Re: Re: The Problems Caused By Under-Declaration

#115548

zenkarma
Participant

@angie wrote:

However the authorities are not daft and the true price might be assumed, and a bigger tax bill possibly

What utter rubbish. Where do you get this garbage from?

First of all, all your figures are plucked out of thin air and make huge assumptions, most of which are wrong. Your first incorrect assumption is that the price these people ultimately sell for has anything at all to do with what price they paid – wrong.

Given the market has fallen significantly from the height, they’re likely running at a loss as whatever they sell for – that price is not fixed or related to what they actually paid. If their house is only worth say €120k now, or at least that’s what someone’s prepared to buy if for, what difference does the official figure make? €240k – €120k = a loss of half, €180 is entirely irrelevant. Wrong again.

And, what tax? Hello???

You only pay capital gains tax on profits! That’s why it’s called gains! €180k official declared buy value – €120k sell value = €0 gains! €240k unofficial buy value – €120k = €0 gains! Wrong again!

The only time property bought with part cash and registered with a lower value makes any difference is when you make a profit on it, which then means you pay a higher amount in capital gains tax. Eg Same couple buy their house for €240k and put an official value down at €180k. They now sell in a rising market for €350k. The capital gains exposure is now €180k – €350k = €170k as opposed to €350k – €240k = €110k. So they expose themselves to an additional €60k of capital gains tax.

This stuff really isn’t that hard to understand! 🙄