steviedeluxe

I'm unsure why this hasn't hit the headlines, but it seems you could be landed with a nasty tax bill if you buy a "bargain" in Valencia. I'm not even sure this article is correct when it states you can avoid the tax by disputing it - surely it just delays the payment?
Very sombre reading for any of us tempted by the fall in prices in Valencian property.

http://www.houses-for-sale-in-spain....perty-in-spain

Fred James

It's perfectly true and happens frequently and not just in Valencia.

Hacienda have a calculation, based on the catastral value, that they use to value property for tax purposes. If you declare a purchase at less than their figure you get a bill.

If you disagree ,you have to challenge it with a correct recent valuation.

steviedeluxe

Is it possible to "win" that challenge, or do people end up paying the bill?

jackytoo

Happened to us as far back as 1995. Our Lawyer advised us not to appeal, costs of doing it are high and it is rare for anyone to win. Seeing as he was going to be paid to do it for us we just paid the tax. Only consolation is we still got a bargain. Though it is unfair.

Fred James

Firstly, it is just possible that they have made a mistake in the calculation of the value or maybe the catastral data was wrong. If you can prove that then an appeal should succeed.

In not you can still challenge it but you will need expensive valuations and lawyers/gestors fees to pay etc and it will be a battle but it is possible that you would win.

It really depends on how big the discrepancy is.

In many cases the official value based on the calculation is well below the price paid. My house is officially valued at about a third of its current rock bottom sale price. The catastral valuation system is frankly a load of garbage - some win, some lose.

stuboy

What's the purpose of this system?

Apart from trying to limit 'black' money

Fred James

Exactly that. The assumption is that if you declare less than the figure that Hacienda think it's worth, the assumption is that you paid the difference in black money to avoid some of the tax.

Unfortunately, it's up to you to prove otherwise or pay up.

It's nothing new, it has always been this way. The problem is that with the fall in prices it crops up more often.

amideislas

Considering that "making a mistake" is by far the easiest way to overcharge for anything in Spain (with the added advantage of pushing the expense of proving otherwise on the victim), and add to that the desperation for money in most local governments, I'd have to believe the temptation to make a 5- or 6- digit "mistake" would be pretty compelling - especially since fighting the government (and winning) carries other, unrelated and unmeasurable risks.

Dick Dasterdly

Nothing new there and it applies right across Spain and the Canaries.

I've had some experience of it going back more than twenty years.

I'm quite surprised that an Expat claiming to be an authority on all things Spanish, was not already fully aware of it,...... but there again he is only recently arrived

cricketman

Again, a case of me obviously living in an alternative Spain to everyone else on here

I have never come across what you guys drone on about

chopera

Yes this happens everywhere in Spain. The problem in part lies in the fact that people say that property taxes are based on transaction value when it just isn't true. They're based on a multiple of the catastral value, in a similar way that council tax in the UK is based on some banding decided by the council. Both are "unfair" in the sense that the valuation and therefore the tax is not based on market value, but these days in Spain it can be disproportionately unfair since the valuation can be over twice the actual transaction value.

Dick Dasterdly

I got touched with it once for a few pesetas a long time ago.
Didn't amount to much back then compared to what I eventually made on the property itself.

However I can imagine the authorities seeing it as a nice little earner right now the way things are and some folk getting badly bitten.

Yet another case of "Let the buyer beware",...... of all possible implications.

amideislas

Well there's a lot of stuff you seem oblivious to. But a lot of people don't live in utopic fantasy. That doesn't make them lesser than you. But you seem oblivious to that, too. Sigh...

amideislas

I reckon in a tax-obsessed environment, they have to assume you're cheating whether you are or not, so to be fair, just penalise everyone for it. For the common good, of course.

No wonder tax collection is so challenging.

Fred James

It's much easier if you can work on the basis that the accused is guilty until proved innocent.

I just bet the CPS in the UK would go for that with all these high profile sex cases!