October 9, 2006 at 4:55 pm #52338
Can anyone help, I have seen adverts by agents on internet web sites for properties in Spain, they have a description of the property and the asking price, then at the bottom of the advert, a statement saying that the maximum declaired value on this property will be 70%.
As I understand it, under declairing, although common is illegal, so how can they get away with actually advertising it this way.
Or am I missing something here.
October 9, 2006 at 5:03 pm #66575
Report them to the EEAU 😉
October 9, 2006 at 5:07 pm #66577
Yes, it’s illegal, but depending on the area still very much common practice. I doubt it happens in Madrid but certainly in the countryside – especially around Cádiz and here in Extremadura – it is still very much the norm.
It’s unusual to see it advertised but 70% isn’t unreasonable in my experience. It’s virtually certain that owners want to under declare when they sell – it saves them (and you!) tax – but as to what percentage is reasonable, be guided by your lawyer.
And quite often if you don’t want to go down that route either they won’t sell to you or they’ll want a higher price.
October 9, 2006 at 8:00 pm #66588
what it amounts to is Fraud – defrauding the tax man is a serious offence and one which is being clamped odwn heavily. Spain is under the threat of Economic sancitons unless it cleans up its act. It is of course taking a while to filter through but eventually it will. Down here on the coast they are issuing fines already for under declaration (CB that is)
However fraud also carries a jail term penaly – and I think it wont be long before soemone is made an example of – just hope it isnt you.
My advice if confronted with this situation is walk away. There will always be another property – so why risk it. The taxes you save now will be more than outweighed by the taxes you WILL have to pay later and the fines you will have to pay later.
Why pay someone elses tax bill for them
October 9, 2006 at 10:51 pm #66593
Thanks Hillybilly, Charliestrauss, and Vince.
Thanks for your replies, I certainly dont like the idea of agreeing to under declairing on buying, simply because if on a possible future sale I could’nt get the buyer to agree to a similar deal, I would end up paying more tax then.
I hope that by the time I am in a position to purchase a property, the practice is less wide spread, thanks again.
October 10, 2006 at 10:51 am #66601
– it saves them (and you!) tax –
It may save you some today but What happens the day you may transfer this property? As you say you should under declare again to avoid more taxes risking the Tax authorities to discover and fine you
More and more inspections are being carried out throughout Spain so only reasonable price is market price
October 10, 2006 at 5:32 pm #66614
Thanks for your reply Cesar.
When I am in a position to purchase a property in Spain, I will definitely not agree to under declaring, and will have to walk away from the deal, if they insist on it.
I have learnt a lot about the buying process in Spain from this Forum,
and feel a lot more confident, thanks again.
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