fiscal tax

I'm struggling a bit to understand what you mean.

I assume you're talking about ITP (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados).

This is paid by the purchaser of second-hand property, and is based on the value declared in the purchaser's escritura.

If you buy a new property, then you pay IVA.

At the time we bought our house, the rate was 7%, but I understand that Valencia increased this to 10%.

You need to look at your escritura and see what the declared value is. If you haven't completed the purchase, and think the declared value is too high, then you need to talk to the solicitor about reducing this before you conclude the purchase.

A word of warning. When determining the amount to be declared in the escritura, the purchaser should ensure that they do not under-declare. Hacienda have laid down guidelines for the minimum value which they would accept – approximately twice the rateable value quoted on the latest IBI invoice for the property. Otherwise, if Hacienda deem that the value is too low, they will re-assess the property according to their tables of values, which may be calculated at the higher gift tax rate, and send a demand for the additional tax due. If the Tax Office over-assess the worth of the property, the onus is then on the Purchaser to prove otherwise, which may be difficult.

Hi Jim,

Thanks for your reply the house is not a new house my friend has owned it 14 years ago. My wife and i have purchased the house what we seem is a fair market value in this current spanish market.But the solicitor is saying that the fiscal value is £34,000 more so we have to pay more revenue. The fiscal value is £104,000 euro's but i said to the solicitor if i sold the house in 6 months for less than the £104,000 euros which they have stated would they pay the difference which they state the property is worth. The solicitors said it does not work that way.

what i am curious of is that we have up to apparently 4 years to pay this if we choose or          interest could  be accrued at what % we dont know?

I really don't know enough to help you any more, so I hope someone else can.

If the value shown in your escritura is €104K, then that is what the tax is based on.

I thought the tax had to be paid within 30 days of the escritura date.

If you sell it and the buyer's escritura shows a lower value, then that will only help the buyer and not you. Because this wouldn't be an increase in property value, it just means you wouldn't pay capital gains tax on the sale, and unless things have changed in recent years, you can't claim back any tax for having made a capital loss.

If property prices rise, and you decide to sell and buy another property, then check what the current rules are regarding tax. If you sell before you buy, then you'll be liable for capital gains tax. You will probably still be liable for CGT if it's not your permanent residence or if you sell it in less than three years from buying.

Jim I think what Lee is referring to is the option to declare (for purchase tax purposes) the value of the house based on price actually paid, or to wait and see if the Tributaria chase (at a later date) any additional tax due because the property has a "notional value" which is higher.

I recently bought a property at a very similar price. My long time and trusted solicitor asked me if I wanted to declare the Valor Catastral (correct term?) or the price actually being paid. I declared on the price actually paid but had a tax bill in the post within 12 months. I'm led to believe that some local authorities are quick and efficient on chasing these down although some not so.

Not sure if that helps, but as I say, judging from Lee's question I'm fairly sure this is what he/she means.

edit to add, the price in the escritura should be exactly what the buyer paid. I know this was not sometimes the case in previous times (my first purchase in 84 was undervalued by 20%) but a reputable solicitor would not dream of undervaluing a property in escritura now)

Hi All thanks so much for all your replays,

The solicitors have replied to me and said 

The additional money which the fiscal valuation is £3400.00. Should be paid within 30 days after completion but it is down to the tax office to ask for this and it could take up to 4 years after that it expires.

But interest could be accrued over that 4 year period. I'm wondering if it is worth just waiting for my bill to come through?

Best regards lee

I wonder if anyone knows what the surcharge on the debt is in year one (after the 30 day period)?

ie if you opt not to pay in year one and there is no surcharge, there is no risk. I can't recall exactly, but I think the surcharge in year one is 10% so if that is correct you would pay a further 340 when you actually settle it, assuming they do catch up with you.

I believe the surcharges gather pace as the years progress. Choosing not to pay now is not considered in the same way as not paying a tax bill at HMRC at home. ie you're not branded as an outlaw for not paying immediately!

But actually your solicitor should provide this information free of charge. Also, beware - if you do not know this solicitor, is there any guarantee they will pay the money over for you? It might actually be safer to wait for the Tributaria bill to come direct to you, then go down to your bank and pay it directly to the Tributaria bank account so you know the money has reached them. That's what I did.

As I understand it, it's the buyer's responsibility to submit the Modelo 600 within 30 days of purchase date. If you wait until you receive a bill, then I'm sure this will include a surcharge for late payment.

It's very much your choice as to whether to get it over with at the outset, or wait for up to four years for the taxman to catch up with you.

Incidentally, you could play with this webpage to try and work out the property value:

http://csi.ha.gva.es/kiosko/valor_bien_urbano.principal?el_idioma=CAST

Reading your last post Jim it would seem the first surcharge kicks in immediately after that 30 day window.

Hi All,

It appears that the remaining fiscal duty owed could be billed to me at any period between now and 4 years, which ever suits the fiscal department I hope any 

interest billed to me is at a sensible rate.

lee