Confused house price - Page 4

Hi Ray we paid the solicitor 84000 euros and that was the statement we got for the apartment at the said agreement price. Don't know why it's 2 grand short. 

An lost too Sue but you will be fine 

Sorry Ray asking price was 85,000 but got it for 84,000 but still don't know why the statement says purchased for 82,000. I'll look in to it one day. Agent said its just normal over their. Who knows happy anyway 

This happened to us too when we bought 5 years ago. We didn't understand it but it was normal practise in Spain so I guess no one thought to explain it in detail. Our bank actually did it without telling us till we asked.

It's a tax fiddle. If the seller sells a house for 150K and they purchased it for 100K they will pay tax on the 50K profit. So the lower that is the better for them. So they could for example change the selling price to 140K plus 10K "furniture". That way the seller will be taxed on 40K. 

In our case our bank handed over a cheque for the "furniture"

You will also save on the "stamp duty" as it'll be on 140K not 150K.

The risk as has been mentioned is if your house is sold at well below the market price, for example if it was sold for 100K plus 50K then the government could come after you for the difference. Not likely when it's a small amount within reason.

Also when you sell, your profit is based on your official purchase price. Nothing to lose sleep over I think. It's just how it works in spain.

Is you agent British.

I suspect the seller wants the difference in Cash so they pay less tax! I know that this is done especially when the seller in Spanish!

Hi Sue,

I completed today on my property purchase and thanks to all the helpful members of this forum managed to get the house legal and registered as it should be. I paid a little extra solicitor fees but it included a thorough architectural report on the house, outbuildings and the plans for locating the new septic tank so I can get the Habitability Certification. 

 Common practice around Mediterranean countries is to declare a lower selling price so that you will also pay less Transfer Tax (10% of selling price).

The other bills won’t be less, unfortunately. But the vendor also gets out of payingCapital Gains Tax in this way. As others have mentioned, you could possibly pay a fine  if they find that there is no reason for selling it at a lower price but generally it is not contested. The difference between your agreed price and the declared price will probably be paid, God knows how, to the vendors by the solicitor. I do not know how they get away with this practice but it is almost the rule!!!

Good luck,

Janice

Congratulations Janice, I was hoping you would let us know how you got on today so trust they left the roof!

As soon as I get some chairs, Ray 😂😂😂😂😂😁😁😁

Not sure yet Cheryl. Quite a story going on here!

First of all, the Abogado suggested I inspect the property just before signing. The owners wanted me to see the property before they moved out, 2 days before. There wasn’t much sense in that so I insisted for the evening before or the same day as our notary appointment. So 30 minutes before we left for the Notary’s was suggested. Finally I got them to agree on a time (Don’t forget this is all through the agency, not the vendors directly) and saw the property empty and got a few instructions for use!

They had removed everything they intended taking except for the chickens 😂😂😂.so they needed the keys to come back and collect the chickens.

At the notary’s we found they had forgotten their passports so we postponed the deed signing for just over an hour while they travelled to where they are staying temporarily to pick them up.

Luckily everything else went smoothly 😂.

House warming will be as soon as I get a table, as fridge and some chairs 😂😂😂

I’ll keep you all posted 😎🤞🏻💃🕺🏻👯‍♀️🍰🍻🥂🍹🎼🎤

Janice xxx