davidgardiner

We are currently buying a villa at 338K and have been advised by the agent the casastral valuation is 456K and we may (within the next four years) receive a bill for 8% of the difference between our purchase price and their valuation. Has anyone else experienced this and can offer some advice?
Thank you
David

Lynn R

See this recent thread on the forum:-
http://britishexpats.com/forum/showthread.php?t=794606

The agent has done the right thing by alerting you to this.

Rosemary

As Concierge for the Spanish section of BE I would like to say hello and welcome.

BE is a very large expat website, so if you have problems finding your way around we have concierges who will try to direct you. The moderators for the Spanish forums are Mitzyboy and Fred James, moderators are there to ensure that the site runs smoothly within the rules of BE. Problems and complaints should always be addressed to a moderador who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are friendly and helpful with a wealth of knowledge of the issues of living in Spain. At the top of the page you will find a quirkily named thread called Free Beer which is full of important and useful information. Hope you enjoy your time participating in the forums.

I will move your thread into the main forum to gain more answers.

Please let me know if you need any further help.

Rosemary

Mitzyboy

Yep, it happens
Sorry

Fred James

The tax office use a valuation based on the catastral value which usually is a factor of up to three times the value. It just depends on the area.

Where exactly is the property and I will see if I can find the value.

If they do charge you then you can challenge it but that can be costly and take some time. It's happening a lot recently. Their computer systems just compare the value against the declared price and spit out a letter if there is a difference.

davidgardiner

Fred

Thank you.

The property is in Benissa Moraira. It is a 2000m2 plot and 360m2 build. Built about 30 years ago. Like everything else it started life at 550K dropping to 395K and then 350K which is when I stepped in having been monitoring it for some time.

Fred James

The valuation for tax purposes is €638k using a factor of 1.4.

That means you could be liable for the transfer tax on an additional €228k which is quite a lot of money!

The Valencia Government site where you can calculate the factors for each municipality is

http://csi.ha.gva.es/kiosko/valor_bi...ST&calcular=si

For those concerned about potential IHT problems this is how they calculate the minimum value for IHT.

davidgardiner

Thank you very much for this. Now assuming I pay tax on whatever valuation they put on the property does this mean they cannot charge me any CGT on the the difference of my purchase price and their valuation at this time? Assuming of course I sell it for a gain in the future.

HBG

I would urge a great deal of caution here. On the face of it a 350 metre build on a 2000 metre property between Benissa and Moraira sounds a real bargain at 335K, but is it?

Prices along the coast have fallen by as much as 50% from five years ago, and are still falling.

And Hacienda is still working on the values from the expensive times and you are likely to get a large bill, with even a fine from them in the future.

And selling at a profit in the near future is unlikely.

Christ, am I sorry to be writing this, it's a lovely place to live, but these are troubled times.

Domino

but you need to use Goolzoom to find out if the catastral makes the property rural or urban land. If it is urban land then fine. If it is marked as rural land then although there may be habitation certificate and all the other docs it may well be illegal. This is because the national rules will demand a house of that size be on an area of 10,000 sqm and dependent on whether it has, water, mains drainage and so on.

I have just been caught out over a property that from the outside looks totally legal, is being sold as such, it is illegal as it is on too small a plot for the size of property. Luckily my solicitor spotted it before we completed.

`

davidgardiner

Thanks for all the help

We are not entering into this deal for any form of financial gain and we would be insane to think that way. We have been looking for a long time and do feel we now have found what we have been looking for.
All we want to be sure of is that are eyes are wide open and we do not receive any unexpected shocks in the future.
This is simply our reward for years of hard work and we look forward to a dozen or so long weekends per year plus a family holiday with the grandchildren during summer. I do not wish to prop up the Spanish economy and welcome all forms of help and advice from seasoned veterans dealing with spanish bureaucracy and the inevitable bills associated within.

Longlegpete

The Benissa Costa is a lovely part of the world, the Catastral was revised in 2005 which is why the multiplier is low at 1.4 but as has been said you will most likely be asked for the extra,I know of 2 people on that coast that have had bills of 6,000 and 18,000 euro for the shortfall, you should factor it into your calculations, it also has an effect on your La Renta tax and IBI (council tax) as they are calculated from the Catastral so they will be rather high by Spanish standards.

A good lawyer is a must, I am sure you will have heard this many a time but it's good practice not to use the agents lawyer, if you have not found one yet I can recommend one, pm me if you would like to know

Hope none of what I have said is teaching you to suck eggs, if so please ignore

Fred James

In which case just factor in the possibility that you have to pay the increased tax and if you are happy with the potential total price then go for it.

You might even find that they don't pick up on it. Life is too short to worry about a few thousand in tax if you can afford it - do what you feel is right for you.

snikpoh

Hi Fred - thanks for the link.

Just one question, what does "... y año al que corresponda dicho valor:" mean? Do they want the year of the bill or (as I suspect) the date that the property was valued. If the latter, mine is 1987 and this option is not available on the site.

Fred James

It's the year for which you want the valuation. That would usually be the current year but in some cases you might want a historical valuation.

You enter the current catastral value.