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Just reading this on another forum,can the wise people on this forum answer it.
I’m about to buy an apartment. The seller brought it originally for 50% more than the price I’m going to pay. My solicitor advised me that I may be liable to additional tax over the 7% of price I’ll pay. This is due to the tax authority considering the price I pay as not being fair market value. What can I do to prevent the liability? -
Hi Skippy
Your lawyer is right. The regional governments (Junta de Andalucía, etc) state minimum declared values for each property. The way they calculate this minumum value is by multilying the cadastrial value of the property per a coefficient that they assign for every and each Town Hall.
However, in the event the tax office claim you to pay more taxes, you can dispute this tax claim by proving the market value of your property is less than the value stated by the tax office. However, you would have to obtain a valuation showing this lower market value.
Best regards
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@skippy wrote:
Just reading this on another forum,can the wise people on this forum answer it.
I’m about to buy an apartment. The seller brought it originally for 50% more than the price I’m going to pay. My solicitor advised me that I may be liable to additional tax over the 7% of price I’ll pay. This is due to the tax authority considering the price I pay as not being fair market value. What can I do to prevent the liability?Make sure you solicitor has informed hacienda. Either way, you will probably get a notice saying you need to pay X due to their valuations. Your solicitor can find out exactly how much they are going to price it.
If its a large difference, you will need to arrange a valuation of your property, which will hopefully come in lower than their figure. If that is the case you can argue their figure.
you just need to know what the difference is going to be and whether its worth arguing.
hope that helps
Andrew -
@JAVIERML wrote:
Hi Skippy
Your lawyer is right. The regional governments (Junta de Andalucía, etc) state minimum declared values for each property. The way they calculate this minumum value is by multilying the cadastrial value of the property per a coefficient that they assign for every and each Town Hall.
However, in the event the tax office claim you to pay more taxes, you can dispute this tax claim by proving the market value of your property is less than the value stated by the tax office. However, you would have to obtain a valuation showing this lower market value.
Best regards
Javier,
here is a question. What about if he does a valuation prior to the purchase, say for a mortgage. Can that be used to argue your case, maybe even present to hacienda beforehand? OR would it have to be a new valuaiton after comepltion?
Andrew
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This very same question was asked at a seminar for buying in Spain at the “Homes in the Sun” Exhibition at Earls Court yesterday (it was pretty deserted to put it mildly, with only a handful of people there).
We were told that if the price you’re paying is less than the Catastral value (which is increasingly common), then you’ll have to pay the tax on the Catastral value. Period.
If the purchase price is more than the Catastral value, but less than the figure the authorities believe it should be, then they can demand the difference in tax. You can appeal with formal valuations to prove your case, but it’ll be costly, time consuming and no guarantee of a result. All the experts could conclude was that the system needs an overhall.
Tell us something we don’t know!
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@Fuengi wrote:
@JAVIERML wrote:
Hi Skippy
Your lawyer is right. The regional governments (Junta de Andalucía, etc) state minimum declared values for each property. The way they calculate this minumum value is by multilying the cadastrial value of the property per a coefficient that they assign for every and each Town Hall.
However, in the event the tax office claim you to pay more taxes, you can dispute this tax claim by proving the market value of your property is less than the value stated by the tax office. However, you would have to obtain a valuation showing this lower market value.
Best regards
Javier,
here is a question. What about if he does a valuation prior to the purchase, say for a mortgage. Can that be used to argue your case, maybe even present to hacienda beforehand? OR would it have to be a new valuaiton after comepltion?
Andrew
Hi Andrew
Yes, you can use the valuation you get for the mortgage by the time of buying the property (providing this one is in your favour).
Best regards
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