June 12, 2009 at 1:09 pm #55055
Hi to all,
I am asking for opinions more than asking a question here.
I have a property that I bought reformed and placed back on the market. The property is in quite an exclusive area (Cala d’Or, Mallorca) and has never been lived in. I have posted a sales message on this forum.
My thought is this. I have seen several properties that are being raffled off in the same way you see the luxury cars being raffled at international airports. Bearing in mind the exclusiveness of its location (beach front) and its price tag, I am torn between the idea of raffling for a quick sale, or waiting possibly another year before I can sell to willing client.
Does anybody have any information on how to begin or enter the property into a raffle style sale. Plus any thoughts on the actual idea are welcomed.
June 12, 2009 at 1:12 pm #92596
June 12, 2009 at 1:15 pm #92597
Thanks Katy, that was quick.
June 12, 2009 at 4:20 pm #92599
Have just been looking at the Daily Mail online 😳
and have now just seen this thread on SPI. Spooky.
June 14, 2009 at 4:31 pm #92622
I would proceed with real caution here. I looked into this about 3 months ago for my sister. I spoke to my lawyer first then two notaries and the net result is that it is pretty much illegal under Spanish law to do a raffle without a gaming licence
The way around it is possibly (and I state possibly because it is also fraught with pitfalls).
1. A UK company buys the property and the shares of this company are transferred to the UK company. Thus ensuring the tax man gets their legitimate slice and no further penalties are instigated by the Spanish tax authorities.
HOWEVER in this case the jurisdiction would be under UK law (ie a UK company transfer of shares at a nominal value). Under UK law you cannot raffle a house as a prize without a gaming licence (dont even think about a gaming licence – it would cost you a mint and you would be stung for large tax)
The way around it is that if you ask a question that the participant has to answer which requires skill, talent or knowledge to answer, then you can get round it. BUT
There are now a number of test cases going through the UK legal system where the Gaming commission has deemed the questions not challenging enough therefore it is a basic raffle and requires the relevant permits/Taxes etc to be paid.
So the question must be challenging (you can use multi choice questions – but beware if the gaming commission don’t believe there is enough challenge you could end up with a huge tax bill)
The other way around it is to sell tickets for something (an event for example or a party) and offer participants FREE entry to the raffle (ie it is a non paying prize raffle for entering a paying event/scheme etc. )
However you MUST ALSO allow entries to non participating buyers (the best way round this is to have this stated in small print somewhere obscure making it difficult to find for all but the most dedicated searcher) but it MUST be allowed to enter without purchase other wise it will be classed as a paid for entry and therefore subject to gaming rules.
In short after spending a month or so researching it we deemed t too risky and potentially very pricey if the tax man gets involved in it so didn’t go ahead.
There are a number of UK lawyers who are doing it on behalf of their clients so I would strongly suggest you contact a couple of them and clarify the legal position before you go ahead. Hwever these have experience in UK properties in UK raffles.
From a Spanish perspective you cold end up paying 50% tax, so ask yourself is it really worth the risk?
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