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Additional Property Purchase Taxes

Additional Property Purchase Taxes

Old Feb 22nd 2021, 11:46 am
  #1  
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Angry Additional Property Purchase Taxes

Hi everyone,

I wonder if anyone else has had the same problem as me.

I bought a house in Barcelona in 2016. Before the formal papers were signed Okupas (Squatters) got into the house and although the bank managed to get them out, they had stripped the whole house. Only the bare walls were left standing.

The bank agreed on a price of €44.000 and we paid the 10% tax to the Catalan Government.

Three years later my bank account got an embargo. I eventually found out that the Agencia Tributaria de Catalunya had decided I bought the house for too little money and had increased the value to €89.650? This meant we owed them another €5000.

I had never been notified of this. Apparently, they sent three letters, all to the wrong address, and had put a notification on a bulletin board in an office 27km from where we live in 2018.

I've tried fighting it constantly. As I earn less than the minimum wage of €900. But they just ignore me and say it has to be paid with 20% commission added and a daily interest fee.

Can anyone help or give me advice on this. It's so stressful to me and my husband who is ill with Graves' Disease (an autoimmune disorder)

Siobhan:
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Old Feb 22nd 2021, 12:13 pm
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Default Re: Additional Property Purchase Taxes

There's not much you can do unfortunately and your lawyer should have made you aware of it at the time. You better get legal advice and maybe Citizens Advice can help.
Good info here:
https://www.solicitorsinspain.com/ar...hase-tax-spain
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Old Feb 22nd 2021, 12:27 pm
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Default Re: Additional Property Purchase Taxes

What a sad story, good luck :-)
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Old Feb 22nd 2021, 12:33 pm
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Default Re: Additional Property Purchase Taxes

Hi Siobhan, can't help with the tax question but just wanted to welcome you to BE and say that I'm sorry about your situation.

Other posters may be able to answer this - if Siobhan and her husband have to pay this additional tax, are they able to negotiate to pay it in installments? Say a monthly amount that would take into account that one of the couple is unable to work for medical reasons, while the other is on a low-income?
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Old Feb 22nd 2021, 12:50 pm
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Default Re: Additional Property Purchase Taxes

Originally Posted by spouse of scouse View Post
Hi Siobhan, can't help with the tax question but just wanted to welcome you to BE and say that I'm sorry about your situation.

Other posters may be able to answer this - if Siobhan and her husband have to pay this additional tax, are they able to negotiate to pay it in installments? Say a monthly amount that would take into account that one of the couple is unable to work for medical reasons, while the other is on a low-income?
See link above and this is actually very common. We also had to pay it and were made aware that the catastral value was higher than the purchase price.
We decided to risk it and took the lower price, but eventually got the letter that we had to pay the difference. In any case the OP's personal situation will be taken into account and paying in installments should not be a problem, but I highly recommend to get legal help.
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Old Feb 22nd 2021, 12:51 pm
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Default Re: Additional Property Purchase Taxes

This situation arises frequently. The problem is that the taxman calculates the value in a completly innacurate way by mutiplying the catastral value by an arbitrary percentage that differes from town to town. It was designed to catch buyers paying partly in cash to reduce the transfer tax. This also happens with IHT. Sometimes it can work to your advantage or not depending on the official % for your town. In my case my house is valued at about 20% of the real market value so I cannot lose. Others are not so lucky!

It is possible, like all tax demands to challenge it but it will take time and some expense if you have to get a professional valuation. As Moses2013 said, the bank and lawyers should have realised that such a low sale price was bound the throw up a flag at the tax office.
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Old Feb 22nd 2021, 12:54 pm
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Default Re: Additional Property Purchase Taxes

Originally Posted by Moses2013 View Post
See link above and this is actually very common. We also had to pay it and were made aware that the catastral value was higher than the purchase price.
We decided to risk it and took the lower price, but eventually got the letter that we had to pay the difference. In any case the OP's personal situation will be taken into account and paying in installments should not be a problem, but I highly recommend to get legal help.
Thanks Moses
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Old Feb 22nd 2021, 2:05 pm
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Default Re: Additional Property Purchase Taxes

Originally Posted by Siobhan123 View Post
Hi everyone,

I wonder if anyone else has had the same problem as me.

I bought a house in Barcelona in 2016. Before the formal papers were signed Okupas (Squatters) got into the house and although the bank managed to get them out, they had stripped the whole house. Only the bare walls were left standing.

The bank agreed on a price of €44.000 and we paid the 10% tax to the Catalan Government.

Three years later my bank account got an embargo. I eventually found out that the Agencia Tributaria de Catalunya had decided I bought the house for too little money and had increased the value to €89.650? This meant we owed them another €5000.

I had never been notified of this. Apparently, they sent three letters, all to the wrong address, and had put a notification on a bulletin board in an office 27km from where we live in 2018.

I've tried fighting it constantly. As I earn less than the minimum wage of €900. But they just ignore me and say it has to be paid with 20% commission added and a daily interest fee.

Can anyone help or give me advice on this. It's so stressful to me and my husband who is ill with Graves' Disease (an autoimmune disorder)

Siobhan:
We were caught in the same way , sales value v catrastral value , it was very common post 2008 - 2009 crash . Our lawyers explained the only way to fight it was to pay an external engineer to do a complete survey/basis for re-assessment , expensive process. We opted to plead poverty and paid the difference over a three period .
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Old Feb 22nd 2021, 3:00 pm
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Default Re: Additional Property Purchase Taxes

The OPs case is an unusual scenario but looking at more common examples, what really annoys me is that estate agents and lawyers, who know all about this possibility, do not advise the buyer that it may mean an extra tax bill.

For any province you can look up the coefficient for your town and apply it to the catastral value. A 8 year old could handle the maths! There is no way that it should ever come as a surprise.
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Old Feb 22nd 2021, 3:11 pm
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Thumbs up Re: Additional Property Purchase Taxes

Thank you all for your helpful comments.

I will take on board everything you have told me.

The only problem is, I feel it's a catch 22 situation. Pay lawyers fees to fight the debt. I might not win and then I have an even bigger bill to worry about.

Can they take your house, if the debt gets too big with all the charges? Also, what about your cars and things? I'm really scared about this.

In Catalunya we pay the highest taxes than every where else. I mean 10% is ridiculous.

Love this forum, you are so nice and helpful.

Siobhan xx
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Old Feb 22nd 2021, 3:22 pm
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Default Re: Additional Property Purchase Taxes

Originally Posted by Siobhan123 View Post
In Catalunya we pay the highest taxes than every where else. I mean 10% is ridiculous.
Not true. Tax rate was 7% and 11% on new and resale respectively when I bought in Alicante.
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Old Feb 22nd 2021, 3:23 pm
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Default Re: Additional Property Purchase Taxes

Originally Posted by Siobhan123 View Post
In Catalunya we pay the highest taxes than every where else. I mean 10% is ridiculous.
It's 10% almost everywhere in Spain. And people in the UK moan about stamp duty which is a pittance in comparison.
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Old Feb 22nd 2021, 4:07 pm
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Default Re: Additional Property Purchase Taxes

Citizens Advice won't cost anything and at least you have more options than now.
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Old Feb 23rd 2021, 12:30 pm
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Default Re: Additional Property Purchase Taxes

Originally Posted by Fred James View Post
The OPs case is an unusual scenario but looking at more common examples, what really annoys me is that estate agents and lawyers, who know all about this possibility, do not advise the buyer that it may mean an extra tax bill.
Not saying estate agents and lawyers (esp. ones recommended by agents) are innocent but Spanish buyers (and others who have been diligent in their research) will know all about it and not need telling so if there is fault it's not necessarily on their heads alone.
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Old Feb 23rd 2021, 12:57 pm
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Default Re: Additional Property Purchase Taxes

Originally Posted by Siobhan123 View Post
Hi everyone,

I wonder if anyone else has had the same problem as me.

I bought a house in Barcelona in 2016. Before the formal papers were signed Okupas (Squatters) got into the house and although the bank managed to get them out, they had stripped the whole house. Only the bare walls were left standing.

The bank agreed on a price of €44.000 and we paid the 10% tax to the Catalan Government.

Three years later my bank account got an embargo. I eventually found out that the Agencia Tributaria de Catalunya had decided I bought the house for too little money and had increased the value to €89.650? This meant we owed them another €5000.

I had never been notified of this. Apparently, they sent three letters, all to the wrong address, and had put a notification on a bulletin board in an office 27km from where we live in 2018.

I've tried fighting it constantly. As I earn less than the minimum wage of €900. But they just ignore me and say it has to be paid with 20% commission added and a daily interest fee.

Can anyone help or give me advice on this. It's so stressful to me and my husband who is ill with Graves' Disease (an autoimmune disorder)

Siobhan:
So you bought this property from a bank ?
That being the case then surly the bank should help here as they stated the valuation via (as they do) one of their own surveyors.
There was no cash in hand like the old days that most are talking about here as what would the bank have to gain.
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