Bargain-hunters in Spain scooping up discounted property could be in for a nasty surprise as cash-strapped Spanish regional authorities hit them with extra taxes after the deal is done.
British buyers have found their purchases revalued upwards by provincial authorities, who are demanding thousands of euros in additional land registration tax.
In June last year, retirees Neil and Lynda Hunter bought a three-bedroom villa with pool for €400,000 in Mijas-Costa, on the Costa del Sol near Marbella. It had been on the market for two years at €475,000 and was being sold by a Briton who wanted to return to the UK.
The couple paid around €30,000 in land registry tax. But in October the Malaga provincial authorities declared the villa's true value to be €465,000 and demanded a further €4,800 (£4,000) in tax.
'This was a considerable shock and we are very upset,' says Neil, 63, from Cranbrook, Kent. 'The value of a property is whatever someone is prepared to pay for it, and this is extortion.'
The Hunters are especially indignant because, although they obtained a reduction in the price from the vendor, the discount was small compared-with the 50 per cent price cuts on some Spanish properties.
Their lawyer has advised them that a court appeal would probably fail and lead to more costs.
'Would-be buyers need to be aware that these stealth taxes can be levied after the sale,' says Neil. 'We were obviously aware that Spanish property has fallen considerably in value and were looking for a discount on the price. But we did not get an amazing bargain.'
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