Costs of property purchase
Dec 12th 2017, 8:11 am
#16
Banned
Joined: Oct 2012
Posts: 26,724
Re: Costs of property purchase
What I mean is when she sells in the future, she is taxed roughly on the difference between the price she is selling for minus the purchase price. When she paid now EUR 200,000 the price in the deeds is only EUR 180,000 (10% furniture). This difference of 20,000 could be taxed when she sells. With a tax of 28% (I don't know if that is the rate!) she will pay EUR 5,600 extra tax.
But if she really took over nice furniture of a certain value it is logic that the price for the house and furniture will be split.
We just bought a house and in the contract we put down that we buy the house without furniture. Then the price we paid is 100% for the property.
When people take over all of a small part of the furniture, talk about the price for the furniture and put it in the promissory contract!
But if she really took over nice furniture of a certain value it is logic that the price for the house and furniture will be split.
We just bought a house and in the contract we put down that we buy the house without furniture. Then the price we paid is 100% for the property.
When people take over all of a small part of the furniture, talk about the price for the furniture and put it in the promissory contract!
If reinvesting in another property within the EU then no tax bill will arise.
I am sure that right.
Dec 12th 2017, 3:45 pm
#17
Forum Regular
Joined: Feb 2016
Posts: 257
Re: Costs of property purchase
Yes this is fishy, I think you should confront your solicitor and change one!
Dec 14th 2017, 3:57 pm
#18
Forum Regular
Thread Starter
Joined: Jun 2017
Posts: 102
Re: Costs of property purchase
I eventually got to the bottom of it.
The list of charges he sent me before I proceeded with the purchase included taxes but he'd managed to mis-calculate them and he has been truly apologetic at the error.
It turns out that the IMT was exactly as I'd calculated but he had failed to explain about stamp duty - he'd lumped the two together in the 'taxes' category which fell 1200 euros below what it should have been.
Having seen all the receipts for what he's paid and having done the sums myself, I'm more than happy that it's all in order.
As for the deed price of the property being lower than what I'd paid, I've asked several people about this, both Portuguese and ex-pats. It seems that this really is a very common practice and a way of keeping the tax for the buyer down. The 'furniture' referred to is actually the fitted kitchen and a couple of other small items.
I recall having a telephone conversation with the agent after my offer was accepted. Her English, whilst fairly good was a bit more difficult over the phone. She said at that time that the kitchen was staying exactly as it was and everything was being left for me. I thought this a bit of a bizarre statement at the time because in the UK, I don't know of many sellers or buyers that wouldn't expect a kitchen to come with the house. It would seem however, that many sellers in Europe will take the kitchen with them when they sell
Anyway, have no intention of moving out of the house in the foreseeable so I'm happy with the way things have worked out. It's all part of my learning curve
The list of charges he sent me before I proceeded with the purchase included taxes but he'd managed to mis-calculate them and he has been truly apologetic at the error.
It turns out that the IMT was exactly as I'd calculated but he had failed to explain about stamp duty - he'd lumped the two together in the 'taxes' category which fell 1200 euros below what it should have been.
Having seen all the receipts for what he's paid and having done the sums myself, I'm more than happy that it's all in order.
As for the deed price of the property being lower than what I'd paid, I've asked several people about this, both Portuguese and ex-pats. It seems that this really is a very common practice and a way of keeping the tax for the buyer down. The 'furniture' referred to is actually the fitted kitchen and a couple of other small items.
I recall having a telephone conversation with the agent after my offer was accepted. Her English, whilst fairly good was a bit more difficult over the phone. She said at that time that the kitchen was staying exactly as it was and everything was being left for me. I thought this a bit of a bizarre statement at the time because in the UK, I don't know of many sellers or buyers that wouldn't expect a kitchen to come with the house. It would seem however, that many sellers in Europe will take the kitchen with them when they sell
Anyway, have no intention of moving out of the house in the foreseeable so I'm happy with the way things have worked out. It's all part of my learning curve
