- This topic has 24 replies, 9 voices, and was last updated 11 years, 7 months ago by
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We all know of the mis-selling of Spanish property during the boom, we hear of land grab issues, high completion costs, illegal builds and demolitions such as the Priors, lengthy court procedures, crooked town halls etc but not heard of this one before 🙄
http://www.theolivepress.es/spain-news/2013/01 … lat-owner/
I wonder how serious Spain are in improving it’s image abroad to potential property buyers, do they understand good PR? 😯
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@angie: Did you not know that the sun only shines in Spain & that is their PR
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And that they are the only country who grow olives, olive oil, wine etc.
My husband has only just accepted that produce from Greece and Italy can be just as good. Notice though that Spanish supermarkets don’t stock any other options…. check out Tescos and you’ll find wine from around the world, in Spain it’s from Spain.
That’s good but also does make them the Americans of Europe a bit? ie: haven’t really got a clue about what others do?
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@itsme wrote:
And that they are the only country who grow olives, olive oil, wine etc.
My husband has only just accepted that produce from Greece and Italy can be just as good. Notice though that Spanish supermarkets don’t stock any other options…. check out Tescos and you’ll find wine from around the world, in Spain it’s from Spain.
That’s good but also does make them the Americans of Europe a bit? ie: haven’t really got a clue about what others do?
It’s difficult enough to get the Spanish to buy products from outside their own region, let alone their country. However the Italians have been caught repackaging Greek and Spanish olive oil and selling it to the gullible Brits in pretty bottles and at many times the price, so that’s possibly why your husband thinks it’s just as good.
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@angie wrote:
We all know of the mis-selling of Spanish property during the boom, we hear of land grab issues, high completion costs, illegal builds and demolitions such as the Priors, lengthy court procedures, crooked town halls etc but not heard of this one before 🙄
http://www.theolivepress.es/spain-news/2013/01/16/e40000-in-taxes-and-fees-for-spanish-flat-owner/
I wonder how serious Spain are in improving it’s image abroad to potential property buyers, do they understand good PR? 😯
To be honest I don’t find much wrong with this. It sounds like the original purchase was dodgy (“The buyer, wanting to make as much profit as possible on the property, would only sell to an off shore company.” – yeah, right 🙄 🙄 🙄 ) and did they really pay around €199,000 for a three-bedroom apartment at Alcazaba Beach, Estepona, in 1987? No they paid a lot less and they’re lyeing to avoid CGT. Besides, if it really was worth €199,000 in 1987 then it would be worth at least twice that now, so €40,000 costs (i.e. 10%) is what they should expect to pay. In fact I think I might leave a comment on the article….
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I have no issue this this either.
The buyer has tried to scam his way out of paying taxes for a property in Spain that he has used as a holiday home. Creating an overseas company, putting the company in his children’s name whom were probably not much older than 18 at the time.
He has avoided paying non-resident income tax, by doing so and this is a large part of the cost E12,000.
I pay my non-resident income tax even though it’s just me and my Spanish wife that use the apartment, we don’t rent it. Over that period of time (25 years) at the current rate we will pay 4000 Euros. But this guys apartment was 200,000 Euros in 87. It must be a very large property and hence his non-resident income tax much larger.
Sorry but no sympathy. I see the Spanish all around me (family and friends) renting their Summer homes to others and not paying a cent in taxes as well as every other tax that they try to get a way with. This buyer just tried to do the same via some complex set-up.
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We do not have all the facts. Surely he is entitled to plan his tax affairs. The Hacienda’s job is to close those loop holes.
If Spain has equitable tax regime, transparent system, with right of appeal & the appeal is heard in a short space of time with judges who are not baised & or corrupt we will not have issues & infact they will collect a larger amount. A good example of this is Singapore.
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I don’t think this particular buyer will find much sympathy anywhere, neither in Spain nor the UK. If anything, his total bill after all his shady dealings is on the low side.
His case doesn’t give Spain a bad name, only him and his crooked advisors.
And if Spain succeeds in keeping people like him from buying in Spain, it will have done the rest of us a big favour.
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@shakeel wrote:
We do not have all the facts. Surely he is entitled to plan his tax affairs. The Hacienda’s job is to close those loop holes.
If Spain has equitable tax regime, transparent system, with right of appeal & the appeal is heard in a short space of time with judges who are not baised & or corrupt we will not have issues & infact they will collect a larger amount. A good example of this is Singapore.
If he wants to exploit loopholes that’s fine, but it appears this loophole didn’t work out and now he is being asked to pay the same amount of tax as everyone else. Rather than “slamming the Spanish government” (as the article puts it) he should simply pay up and shut up. This is what makes the case so suspicious – he has owned property in Spain for 25 years and is now complaining about having to pay €40k transaction costs on a property that was worth €199k in 1989. It really sounds like he’s been dodging taxes left right and centre, and is now shocked to find out how high these costs are for everyone else.
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@shakeel wrote:
We do not have all the facts. Surely he is entitled to plan his tax affairs. The Hacienda’s job is to close those loop holes.
If Spain has equitable tax regime, transparent system, with right of appeal & the appeal is heard in a short space of time with judges who are not baised & or corrupt we will not have issues & infact they will collect a larger amount. A good example of this is Singapore.
But Haciendia have not just pulled some fake tax rules and presented him with a bill. The taxes applied will be based on current tax law.
We are right in the fact that we don’t know the exact details, but we do know he tried to engineer lower taxes or no taxes. I am guessing that he has fallen foul of the tax rule because the directors of the company, his children, have now had the property transferred into their name and the original tax avoidance vehicle has become void, if the property had been sold to individuals not associated with the company, in the normal way a company disposes of assets then it may have been a different story. But I am just guessing.
The UK tax authorities have said they will do something similar to those that have avoided stamp duty on UK purchases. Although schemes have been notified to HMRC and accepted as legal schemes, they are not being used in the manner intended and I think am correct in saying that HMRC has reserved the right to claw back stamp duty on residential sales even if the scheme was deemed to be legal. But I am open to being corrected on this.
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interesting…
based on this:
How it all adds up
Notary & Registry fees €2,000
Stamp duty €6,375
Non-resident tax €12,750
Solicitors fees €5,142
Town hall tax (Plusvalia tax) €12,695
Police fees €48he bought a property for 199.000€ and it seems to be worth 425.000€ now.
non residents tax should be 3% of the declared price.
lawyers fees, if we assume is 1% (plus 21%VAT), allows us to come out with the above figure.after owning the property for 24 years, on transferring the property to another name (offshore company to individual) only paying 12,695 does not seem overly high.
What interests me, is there is no mention of transfer tax….?
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@itsme wrote:
And that they are the only country who grow olives, olive oil, wine etc.
My husband has only just accepted that produce from Greece and Italy can be just as good. Notice though that Spanish supermarkets don’t stock any other options…. check out Tescos and you’ll find wine from around the world, in Spain it’s from Spain.
That’s good but also does make them the Americans of Europe a bit? ie: haven’t really got a clue about what others do?
? All the large supermarkets here (malaga), eroskis, hipercor, euromarket, etc… seem to offer a selection of international wines, with euromarket having a good selection of californian, australian, etc… wines.
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I assumed the stamp duty referred to the transfer tax. However as I posted above, assuming a transfer tax of about 6% (it’s probably more now) a tax of €6,375 would imply the property was sold for only €106k! Plusvalia for non-residents is 21% if they paid €12,695 then that implies their net before tax profit was about €60k. Implying they sold for something like €290k. It doesn’t really add up.
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@Chopera wrote:
I assumed the stamp duty referred to the transfer tax. However as I posted above, assuming a transfer tax of about 6% (it’s probably more now) a tax of €6,375 would imply the property was sold for only €106k! Plusvalia for non-residents is 21% if they paid €12,695 then that implies their net before tax profit was about €60k. Implying they sold for something like €290k. It doesn’t really add up.
careful here. They referred to ‘townhall tax’ which would be the “Impuesto sobre el imcremento de valor de terrenos de naturaleza urbana” (plusvalia), not CGT.
non-resident tax I would assume is the 3% retencion. So by dividing that amount by 3 and then multiplying by 100% to give the official value.
I realise that this is quite an assumption, but interestingly the lawyer fees work out to 1% of this amount plus IVA.Transfer tax should 8%.
Not exactly sure what the ‘stamp duty’ refers too, as this would only need to be paid when there is IVA payment (so a new build or financing but onl). But the amount stated refers to 1.5%.
The only way I see this is 1% that they have done a first copy of the title deeds at notary and its has been sent to the land registry.
0.5% extra would be to add certain addendum to the paperwork to prevent seizure/embargo of assets. -
I seem to have posted a link that’s appears accepted by most that this chap deserves all he gets, if he’s been attempting to evade/avoid his due taxes then yes he should pay them like everyone else, but a bit crass of him to have his story published.
Meanwhile Spain should employ a PR person with some PR skills methinks, something they seem lacking in 😯 🙄
I really believe Spain does shoot itself in both feet and needs to address this for credibility 🙄
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@angie wrote:
Meanwhile Spain should employ a PR person with some PR skills methinks, something they seem lacking in 😯 🙄
I really believe Spain does shoot itself in both feet and needs to address this for credibility 🙄
agreed
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In France is almost impossible to buy products from elsewhere. All the olives and oil are from Morocco and poor quality in my view. Bayonne ham is predominant, Spanish Serrano which I love is difficult to find. Wines are all French which is superior in every way but you can buy Port from Portugal. Sherry is like gold dust.
Single market? It’s a fallacy. 🙁 -
You’re right about Spain and its PR, Angie, they don’t know the meaning of the word, but you’ve picked on the wrong example. The Priors would have been a better one and a myriad of others – the latest one that amuses me is the offer to supply foreigners with residencia if they buy quite cheap houses in Spain, but then asking them to declare their foreign held assets in the same breath. Who’s going to go along with that?
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@Fuengi wrote:
interesting…
based on this:
How it all adds up
Notary & Registry fees €2,000
Stamp duty €6,375
Non-resident tax €12,750
Solicitors fees €5,142
Town hall tax (Plusvalia tax) €12,695
Police fees €48non residents tax should be 3% of the declared price.
lawyers fees, if we assume is 1% (plus 21%VAT), allows us to come out with the above figure.after owning the property for 24 years, on transferring the property to another name (offshore company to individual) only paying 12,695 does not seem overly high.
What interests me, is there is no mention of transfer tax….?
Agree! Surely a transfer from off-shore company to individuals is a sale 😕 Clearly they have not being paying yearly taxes either. He has got off lightly! Had to smile when he said “we can understand stamp duty and things like that but resident’s tax and town hall tax were all a nasty shock to us.
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http://elpais.com/elpais/2013/01/17/inenglish/1358452012_091482.html
I was going to say that this is the man who singlehandedly brought Marbella down, but there were several thousand just like him, including quite a few Brits.
The Spanish should be praised because they are not going to let it go, however much harm it may do to their country’s reputation, as this pursuit of Gil’s heirs shows. I was surprised that the infamous ‘Malaya’ case is still running, it’s been running for years. Perhaps they’re waiting for Sean Connery to come out of hiding to send him down along with the 100 others from Marbella’s elite currently before the Court.
Maybe at some time in the future some clever philosopher will publish an explanation to explain how a small Spanish fishing town became the most corrupt place in the world, a resting place for the dregs from all over the world.
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