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I can’t believe what the tax man is trying to do!
I am just amazed at what I am about to tell you and would like to see what you all think:
My cousin in spain purchased a house in 2001 and lived there until 2005. Then he moved on to his second home in 2006 which he lived in until end of 2010.
The tax man sent a letter to his gestor saying that they don’t believe he lived in the first house as a main residency for 3 years and owes tax on the profits.
So he sent the gestor proof with electric bills, water bills etc.
The tax man today has replied saying that as he did not live in the house for the required 3 years in order to not have tax liablility that he owes tax on the profit he made from the house.!!!!!!They point blank don’t beleive him as he didn’t put his change of address down with the council (empadronamiento) so it is not registered in the coucil that he lived at that address, and based on that they are asking him to pay a massive 30.000 euros tax bill!!! I mean his kids were born there, he even has that address on their birth certificates.
The gestor is wiping his hands saying he has done all he can and it is fighting a losing batle trying to convince the taxman he lived there as a main residency.
Can they do this???
I suggested he get a laywer but that will cost him,
any ideas would be appreciated as I think they are trying it on here. -
As nobody else has bothered to reply, I’d say get a lawyer. The likely hood of success doesn’t seem high from what I’ve read here, but he is going to have to take it to court.
Spain needs income and if your cousin has money I can understand their logic in pursuing him. Its one of the reasons that Spain is so unattractive as an property investment location, renting with looks so much better.
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@peterhun wrote:
As nobody else has bothered to reply, I’d say get a lawyer. The likely hood of success doesn’t seem high from what I’ve read here, but he is going to have to take it to court.
Spain needs income and if your cousin has money I can understand their logic in pursuing him. Its one of the reasons that Spain is so unattractive as an property investment location, renting with looks so much better.
Thankyou for your reply. He is now getting a laywer. The point is he doesn’t have money to pay it! And even if he did, why should he pay for something when hacienda is just assuming he didn’t live there?
I don’t understand why they think they can give him a bill for something which he genuinly doesn’t owe. He has a box full of bills and letters sent to that address from when he moved in to when he moved out, so I can only assume they are basing this on the fact that he forgot to update his details with the ayuntamiento when he moved in.
The laywer said that hacienda expect you to pay first and then they look into it!!! As I speak spanish and his spanish is very limited, I have feeling I will have to get involved to try to help him out, but I just don’t even trust spanish laywers to be honest!
Spain is a joke when it comes to legalities. I will keep you posted on what the outcome is.ps:sorry if I offended you in the other posts!
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Jonas – Mark has a list of lawyers here: http://www.spanishpropertyinsight.com/buff/lawyers/list-of-lawyers-in-spain/ though I notice he says “Please note that I do not manage or control them in any way, and I cannot be held responsible for their conduct”.
I suggest it may be a good idea to post exactly where your cousin’s first house is. An SPI member may then be able to recommend a good lawyer, always better than a stab in the dark.
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@charlie wrote:
Jonas – Mark has a list of lawyers here: http://www.spanishpropertyinsight.com/buff/lawyers/list-of-lawyers-in-spain/ though I notice he says “Please note that I do not manage or control them in any way, and I cannot be held responsible for their conduct”.
I suggest it may be a good idea to post exactly where your cousin’s first house is. An SPI member may then be able to recommend a good lawyer, always better than a stab in the dark.
Hi thanks, he has now appointed a lawyer, this one was recommended by a friend of the family, so fingers crossed they won’t let him down. Mind you the laywer did say something about sometimes hacienda makes you pay before you can go to court??!!!!
I need to speak to her to see what she means with that. How can they expect you to pay for something you don’t owe or dont agree with, surely that is what going to court is for.
Spain baffles me! 😕 -
@jonas wrote:
Mind you the laywer did say something about sometimes hacienda makes you pay before you can go to court??!!!!
The big question is, is it legal for them to do that? Which is why a wishy-washy lawyer is no good, and a ‘hot on the law’ lawyer is.
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@charlie wrote:
@jonas wrote:
Mind you the laywer did say something about sometimes hacienda makes you pay before you can go to court??!!!!
The big question is, is it legal for them to do that? Which is why a wishy-washy lawyer is no good, and a ‘hot on the law’ lawyer is.
I know what you mean, I have lost faith in any spanish laywers to be honest. But she is taking a look at all the paperwork and will let me know what she thinks this week, so if it sounds like she doesn’t know what she is doing I will move on to another one!
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The main proof of residency when selling is tax declaration (returns). Usually the notary asks to see these, he did when we sold. If the Notary is not satisfied the sale will not proceed without the 3% retention for non-residency.
Yes you do have to pay first and then appeal…one of those charming spanish customs! Statistically most appeals are rejected.
Not sure but wouldn’t the 4 years 6 months timescale for uncollected tax apply in these cicumstances 😕
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@katy wrote:
The main proof of residency when selling is tax declaration (returns). Usually the notary asks to see these, he did when we sold. If the Notary is not satisfied the sale will not proceed without the 3% retention for non-residency.
Yes you do have to pay first and then appeal…one of those charming spanish customs! Statistically most appeals are rejected.
Not sure but wouldn’t the 4 years 6 months timescale for uncollected tax apply in these cicumstances 😕
Apparently not, because they first wrote to his gestor end of 2010 so they were still in time to chase up the 2005 taxes paid. This is when the gestor first asked for bills in that period sent to that address as proof, so he sent them to him, but, hacienda ignored it and say clearly on the paperwork:
“Even though you purchased the property in 2001, you did not reside in the property until 2003, and as you sold in 2005, it can not be classed as a main residency as you did not reside the minimum 3 years required.” The reason they are using 2003 as a moving in date is because that is when he updated his details in the ayuntamiento. The reason he did this is because the school for his kid wanted proof of empadronamiento, so he just went to update it.
All genuine stuff.Now that you come to mention it though, the 4 year thing, I will get the laywer to take a look just in case, but I am sure she will pick up on it if they were out of date to put in a claim or whatever they call it.
With regards to his main proof of residency being tax declarations, the gestor did them for him every year as he had a cafe at the time. So I can’t understand myself why they don’t believe him. As I say, he has a full box load of stuff to prove it, I just hope the laywer can make hacienda see sense. Just because he did not update his details in the ayuntamiento should not mean he should be punished with a 30.000euro bill surely.
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