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Valour / Castral charges: Buyer beware!

Valour / Castral charges: Buyer beware!

Old Oct 24th 2012, 3:33 pm
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Default Valour / Castral charges: Buyer beware!

A word for all those who are buying / thinking of buying in Spain! Having completed the formalities in May this year, the Tax (Tributaria) people have reviewed matters and a demand for nearly 3000 euros has hit me as they simply think I did not pay enough (or declare enough) for the house. Basically, they do not give a fig about the current market conditions and have valued a house off the Castral register,based on its price 8 years ago and 'market growth' (what growth???)in their opinion I SHOULD have paid much more, so have whacked me with the tax for the balance!!!! And no, I did NOT under declare the house by a stupid amount!!!!!

This is obviously a new way for the destitute Spanish Government to cash in on Foreign buyers (except I am no Russian millionaire!). The grounds for appeal involve an inspection by a Government Agency and valuation, if the furniture came with the house (it did) thats in there as well as they have you all wrapped up! I HAVE TO PAY FOR ALL OF THAT AS WELL!

Rather than appeal, I have challenged and made an offer via the Solicitor in Albox, so watch this space. They require payment by the end of November, but I have asked for instalments!!! If you don't ask, etc.

This appears to be a new tactic, PM me if you think you may be affected and I can help or if you have any tips, lets all have 'em!!!.
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Old Oct 24th 2012, 3:37 pm
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Default Re: Valour / Castral charges: Buyer beware!

There's nothing new about it. I had this problem back in 1984.
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Old Oct 24th 2012, 3:40 pm
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Default Re: Valour / Castral charges: Buyer beware!

Poor you! I guess it's part of the long term plan to phase out the long-standing practice of tax avoidance by under-declaring the value.

Out of interest, why do you think they are targeting foreign buyers, rather than all buyers?
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Old Oct 24th 2012, 3:57 pm
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Default Re: Valour / Castral charges: Buyer beware!

As I said, I did not 'greedily' under declare like some do! As regards the other point, I think the facts speak for themselves at the moment!!!
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Old Oct 24th 2012, 4:00 pm
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Default Re: Valour / Castral charges: Buyer beware!

Originally Posted by lurchio View Post
As I said, I did not 'greedily' under declare like some do! As regards the other point, I think the facts speak for themselves at the moment!!!
no they don't - it happens to Spanish people too
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Old Oct 24th 2012, 4:01 pm
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Default Re: Valour / Castral charges: Buyer beware!

Originally Posted by Pocaloca View Post
Poor you! I guess it's part of the long term plan to phase out the long-standing practice of tax avoidance by under-declaring the value.

Out of interest, why do you think they are targeting foreign buyers, rather than all buyers?
They aren't! - this is happening to the Spanish as well.

It was in the (Spanish) papers recently.
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Old Oct 24th 2012, 4:03 pm
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Default Re: Valour / Castral charges: Buyer beware!

Okay, point taken and all that........but is there normally scope to negotiate on the amount?
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Old Oct 24th 2012, 4:41 pm
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Default Re: Valour / Castral charges: Buyer beware!

Happened to us when we bought some bank repos in 1995. We paid up as lawyer advised hardly anyone ever wins and we would have to pay a high cost for valuation, lawyers fees of around 1000€, and deposit the money before. Be interested to know the outcome
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Old Oct 24th 2012, 5:14 pm
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Default Re: Valour / Castral charges: Buyer beware!

We were asked to pay €5000 extra. We challenged it. We had to get our own valuation which cost about €400 and valued the place at only €5000 more than we paid. We then had to get an independent valuation for which we had to pay another €400. The second valuation came out at more than ours but less than the government's initial figure. We ended up paying an extra €1880 in tax but got the second valuation fee back as we had effectively 'won'. So we paid a total of €2280 instead of the €5000 they had asked for.
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Old Oct 24th 2012, 5:22 pm
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Default Re: Valour / Castral charges: Buyer beware!

Thank you very much, big help.

I am still thinking about appealing, but feel that the loss versus the potential gain will be a close run thing in my case, given the really useful figures you supplied and the amount I paid for what is a beautiful house.

My Solicitor says that the amount is strictly NOT negotiable, but that it is possible to pay in instalments (she thinks). I have asked her to look into this.

Thanks once more.
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Old Oct 25th 2012, 6:32 am
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Default Re: Valour / Castral charges: Buyer beware!

Watch out for your bank accounts being frozen. Hacienda (the taxman) puts an embargo on your accounts (all of them) and can leave you in a very tricky situation.
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Old Oct 25th 2012, 8:30 am
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Default Re: Valour / Castral charges: Buyer beware!

We had an embargo earlier this year, it was for a supposed missed autonomo payment 18 months previously! It was for the missed amount and a fine, we had 10 days to sort the situation out, by the time the bank sent a letter informing us it was day 10 and the money was just taken, we had not intentionally missed a payment the social security said it was rejected by the bank, the bank say they never asked for it and we stupidly were not checking that regular payments were being made. We now keep on top of any owed money to the state. I am worried that for 3 and a half years we paid no castral, it has taken us the last 2 months to sort this out and we are now waiting for the paperwork to come back from hacienda and region to agree the casteral rate for the house. which we have been told may take a further 6 months... hope we paid enough!
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Old Oct 25th 2012, 10:45 am
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Default Re: Valour / Castral charges: Buyer beware!

Originally Posted by flotsum View Post
We had an embargo earlier this year, it was for a supposed missed autonomo payment 18 months previously! It was for the missed amount and a fine, we had 10 days to sort the situation out, by the time the bank sent a letter informing us it was day 10 and the money was just taken, we had not intentionally missed a payment the social security said it was rejected by the bank, the bank say they never asked for it and we stupidly were not checking that regular payments were being made. We now keep on top of any owed money to the state. I am worried that for 3 and a half years we paid no castral, it has taken us the last 2 months to sort this out and we are now waiting for the paperwork to come back from hacienda and region to agree the casteral rate for the house. which we have been told may take a further 6 months... hope we paid enough!
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Old Oct 25th 2012, 2:24 pm
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Default Re: Valour / Castral charges: Buyer beware!

You should appeal - our Spanish lawyer always wins these cases.
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Old Oct 25th 2012, 2:52 pm
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Default Re: Valour / Castral charges: Buyer beware!

Welcome to Spain.

Not at all unusual that it the assessed "value" is very different than what you paid for it. Most real estate agents can give you some idea what value they will actually assess it, as opposed to what you pay for it.

Due to rampant tax avoidance in this country (and frankly, lots of other Eurozone countries, too, including Germany), the strategy is to simply assume you are avoiding tax, and assess it at a higher rate.

It's been this way for a long time, actually. We consistently were required to overpay in Germany, too, even though what was paid and what was assessed were always entirely different things, with little evidence to support their assessment.

The German finanzamt (tax authority) holds a licence to take whatever steps they deem fit (and not necessarily through due process). They are the most powerful agency of the German government. It's the law... Pay or have your bank accounts frozen. Period. You can take it to court later, if you are naive enough and have lots of money.

Besides, Spain needs to get money anywhere it can. Like its German counterpart, it is increasingly stopping at nothing to get it.

If you buy a property, expect it to be assessed higher than what you paid, because naturally, you're lying. It's worth more, and we know it (even though you couldn't sell it at that price).

And by the way, it does seem to make a difference if you're a foreigner or a descendant of a native family with generations of history in the area. A German friend of ours married to a Mallorquin man from an old established family never gets socked in this way, and often pays less for everything, apparently just because of family name association.
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