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Extra property tax when buying

Posted: Mon Dec 9, 2019 8:56am
8 replies209 views3 members subscribed
Paulharding

Posts: 7

Location: Orihuela Costa

Joined: 8 Dec 2019

Hi

I have just agreed to buy an apartment for 80k Euros in Cabo Roig. However, my solicitor tells me that the tax office value the property at £130k Euros  (a 60% difference!!) and I will need to pay 10% tax on that figure rather than the 80K.

My solicitor says that for 500 euros she can appeal this but there is no guarantee she will win.

My question is should I appeal or just pay the Tax. Has anyone successfully won an appeal against their propery valuation, if so how did you go about it?

Many thanks

Paul

LeckyLes

Posted: Mon Dec 9, 2019 9:28am

LeckyLes

Legendary helpful member

Posts: 2079

2230 helpful points

Location: Cabo Roig

Joined: 3 Aug 2018

Posted: Mon Dec 9, 2019 9:28am

Hi Paul, and welcome to the Forum.

In the past on here,this issue has been raised a number of times .

You should get various opinions and helpful advice ranging from experiences of agreeing to Pay, Appealing and Winning, Appealing and losing ,plus instances of people simply ignoring the demand and it never being followed up .

I suppose a lot depends upon your particular circumstances.

Maybe a second opinion from another Lawyer including their estimated costs in relation to an appeal .

LeckyLes 

Paulharding

Posted: Mon Dec 9, 2019 9:34am

Paulharding

Original Poster

Posts: 7

Location: Orihuela Costa

Joined: 8 Dec 2019

Posted: Mon Dec 9, 2019 9:34am

Thank you for your reply. 

Etna

Posted: Mon Dec 9, 2019 10:13am

Posts: 9

6 helpful points

Location: Gran Alacant

Joined: 22 Feb 2018

Posted: Mon Dec 9, 2019 10:13am

Hi Paul,

I bought two years ago and got a letter from tax office after the sale looking for this extra tax, i paid 70 for my apartment and they valued it at 100, my solicitor appealed it and won, she only charged me 150 euro.

Paulharding

Posted: Mon Dec 9, 2019 12:59pm

Paulharding

Original Poster

Posts: 7

Location: Orihuela Costa

Joined: 8 Dec 2019

Posted: Mon Dec 9, 2019 12:59pm

Thank you. Can I ask how long it took between your solicitor submitting an appeal and the decision being known? 

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Paulharding

Posted: Mon Dec 9, 2019 1:00pm

Paulharding

Original Poster

Posts: 7

Location: Orihuela Costa

Joined: 8 Dec 2019

Posted: Mon Dec 9, 2019 1:00pm

Thanks 

Kimmy11

Posted: Mon Dec 9, 2019 7:15pm

Kimmy11

Legendary helpful member

Posts: 6869

12554 helpful points

Joined: 8 Aug 2017

Posted: Mon Dec 9, 2019 7:15pm

Hi Paul,

When I read the first paragraph of your post, I thought you had a very proactive lawyer.  Then I read how much she wants to appeal a Complementary Tax bill that hasn't even been levied yet and thought, "Really?!" 

When this subject came up previously, I asked my tax advisors, Abaco, for a view on the likely success of appealing such a tax bill and their response was:

"The complementary tax in itself is valid. It is the authorities recent method of calculation which has had fault found with it by the courts, as happens every few years until the authorities update their calculation method again. As such, depending on what method of calculation was used, the tax demand may still be valid. If your friend's demand was indeed calculated based on the now invalidated method, but still received the notification for payment, they will still need to appeal the demand, as otherwise the already emitted payment document will still be applicable."

Your post seems to suggest that your lawyer has contacted the tax office to ask for the valuation they have placed on the property that you're planning to buy?  Whilst I believe it's a good thing that she has advised you of the possibility of this tax, it seems premature that she would proactively contact the tax office to ask for their valuation, thus drawing attention to the apparently discounted sale price.  In anticipation of receiving such a bill, you may want to get alternative lawyers' quotes for any appeal.

Kind regards,

Kim

finmar

Posted: Mon Dec 9, 2019 9:33pm

finmar

Helpful member

Posts: 116

124 helpful points

Location: Playa Flamenca

Joined: 17 Jan 2016

Posted: Mon Dec 9, 2019 9:33pm

I bought in 2015 and just over a year later received a notification saying my property was worth twice its value.  I employed a lawyer and paid 350 euros.  The appeal has to be done within 10 days of receiving the letter.  It took 1 year to process through the court but thankfully in my case I won. My lawyer said that the way they calculate value is complicated and completely irrational and is based on values not relevent to the market value of properties today.  I was asked to pay an extra 7800 euros in complementaria tax.  

Kimmy11

Posted: Mon Dec 9, 2019 9:58pm

Kimmy11

Legendary helpful member

Posts: 6869

12554 helpful points

Joined: 8 Aug 2017

Posted: Mon Dec 9, 2019 9:58pm

finmar wrote on Mon Dec 9, 2019 9:33pm:

I bought in 2015 and just over a year later received a notification saying my property was worth twice its value.  I employed a lawyer and paid 350 euros.  The appeal has to be done within 10 days of receiving the letter.  It took 1 year to process through the court but thankfully ...

...in my case I won. My lawyer said that the way they calculate value is complicated and completely irrational and is based on values not relevent to the market value of properties today.  I was asked to pay an extra 7800 euros in complementaria tax.  

Not quite, the timeline described by my tax advisors, Abaco, is: 

"When you receive the letter informing you about it [Complementary Tax], you have a chance to identify any major factual errors within 10 days and an exemplar form is sent so you can do this. Shortly after, you will be sent information about how to pay.  At this point, you are informed that you have one month in which to appeal. After this period is over, you no longer have grounds to appeal and you are expected to pay in full."

https://www.costablancaforum.com/area/formentera-del-segura-spain-54/taxes-suma-nie-tax-advice-in-formentera-del-segura-25/complementary-tax-little-known-often-misunderstood-and-can-be-expensive-58217/

Kind regards,

Kim

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