IVA? When and how often is it payable?

Hi

Does anyone know if IVA is a once only payment?

I see that when my property is finished we have to pay IVA (at 7%?).

If we pay this and then later sell, does any buyer have to pay a similar tax?

Thanks,

Stewart

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IVA is payable on all new properties whilst on re-sale properties transfer tax is payable on the declared value at 7%. Unless agreed otherwise the buyer pays these taxes. However, when you do come to sell you should consider that these costs can be used to reduce any CGT liability that may arise.

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Just like to say, it's great to have another lawyer on here Glyn!

I have met you elsewhere, another forum................

We are so lucky on EOS to have professionals like yourself and Maria who are willing to give free advice.

Kind regards

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More questions about IVA?

Can anyone help? I have paid 7% IVA on my 30% deposit on a property in Peraleja. Now I want to sell it, I am being quoted sales commission + 16% IVA.

Are there different IVA's? Or am i being hoodwinked. If anyone could explain these to me it would be appreciated. Thanks.

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I believe there are different rates of IVA.

We paid 7% on our property deposit but 16% on our solicitors fees.

Noreen

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That's quite correct, IVA is levied at either 7 or 16%, depending on the product/service. For example when you buy foodstuffs at a supermarket, the IVA is 7%, but if you buy booze at the same time that carries 16% (I think I've got that right!) New property is taxed at 7% - unless it's commercial property or a garage for example, in which case it's 16%. Estate agents fees will be 16%. Somewhere there must be an explanation of this or a list of what tax applies to what circumstances, but I'm afraid I wouldn't know where to start looking.

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Another one!

If I sell my property before completion. Does the buyer pay me back the IVA that I have already  paid?

Stewart

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Should do, but I suppose it will depend on the specific agreement you reach. If for example you are "selling" it on at the same net price you paid (I hope not!), then naturally you will want to recoup the IVA already paid on the installments made to the promoter. Equally, if your "mark up" isn't sufficient to recoup the IVA you have paid and still make a profit, you will want the buyer to pay the IVA back to you. Personally I would expect the buyer to pay it, but there are many members here with their own experiences (both buying and selling) and it would be interesting to know what others think.

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Further to my previous post about the different types of IVA, due to a complete lack of anything else more important to do this afternoon, I can now tell you that there is a third category of products which carry only 4% IVA, those which are considered essentials, such as: bread, milk, cheese, eggs, fruit & veg, books, newspapers, human medication, wheel chairs, prosthetics and VPO housing (subsidised, like council housing)

In the 7% category you will find: food not included in the previous category,entrance to theatres, circuses, cinemas, concerts etc., funeral services, hairdressers, dentists, new homes & garages (up to 2 per household!)

In the 16% category are: electrical goods, clothes, shoes, household goods, tobacco, alcoholic beverages and just about everything else!

I hope this is enlightening! I'm now off to see if i can find myself a Googlewhack. (Google it if you don't know what it is!)

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