Issues with a new property purchase.

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This topic contains 13 replies, has 13 voices, and was last updated by Profile photo of Anonymous Anonymous 3 years, 10 months ago.

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  • #57248
    Profile photo of Anonymous
    Anonymous
    Participant

    Hello all,

    I’m new to these forums, so please forgive me for any mistakes…

    Basically, my wife and I agreed to purchase an apartment whilst on holiday last year. After several discussions with the estate agent (who advised that we didn’t really need a solicitor), we eventually appointed a solicitor for peace of mind. Prior to appointing the solicitor, I’d asked them to confirm all of the charges that I would occur, so as I could budget accordingly for them and not come across any nasty surprises etc. So, after we’d deposited a large amount of cash into a Spanish bank account, we eventually signed for the property (end of October 2012). Within the first week after the contracts were exchanged, the solicitor informed us that there was a chance of an extra charge from the tax office – as the price we’d paid for the apartment was below the ‘Cadastral value’ of the property – he estimated this to be €1,000. It was explained to us that this money may not even be asked for, but the tax office had up to 4 years to request this money from us. Needless to say, as we were at point of no return for the purchase, we were less than impressed with the Solicitor and Estate Agent for not informing us of this at a much earlier stage.

    We then received a ‘final statement’ from the solicitor. Within this statement there were charges for transferring money from one account to another – these charges were never detailed on the initial quote that we received from the solicitor and came as a total shock to us, they total over €500.

    I’ve also just received an email from the solicitor stating that ‘the Tax Office requires from you the payment of’ approx €1,800.00 – the tax difference between the purchase price and the Cadastral value of the property!

    Can someone please let me know:
    Is what’s happening to me legal i.e. can extra bank charges be applied, without any prior notification. And, do I have any options with the extra tax that is being requested – especially as the first I knew about it was after the contracts had been signed and the purchase money etc. had been paid.

    Please let me know if you require any further details from me in order to answer the above. It seems to me that there has a been a distinct lack of information supplied at early enough stages in the purchase procedures – and when it has been supplied, there’s not a great deal I can do about it. If I’d known about these additional amounts earlier, then this would have affected the offer that I’d originally made for the apartment. Or is this common practice?

  • #114822
    Profile photo of katy
    katy
    Spectator

    It is happening a lot due to house prices falling. You can appeal…but not many win. You will still have to deposit the amount owed and will incur extra costs for valuation etc. Your Lawyer should have been able to inform you before sale. I would ask for an explanation about the high bank charges.

  • #114824
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    Regarding the bank charges, if you are willing to lose some of your civility, go the the bank, yell, scream, etc, they may reverse some or all of this fee.

    In the future, you need to do your homework. Some banks charge others do not. Some banks accept the notation of OURS on transfers as having already had the fees paid, so the will not charge anything else.

  • #114826
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi,

    As katy says ……… “you can appeal but ….”. Chance of you winning is low as this is a well established practice that has become even more prevalent since the house price crash drove the market price below the cadastral values. If it were I, I’d probably resign to paying it but not before ……….

    Get the original demand from the lawyer. Find out which form you will need to fill in to make the payment. Get a copy of this form from the local tax office (they may even help you fill it in), take form to bank and pay, take administration copy back to the tax office (it may well be a multi part form). I would do the payment myself as I have heard of enough instances where the lawyer was paid to do the payment and surprise !!!!! they just trousered the cash.

    Dispute these transfer charges (are they your bank’s charges, the lawyer’s bank’s charges or the lawyers). These things are always negotiable with the Bank Manager and even though these extortionate rates are actually written into the banking agreement, I know of many who have argued the cause and had very substantial reductions.

    Regards,

    Mike

  • #114827
    Profile photo of Chopera
    Chopera
    Participant

    @TT-Phil wrote:

    Hello all,

    I’m new to these forums, so please forgive me for any mistakes…

    Basically, my wife and I agreed to purchase an apartment whilst on holiday last year. After several discussions with the estate agent (who advised that we didn’t really need a solicitor), we eventually appointed a solicitor for peace of mind. Prior to appointing the solicitor, I’d asked them to confirm all of the charges that I would occur, so as I could budget accordingly for them and not come across any nasty surprises etc. So, after we’d deposited a large amount of cash into a Spanish bank account, we eventually signed for the property (end of October 2012). Within the first week after the contracts were exchanged, the solicitor informed us that there was a chance of an extra charge from the tax office – as the price we’d paid for the apartment was below the ‘Cadastral value’ of the property – he estimated this to be €1,000. It was explained to us that this money may not even be asked for, but the tax office had up to 4 years to request this money from us. Needless to say, as we were at point of no return for the purchase, we were less than impressed with the Solicitor and Estate Agent for not informing us of this at a much earlier stage.

    We then received a ‘final statement’ from the solicitor. Within this statement there were charges for transferring money from one account to another – these charges were never detailed on the initial quote that we received from the solicitor and came as a total shock to us, they total over €500.

    I’ve also just received an email from the solicitor stating that ‘the Tax Office requires from you the payment of’ approx €1,800.00 – the tax difference between the purchase price and the Cadastral value of the property!

    Can someone please let me know:
    Is what’s happening to me legal i.e. can extra bank charges be applied, without any prior notification. And, do I have any options with the extra tax that is being requested – especially as the first I knew about it was after the contracts had been signed and the purchase money etc. had been paid.

    Please let me know if you require any further details from me in order to answer the above. It seems to me that there has a been a distinct lack of information supplied at early enough stages in the purchase procedures – and when it has been supplied, there’s not a great deal I can do about it. If I’d known about these additional amounts earlier, then this would have affected the offer that I’d originally made for the apartment. Or is this common practice?

    This is normal with Spain. As Katie says the Cadastral value is usually above the actual agreed price these days but there’s not much you can do about it. Most people find out what their value is when contracts are exchanged in the notary’s office, at which point it’s too late to do much about it. It’s a bit like council tax in the UK – the council places a value on your property and taxes you accordingly, regardless of the current market value.

    If you feel like you’ve been robbed by the local council and the banks, and you have the urge to prevent them from getting another penny from you, then you should have no problem integrating into Spanish society.

  • #114828
    Profile photo of angie
    angie
    Spectator

    I agree with those here who say have a rant at the Bank, threaten to take your account elsewhere if they don’t remove or reduce the charges, we did, and they removed charges. Remember Spanish Banks do need your business now they’re in trouble.

    The other issues you’ve had are typical lack of transparency in Spanish property dealings which many on here have experience of, it’s a disgrace that this still goes on. Me personally, I’d go after the solicitor and report him to his association, but it’s likely to take time, if you can bear the aggro. If you have any of this in writing then so much the better.

    How on earth anyone new buying abroad is expected to cover every single likelihood or potential cost implication is an impossibility it seems. Don’t forget I believe an English translation of a Spanish contract is also not binding with property, only the Spanish version, well it was when we bought, so a slip up (deliberate) here and there and people get stuffed again. 🙄

  • #114829
    Profile photo of logan
    logan
    Participant

    The unseen policy in Spain of estate agents, lawyers, banks and even the government is to firstly get you on the hook. They gloss over real costs with a few chosen platitudes. Once they have maneuvered you to a point where it’s too expensive to pull out they have you by the cojones. It’s at this stage when the bills and charges keep coming. They will never stop. Your holiday apartment is going to cost you mucho. 🙁

    I’m afraid it’s pointless from a distance to do anything else but pay up. Your first losses are always the cheapest.

  • #114830
    Profile photo of Anonymous
    Anonymous
    Participant

    But keep smiling as the sun shines in Spain 🙂

  • #114831
    Profile photo of Anonymous
    Anonymous
    Participant

    Considering the many other things that could have gone wrong with such a purchase, in Spain, at this time, and depending on the value of the property you bought, you seem to have got off lightly. An under-declaring of the catastral value of only 1,800 Euros is tiny compared to some re-valuations I know of.

    Generally, the additional costs when buying a property in Spain are between 10 and 12% on top of the declared price.

    Bank transfers are a different matter, set by individual banks with no apparent rules, but they seem to be more flexible in favour of their clients nowadays than they’ve ever been, and it’s worth talking to them.

    I hope you enjoy your holiday home for many years to come.

    And, at 5.45 in the evening here in Spain the sun is still shining brightly, as it has been all day.

  • #114832
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @TT-Phil wrote:

    Hello all,

    I’m new to these forums, so please forgive me for any mistakes…

    Prior to appointing the solicitor, I’d asked them to confirm all of the charges that I would occur, so as I could budget accordingly for them and not come across any nasty surprises etc.

    Question, was the lawyer supplied with IBI receipts, nota simple, etc….?

    @TT-Phil wrote:

    So, after we’d deposited a large amount of cash into a Spanish bank account, we eventually signed for the property (end of October 2012). Within the first week after the contracts were exchanged, the solicitor informed us that there was a chance of an extra charge from the tax office – as the price we’d paid for the apartment was below the ‘Cadastral value’ of the property – he estimated this to be €1,000.

    Ok, this is strange (IMO). Prior to exchanging contracts, your lawyer should have done a range of legal checks on the property to confirm whether there are any debts on the property, and confirm catastral values, etc… Also, there would have been no need for ‘estimates’ as the figures tend to be VERY clear.

    @TT-Phil wrote:

    It was explained to us that this money may not even be asked for, but the tax office had up to 4 years to request this money from us. Needless to say, as we were at point of no return for the purchase, we were less than impressed with the Solicitor and Estate Agent for not informing us of this at a much earlier stage.

    We then received a ‘final statement’ from the solicitor. Within this statement there were charges for transferring money from one account to another – these charges were never detailed on the initial quote that we received from the solicitor and came as a total shock to us, they total over €500.

    ? What transfers exactly?

    @TT-Phil wrote:

    I’ve also just received an email from the solicitor stating that ‘the Tax Office requires from you the payment of’ approx €1,800.00 – the tax difference between the purchase price and the Cadastral value of the property!

    So you bought the property for 22.500€ below the supposed minimum?

    @TT-Phil wrote:

    Can someone please let me know:
    Is what’s happening to me legal i.e. can extra bank charges be applied, without any prior notification. And, do I have any options with the extra tax that is being requested – especially as the first I knew about it was after the contracts had been signed and the purchase money etc. had been paid.

    Please clarify, did you transfer the monies already and they the bank has already charged you? so that there is a shortfall to pay all purchase taxes, etc…. Or was the money in the lawyers account, and they are saying they need to ‘extra’ amount?

  • #114834
    Profile photo of angie
    angie
    Spectator

    Interesting to see that an expanding Estate Agent group on the CDS is now openly recommending a firm of lawyers on their website, something that surprises me after all these years when many agents always recommended lawyers they were often in bed with and to the clients’ detriment.

    Personally, I don’t agree with it and I would not recommend buyers use such recommendation, it’s like the bad old days could come back, but just my opinion 🙄

  • #114835
    Profile photo of Anonymous
    Anonymous
    Participant

    Fuengi is spot on. The solictor should have known the cadastral value and as such if he qouted €1000, than it should be in that region.

    Mortimm. Para two should be acted upon.

    Bank charghes & transfer. Your Bank or your solicitors ??? Where was the money from ???

    Report the solictor’s to ” colegio de abagados “

    You have to be doing a bit of running arournd. You are the judge if you prefer to do this in the cold and grey sky’s or in summy, Spain.

  • #115236
    Profile photo of Anonymous
    Anonymous
    Participant

    @TT-Phil wrote:

    Hello all,

    I’m new to these forums, so please forgive me for any mistakes…

    Basically, my wife and I agreed to purchase an apartment whilst on holiday last year. After several discussions with the estate agent (who advised that we didn’t really need a solicitor), we eventually appointed a solicitor for peace of mind. Prior to appointing the solicitor, I’d asked them to confirm all of the charges that I would occur, so as I could budget accordingly for them and not come across any nasty surprises etc. So, after we’d deposited a large amount of cash into a Spanish bank account, we eventually signed for the property (end of October 2012). Within the first week after the contracts were exchanged, the solicitor informed us that there was a chance of an extra charge from the tax office – as the price we’d paid for the apartment was below the ‘Cadastral value’ of the property – he estimated this to be €1,000. It was explained to us that this money may not even be asked for, but the tax office had up to 4 years to request this money from us. Needless to say, as we were at point of no return for the purchase, we were less than impressed with the Solicitor and Estate Agent for not informing us of this at a much earlier stage.

    We then received a ‘final statement’ from the solicitor. Within this statement there were charges for transferring money from one account to another – these charges were never detailed on the initial quote that we received from the solicitor and came as a total shock to us, they total over €500.

    I’ve also just received an email from the solicitor stating that ‘the Tax Office requires from you the payment of’ approx €1,800.00 – the tax difference between the purchase price and the Cadastral value of the property!

    Can someone please let me know:
    Is what’s happening to me legal i.e. can extra bank charges be applied, without any prior notification. And, do I have any options with the extra tax that is being requested – especially as the first I knew about it was after the contracts had been signed and the purchase money etc. had been paid.

    Please let me know if you require any further details from me in order to answer the above. It seems to me that there has a been a distinct lack of information supplied at early enough stages in the purchase procedures – and when it has been supplied, there’s not a great deal I can do about it. If I’d known about these additional amounts earlier, then this would have affected the offer that I’d originally made for the apartment. Or is this common practice?

    I think your big mistake was buying a Spanish property last year. It has probably lost 20% in value by now. Property prices will continue going down in Spain for at least the next five years and will go off the edge of a cliff when Spain eventually leaves the Euro. Why the hurry to buy a property in Spain. The Spanish government is broke and is desperate to squeeze as much money from people as possible and an easy target for the Spanish taxman are homeowners especially holiday homeowners. With tax receipts falling because of the collapse in the Spanish property market the Government and regional authorities are desperate for cash and they are going to raise their local version of the council tax (annual property tax), they will come after your savings and investments, eventually all middle income brits who have settled in Spain will end up broke.

  • #115255
    Profile photo of Anonymous
    Anonymous
    Participant

    A great agent should have checked these numbers for you in advance but a solicitor should deffinately had been aware of them. He doesn’t deserve his fee.

    You should be glad that you didn’t get screwed more than this though.

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