Withholding of Plusvalia tax by solicitors

I purchased a property in Costa Blanca North in January and the solicitor held back 2000euros from the Vendor to pay 'Plusvalia tax and other community Fees'  The Vendor is an elderly man who now lives in the UK.

I then received an e-mail from the solicitor saying the actual tax was 5100euro and could I contact the seller for the balance which was - 5100- 1500euro already paid.  On behalf of the Vendor I asked for a breakdown of the 500 euro costs.  He replied that he would give a breakdown of costs, but he would apply were 990 euro + vat.  He then stated that he was now charging 990euro (+vat) +500 euro and therefore all that was left out of the 2000euro was 331 euro to offset against PlusValia.

Does anyone know:

1 if Spanish Lawyers do this often

2 How quickly does the Vendor have to pay the tax.  Can we put a hold on payment until the problem is solved.  

3 Can I report the lawyer and if so who to?

I would be most grateful for any advice

Is there any trick they don't try?

I have never heard of this one before.

So from the EUR2,000 retention he is deducting fees of EUR1,668 to arrange the payment of plusvalia!

All you can do here is name and shame and tell the vendor to file a report with the colegio de abogados if this person is in fact a member.

No doubt you also paid this lawyer a sizeable conveyancing fee?

Sounds like yet another case of abusive practice that requires adequate consumer protection.

Yes the quote for the work was quite reasonable. However,other charges started to build up which he invoiced me before doing any work- which again you don't like but accept.  To actually give a cost, then because this is questioned you add an extra 990 euros, siting that this is what the Law Society allows, would not be accepted in the UK.

He's using the old trick of piling on the extras.

I'm forever telling people to insist on a clear letter of enagement that sets out the exact fee and if there are likely to be extras then what these will be and how much.

Did this laywer provide a letter of engagement?

It is quite normal in a purchasing conveyancing matter to have retentions but that does not mean the vendor is also his client.

The retentions are to protect his client (the buyer) and ensure all amounts the vendor should pay gets paid.

Where the seller is non-resident then the plusvalia tax is usually withheld. I would also ask this lawyer why he got the amount wrong as he should have checked the amount due.

Another retention is the 3% non-resident capital gains tax and he cannot charge for paying that over

Clearly this lawyer is taking advantage of the situation and for want of a better word trying to steal.

As far as I'm aware plusvalia tax should be paid within 30 days of the demand being issued.

But at the end of the day this is just typical behaviour of a greedy Spanish lawyer that's why I encourage you to name and shame.

Hi I have just been hit with a late payment fine from Hacienda because 6 years ago my bank did not make the retention payment ( I bought from an English non resedent) to the tax office within the 1 month limit, they waited 3 months before making the payment.  Now I am expected to pay 170€,  As the bank took charge of the retention in the Notary how can this be my bill?

Funny, I have just received a fine of 270 euro due to late payment.  This has added insult to injury due to the fact that the solicitor only sent the invoice to us 6 weeks after the purchase.

Spoke to someone about arguing with the Town hall, but was told that they are so short of money that they are grabbing as much off ex -pats as possible

I know where you are coming from but what the bank has done must be illigal, I didnt even see the money in my account, it went straight to the tax office, or thats what they told me´. This was BBVA and after several other issues with them I would say if you bank with them get your money out, how the hell can I be responsible for there actions.  It appears that the Spanish can make the rules up as they go.

All my dealings on this matter were thorugh BBVA bank, I have pressed them for a refund and the no longer answer my emails, what a farce, how much more can unprofessional be,  i no longer bank with this amature company,  If you have money invested with them move it before its too late.

Miffed:_

I have understood for more that twenty years,  that the Tax Authorities (Hacienda) can legally take any money, they say you owe, from your bank account.  

With your NIE (Financial ID number)  they can see ALL your bank accounts  in Spain and any other financial transactions, if the number has been used.  That why they ‘invented’ the number.

when we bought our apartment our solicitor witheld 500 euros

for plus valia tax, we changed to another solicitor who advised us

to write and ask for the money back, we did this and received

the 500 euros back after we had signed a letter to say that we were

now responsible for paying the plus valia tax. up to now we have paid

nothing as we still own the apartment.. this was over 4 years ago.

so does anyone know when  this plus valia tax is supposed to be paid!!!!!!!!!

Formentera

The Plus Valia is due when a property is sold. It is the tax on the increased value of the land upon which it is built and is paid to the town hall.

This also applies to apartments as each has a share of the land. 

It is 'normally' paid by the seller, unless there is an agreement otherwise.

If when you bought it it was not paid, then you owe it.