Who should pay the Plusvalia Tax? A purchaser or developer?

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This topic contains 7 replies, has 7 voices, and was last updated by Profile photo of Anonymous Anonymous 10 years, 8 months ago.

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  • #51673
    Profile photo of Anonymous
    Anonymous
    Participant

    Hello everyone,

    I’m in the process of purchasing an off plan apartment and having made a preliminary look into the situation my Lawyer has come back to me and informed me that in this prospective deal the developer expects me to pay the Plusvalia Tax (Capital Gains Tax of the land).

    Can anyone offer any advice on what this tax is and who usually pays it in off plan purchases? How much of a liability is it? Is it the developer or usually the purchaser? What did you do? And what would you advise me and others in the same situation to do?

    I don’t remember it being highlighted in David Hampshire’s Buying A Home In Spain Book. Any insight and tips would be very much appreciated.

    Cheers,

    M

  • #61456
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi M

    Just looked in “You and the Law in Spain” book. Says that “traditionally the seller has paid the Plus Valia tax however,it is frequent practice for the contract to state “todos los gastos” all the expenses arising to be paid by the purchaser.

    Since January 1999 the plus valia can be charged directly against the property itself.

    Hope this is useful, off to check my contract as we have purchased off plan and expect to complete soon….maybe.

  • #61457
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    Anonymous
    Participant

    Oops, forget to mention, the plus valia is the municipal tax on the increase in the value of the land since its last sale. Apparently this is usually very low on an apartment (new) as there is little land involved and only a short time has elapsed since last sale. The local municipal tax office will have details on how much you will pay.(assessed value)

  • #61458
    Profile photo of Anonymous
    Anonymous
    Participant

    Yes, it should be the vendor who pays this – enter “plusvalia” into the search facility and you will turn up a couple of interesting and informative posts on this subject. However, you may find it was sneakily written into your purchase that you would cough up….hope not!

  • #61459
    Profile photo of Anonymous
    Anonymous
    Participant

    According to Devwatch 37% of new developments will impose the plus valia tax on the purchaser.

  • #61463
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    Anonymous
    Participant

    Completed on Friday , had to pay this tax on my off plan property , about 200 euros

  • #61466
    Profile photo of Anonymous
    Anonymous
    Participant

    In the Canaries, the purchaser normally pays. I suppose that means that it isn’t stuck on the purchase price. If it was, you’d pay VAT on the plus valia too. I’ve just bought a new property from the developer who has owned the land for 20 years. The local administration hasssome flexibility in the percentage they apply, up to a maximum. For my big (1049 square metre) plot, my plus valia is 3500 Euros, so 200 doesn’t seem too bad.

  • #61468
    Profile photo of Anonymous
    Anonymous
    Participant

    Plusvalía (Capital Gain tax) must be paid, as Law statues, by the vendor as it is a tax to be paid by the one who is making the profit (the base of the tax is roughtly the difference between the first purchase price and the amount you get when selling)

    Nowadays it’s allowed to freely (not imposed) agree in the private contract that the purchaser pays that tax, but last Friday Spanish Government approved a new proposal of consumer-protection Law (It has from now on to follow full parliament procedures and it will come real Law in a few months) that prohibits this today’s common practice.

    In brief: Today it’s legal if you freely agreed to pay it (if your contract says so), tomorrow the vendor wont be able to make you pay it

    Cesar

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