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Tagged: 3pc retention / withholding tax, Plusvalia tax, Tax
- This topic has 2 replies, 3 voices, and was last updated 5 years, 8 months ago by Vendido.
July 5, 2017 at 8:36 pm #213789JoeParticipant
Having bought a property in Spain last year from a non national, his agent received the plusvalia tax from him but did not pay it to the relevant authorities, so now the tax has landed on us with interest, approx €4500 , if we pay it to stop the interest accruing, can we apply for a refund as the property was sold at a loss, or dose the vendor have to pay it. Thanks for any information
July 9, 2017 at 12:40 pm #213913freddoParticipant
Will depend on what was in your purchase contract as to who should pat the PlusValia
<b>The Plusvalia Tax </b>is set by the local authorities and based on the increase of the value of the land from the date the owner acquired the property to the time of the present sale.
The local authorities determine the amount of plusvalía to be paid for each house purchase in Spain, depending on the area where the property is located. The tax is calculated according to the ratable value of the property and the number of years it has been in the ownership of the vendor. The market value or sales price of the property does not have an effect on the plusvalía tax.
Normally, but not necessarily, the seller pays the plusvalía tax. However, this will depend on the sales agreement.
July 9, 2017 at 9:47 pm #213934VendidoParticipant
presume from your post that you were not expecting to pay the Plusvalia, so the liability would have been the seller; although this could become your liability if he defaults.
What I don’t quite understand if the sellers agent (solicitor ?) has been given the funds why has he not paid the Town Hall. I am not a solicitor but I would have thought, if you can prove this, then the agent is liable. Otherwise this is straight forward theft by the agent.
Also as this was a non-resident seller, 3% of the sale price would have been retained by the tax authority as a safeguard against non payment of taxes etc. Surely, if the agent cannot be forced to pay then this should be the source of funds to pay the Plusvalia. You say the seller sold at a loss so presumably he would have no capital gains tax liability. Thus if you do go ahead and pay the Plusvalia then the seller could find himself eventually having a refund of his retention money.
Hope this gives you some new thoughts
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