never built (plans changed etc) however, they eventually got their deposit back (via independent lawyers) and also received compensation from Alverici as it is not possile to conveyance a property that doesnt exist. Possibly from her insurance. Not sure.
Does anyone know who this could be reported too?
Surely it would be like someone collecting VAT in the UK and not passing it to the taxman? This would be serious stuff in the UK.
I’d be interested to know who to contact to make sure, which I doubt, that this money has been passed to the right people/authorities and has not gone on buying the next flash motor or paying for the next staff “jolly” to Spain/Morocco.
Now somehow I think that this may be of interest to a number of people 😯
Posted on the forum for one of the develpments.
It wasn’t my solicitor that agreed this – O-P only ever asked for the IVA on the deposit. I thought I was badly done to as I have friends who didn’t even pay any IVA at all (not even on the deposit)! They agreed with O-P to pay all the IVA at the end.
There must be something fishy about a company that has one rule for one and one rule for another when it comes to paying the IVA. Something not ringing true about that wouldnt you say? Who would believe that?
Yep. Could be right as you cant mess with tax.
Could be someone has posted it for self motivated purposes so clarification for many very worried people would be very welcomed.
Probably nothing fishy at all. Just depended on whether the purchaser had a good independent lawyer who wouldn’t tolerate such a (illegal) demand in their contract in the first place, or a lawyer who lives in the pocket of the developer and will help screw the client as far as possible.
Now that post is what I really think, the O. .P solicitors were often on the veiwing trips. 😕
Just in case you needed the service of an independant 😯 solicitor you understand and all part on the total cradle to grave service. 😯
Ah yes, the old O*P “Turn key Operation” chestnut eh?
Try telling the poor souls on the Eye on Spain website!
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