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am i being screwd by my solicitor

Posted: Wed Jan 26, 2022 8:37pm
8 replies301 views4 members subscribed
Darren 76

Posts: 14

Joined: 2 Feb 2020

good evening everyone im about to purchase property in San Miguel the End of February and got a not so nice suprise in the break down of fees from my solicitor mainly the transfer tax i know its 10% of the property price but today got told its the catastro price which is 35,000 euros more than im paying for the property does anyone know if this is correct

Cheryl

Posted: Wed Jan 26, 2022 9:56pm

Cheryl

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Joined: 8 Jun 2017

Posted: Wed Jan 26, 2022 9:56pm

Did you get a bargain? If so, the Spanish tax man wants his share.
https://movetomalagaspain.com/complementary-tax-spain-do-your-calculations-dont-get-caught-out/ 

Bear in mind this is about Malaga, in Valencia the rate is 10%.
I'm guessing you've got yourself a solicitor who is being up front with you rather than letting you pay it futher down the line.

Edit: You can challenge the valuation but this costs more money and no guarantee of success.

killjoy

Posted: Wed Jan 26, 2022 10:54pm

killjoy

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Posted: Wed Jan 26, 2022 10:54pm

Hacienda rules that the taxable amount is the higher from a. the actual paid amount, b. the cadaster value, c. the so called "average market value". As I see it, an appeal would have no success and cost extra money.

Darro

Posted: Thu Jan 27, 2022 10:02am

Darro

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Posted: Thu Jan 27, 2022 10:02am

Cheryl is correct and many have been caught out by this sometimes years after the purchase.

Cadastral values are updated infrequently so do not necessarily follow fluctuations in the actual market.

It can be challenged but town halls will fight it as one agreed devaluation could potentially open the floodgates costing them a fortune.

Darren 76

Posted: Thu Jan 27, 2022 11:14am

Darren 76

Original Poster

Posts: 14

Joined: 2 Feb 2020

Posted: Thu Jan 27, 2022 11:14am

Wow so as cherry said I got a bargain, but did I really, I suppose even paying the extra 3500 in taxes I did but wow some crazy law

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Kimmy11

Posted: Thu Jan 27, 2022 5:13pm

Kimmy11

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Posted: Thu Jan 27, 2022 5:13pm

Darren 76 wrote on Thu Jan 27, 2022 11:14am:

Wow so as cherry said I got a bargain, but did I really, I suppose even paying the extra 3500 in taxes I did but wow some crazy law

Hi Darren,

Complementary Tax was introduced because property sellers and buyers in Spain were reducing their tax liabilities by falsely declaring a sale price that was, in some cases, much lower than the price actually paid (with an envelope of cash being passed from buyer to seller "under the table"!).  So while it may seem crazy, there is method in their madness.  Properties in Spain are supposed to be revalued every 10 years, but in reality it's usually a sale that triggers the revaluation.  This means that a lawyer may take a view at the time of purchase about the likelihood of a buyer being charged Complementary Tax.   If you don't pay it now, you would have to sit tight for 4 years in the hope that the authorities don't pick up that you paid significantly less for the property than the official valuation.  If you were charged retrospectively, there's a possibility that you could appeal the charge - not the tax itself, but the calculation used to arrive at the amount owed.  These appeals have to be lodged within 1 month of the tax being levied and are usually successful if the Town Hall has used an out-of-date multiplier.  However, that's a lot of "ifs" and €35,000 is a large discrepancy, so it's probably just as well to pay it now.

Kind regards,

Kim

Ronzeus

Posted: Sun Jan 30, 2022 7:06pm

Posts: 3

2 helpful points

Joined: 11 Aug 2020

Posted: Sun Jan 30, 2022 7:06pm

Hi Darren,I had the same with an apartment a real bargain.Not my first purchase in Spain so I did expect to pay more  You probably have a good and helpful solicitor.

Darren 76

Posted: Sun Jan 30, 2022 7:23pm

Darren 76

Original Poster

Posts: 14

Joined: 2 Feb 2020

Posted: Sun Jan 30, 2022 7:23pm

Ronzeus wrote on Sun Jan 30, 2022 7:06pm:

Hi Darren,I had the same with an apartment a real bargain.Not my first purchase in Spain so I did expect to pay more  You probably have a good and helpful solicitor.

Thank you Ronzeus

Ronzeus

Posted: Wed Feb 2, 2022 3:54pm

Posts: 3

2 helpful points

Joined: 11 Aug 2020

Posted: Wed Feb 2, 2022 3:54pm

Darren 76 wrote on Sun Jan 30, 2022 7:23pm:

Thank you Ronzeus

You've welcome Darren, good luck

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