claiming back 3% retention tax on house sale ,any recomendations to the following points?

Posted: Fri Jan 27, 2023 8:53pm

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Posts: 80

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Location: Albir

Joined: 14 Aug 2019

have been reading up on this as solicitors are dragging their feet in Albir ( it appears not many bother as non residents who sell are probably gone back to blighty and forgotten about ) .

I understand how its worked out purchase price and costs added , sale price and costs added if xxx small profit you can claim back.

3 questions for the knowledgable here!

1. When adding the total sales costs up can you add the 10% sales tax to the total sale outlay costs?

2. prior to sale we lived here 2 years NIE ect , becoming full tax residents 3 weeks after the sale yet sale went through as non residents hence we paid the 3% tax.

when reading up it says anyone livng here full time ,living in their only home is classed as a resident not non resident ,even if not full tax residents as yet?

3. one solicitor online stated exemptions from paying 3% tax include Job move or health related issues ( *the latter as we moved from a 3rd floor apartment,top of a hill to a single floor bungalow due to spinal mobility issues,stairs etc ) . how would we approach this?

interesting .......

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Posted: Sun Jan 29, 2023 2:55pm

Kimmy11

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Location: Formentera Del Segura

Joined: 8 Aug 2017

Posted: Sun Jan 29, 2023 2:55pm

Hi Albertto,

The BUYER retains 3% of the Purchase price of the property, i.e. including the 10% ITP transfer tax, and pays that sum to the tax office. The VENDOR of the property can then reclaim that amount, subject to any deductions for taxes still due, so the answer to your first question is Yes.

Regarding your second question, however, you have to be tax resident in Spain for a minimum of 3 years and have submitted tax returns for each year, otherwise you are treated as non-resident for this purpose and the 3% retention is made.

Finally, it's the Notary's responsibility to ensure that the 3% retention is separated from the sale proceeds, so if there were grounds for exemption, I would have expected your lawyer to have pursued it at completion and I would expect it to be grounds for reclaiming the entire 3%. It sounds to me that your first call should be to the lawyer who acted for you in the sale of your property.

By the way, I don't know what timescale you're expecting when you say, "the solicitors are dragging their feet", but it took over a year for our vendors to get the retention returned from the Agencia Tributaria.

Kind regards,

Kim

Posted: Sun Jan 29, 2023 3:43pm

Albertto

Original Poster

Posts: 80

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Location: Albir

Joined: 14 Aug 2019

Posted: Sun Jan 29, 2023 3:43pm

Thanks Kim,

I only SAY "Dragging feet" as I asked and they said they will look into it as opposed to this us where we are at .

There was no mention of the 3% last year or reasons to reclaim it during the sale or indeed we have had no contact except me deciding to chase it up .

As per the 1st question that would be break even on any profit and I knew nothing about the 3rd question I asked until this week, so health grounds I will put to the solicitor, although I mentioned reinvesting any profits made in a new main residence offsets the 3% ...solicitor said , I'm unsure, i will look into it.

But reason for hope from your comments, gracias!!