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Fact or Fiction - Taxes over 4 years old not chased

Fact or Fiction - Taxes over 4 years old not chased

Old Sep 25th 2022, 7:44 pm
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Default Fact or Fiction - Taxes over 4 years old not chased

Research re buying a residential property : I understand ( correctly?) that a vendor MUST pay all outstanding taxes before being allowed to legally sell a property. But have read in varous sources that Spanish tax authorities do not 'collect' taxes that are more than 4 years old - fact or fiction?????

I also believe that any unpaid taxes/fees/charges relating to a property remain with the property if an owner(s) does not pay them. So do any unpaid taxes of IBI still appaers as a debt on the property if they are over 4 years old?- Dont want to get caught out .
TIA
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Old Sep 25th 2022, 9:33 pm
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Default Re: Fact or Fiction - Taxes over 4 years old not chased

Just make sure that the vendor provides the appropriate paperwork to prove that the IBI property tax has all been paid - this is all part of what a professional solicitor will do as part of their services as well as checking all other services are paid up todate - elec, water etc...

I think you might be mixing up personal taxes which I think that limited to 5 years with property taxes which I think can be claimed further back.

Worth a look here - https://www.pellicerheredia.com/en/open-library/

https://expatsmagazine.org/buying-property-in-spain/

Last edited by spainrico; Sep 25th 2022 at 9:35 pm.
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Old Sep 25th 2022, 10:21 pm
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Default Re: Fact or Fiction - Taxes over 4 years old not chased

I believe the 4 year rule applies to opening investigations pertaining to tax. In other words if the tax man has informed you of unpaid taxes then they can chase you for payment for as long as they want. You cant seek to avoid for 4 years then get a clean slate. It's also true that money owed on property follows the property not individual ( a terrible system that was commonly exploited by dishonest sellers 20 years ago- where the seller would take a loan on the property a few days before selling and saddle the innocent buyer with a debt!) Fortunately banks etc are now forced to check this but it is still the most important thing for your lawyer to check before the appointment with notary.
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Old Sep 25th 2022, 10:38 pm
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Default Re: Fact or Fiction - Taxes over 4 years old not chased

Originally Posted by onmyway2022
Research re buying a residential property : I understand ( correctly?) that a vendor MUST pay all outstanding taxes before being allowed to legally sell a property. But have read in varous sources that Spanish tax authorities do not 'collect' taxes that are more than 4 years old - fact or fiction?????

I also believe that any unpaid taxes/fees/charges relating to a property remain with the property if an owner(s) does not pay them. So do any unpaid taxes of IBI still appaers as a debt on the property if they are over 4 years old?- Dont want to get caught out .
TIA
Any outstanding property taxes etc. will continue to be linked to the property.

https://www.idealista.com/en/news/fi...-tax-explained

When is it due?

  • Town halls are empowered to rule on this, so it varies. Normally due once a year. By Law, whoever owns the property on the 1st of January is liable to pay this tax.

Consequences of non-payment

  • It may lead to your property being impounded and sold off in a public auction. Spanish town halls, besieged by dropping revenue, are becoming increasingly adept at pursuing aggressively this local tax post-credit-crunch, particularly for high-end property.
  • It is not possible to file and pay non-resident income tax (either quarterly, if you lease, or annually as imputed income tax), as it requires for its calculation a copy of an IBI tax invoice. This in turn will attract fines, delay interests and surcharges.
  • On selling, a buyer’s lawyer will practice a huge retention to safeguard against any unpaid IBI tax on the previous 4 years.
  • As a seller, you may forfeit the 3% sales proceeds tax rebate (plus legal interests). When a seller is non-resident in Spain, a buyer must withhold 3% of the sales proceeds by Law and pay it into the Spanish Tax Office. Non-resident sellers may be entitled to a tax rebate on the 3% withheld (subject to criteria) if up to date with the taxman.

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Old Sep 26th 2022, 12:01 am
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Default Re: Fact or Fiction - Taxes over 4 years old not chased

Thank you all for your resposnes so far - I will digest carefully
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Old Sep 26th 2022, 3:08 am
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Default Re: Fact or Fiction - Taxes over 4 years old not chased

Don't get hung up on this - by all means be sensible but a good solicitor will ensure no problems.
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Old Sep 26th 2022, 9:27 am
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Default Re: Fact or Fiction - Taxes over 4 years old not chased

Hola
I had a recent experience where the owner died but inheritance wasn't started until after four years plus 183 days plus one day then the taxes were lower - this was Andalucia and i am not sure if that matters - but a decent solicitor should tell you

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Old Sep 29th 2022, 12:17 am
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Default Re: Fact or Fiction - Taxes over 4 years old not chased

Originally Posted by Ronnyone
I believe the 4 year rule applies to opening investigations pertaining to tax. In other words if the tax man has informed you of unpaid taxes then they can chase you for payment for as long as they want. You cant seek to avoid for 4 years then get a clean slate. It's also true that money owed on property follows the property not individual ( a terrible system that was commonly exploited by dishonest sellers 20 years ago- where the seller would take a loan on the property a few days before selling and saddle the innocent buyer with a debt!) Fortunately banks etc are now forced to check this but it is still the most important thing for your lawyer to check before the appointment with notary.
Thanks. That dirty trick certainly was dirty. Thanks for the heads up - much appreciated
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Old Sep 29th 2022, 12:19 am
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Default Re: Fact or Fiction - Taxes over 4 years old not chased

Originally Posted by spainrico
Don't get hung up on this - by all means be sensible but a good solicitor will ensure no problems.
Thanks for your help to date. Unfortunately even as an educated person from experience I put UK solicitors and financial advisors in my top two of professions I least trust.
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