mofieldhouse

Does anyone know any useful info on this tax. I read the article in the CB news and it is called transfer tax. People are being asked to pay retrospectively.

missile

I guess you are non resident?
When you sell, the following will be deducted from the proceeds:
- 3% retention non resident tax(*):
- Retention for Suma 2011 and Urban land increase tax:

(*) Please, note that you are also liable to pay CAPITAL GAINS TAX from the sale of your real estate property. Capital gain tax rate is 19% on the profit of the sale. In plain words, the taxable profit is the difference between the transfer value and the acquisition value.

If your capital gains tax is less than the retention, you can claim back the difference.

snikpoh

If you are buying, then yes there is a 7% transfer tax to be paid at point of purchase (normally).

mofieldhouse

No sorry I may have misled you. I am resident and I am talking about the new law that the Valencian government have brought in whereby they tax you in retrospect because they say the price you quoted as buying for was incorrect (Black money for those who did it) and they revalue your house and charge you the difference!!

Mitzyboy

I'd be interested in official links as I heard nothing of this

snikpoh

Wow, if that's true it'll be very interesting to see how it pans out!

This seems like a money-making 'scam' by the Valencian officials. Who's to say what the correct figure was? Perhaps if they updated the Cadastral values a little more regularly, then these values could be used.

HBG

I can't give a definitive answer, but the Valencian authorities realise that catastral values were understated for years to reduce the seller's tax bill (black money).

I've paid it, as have most other people who bought years ago, it was how things were done.

I can't see how the authorities can now estimate what the real value should have been, but I'm worried. My escritura is a joke, but I suspect that I may stop laughing when Hacienda calls.

snikpoh

Yeh, me too. I have a number of properties and the many mistakes in the escrituras are laughable.

I was once told by our main Notaire that it doesn't really matter what the escritura says!!!


For example, the address of some flats I have bear no relation to what they are known as to the cadastral or to the town hall. I tried to get this fixed but I couldn't get a common agreement.

whitelinen

I wonder if the OP is confusing this with the additional tax that is payable if Hacienda consider the buyer paid too little. Maybe the OP is thinking of selling and wondering if they can find anyone stupid enough to pay them black money if the original declared value on their own escritura is very low and at the same time risk Hacienda coming to the buyers for this additional tax?

Domino

That is what I have heard about - the recorded sale price being low whilst paying the seller a sum "under the counter" or in a grubby white envelope.
Whats called tax evasion (or is it avoidance) in the UK.

If the hacienda did look into house sales in that depth, is it an anti-expat (any nationality) thing or across the board, as I assume the odd house sale may be between Spaniards.

Does a house being advertised at 50% of the price it was 2 or 3 years ago automatically attract attention?

mofieldhouse

No I am not confusing it with anything! There is an article in The Costa Blanca news (last Friday). The article is called "Stealth tax" Seemingly what the Valencian government are doing is perfectly legal. Someone near me has had one of these retrospective transfer tax bills.
I looked it up on the internet after and found out that this is an idea other areas are thinking of adopting too!!!!
Sorry this is a bit doom and gloom.

HBG

I think that's exactly what is happening. Valencia is the highest indebted region in Spain and is trying to recoup taxes that should have been paid over the years.

Mine is a perfect example. I bought my house some 14 years ago. I employed a respected local abogado, had a respected local bank manager, bought from a respected local business man, and went through the most respected notary in town.

If I now sat back and said that they were all ****ing crooks, it would be true, but would expose my level of involvement too, because I'm not stupid.

I paid 40% of the transaction in cash, 60% is shown on the papers as the value I paid. I still remember the walk from the bank to the notary's, about a hundred yards, with a large brown envelope stuffed down the front of my trousers on a hot day. I remember a Spanish woman looking at me with startled eyes.

I saw that the president of the Valencian community, Mr Camps, has just been re-elected. He is also on bail awaiting corruption charges.

It's a funny world.

whitelinen

The problem now for most people who did this is that they withdrew the black money from the bank so there is a paper trail.

whitelinen

The article is actually entitled TAXMAN PROBE INTO PROPERTY SALES.

and goes on to say ......The taxman is rooting out illegal property deals....

It is not just Valencia it is all Spain!

Not stealth tax at all.........just the taxman dealing with fiscal fraud!

missile

It may prove difficult to locate sellers, I doubt authorities will pursue them. It will be far easier to target purchasers. Those who bought with black money to avoid tax may be asked to pay what they ought to have paid when they purchased and maybe a fine?

Another issue for purchasers is the "low" value on the escritura . When they come to sell, unless they find someone else prepared to pay black money, their CTG liabilty will be much higher i.e. on the "apparent" capital gain.