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Hi
I am looking for some advice regards what seems a very unjust situation. We purchased a 2 bed property on the costa calida in early March 2009. We had been a number of times and knew the agents well, prices had started to drop in 2008 so we thought they had bottomed out when we bought ours for €108 thousand euros plus all the additional charges and taxes.(We are now as many are in neagtive equity). We did not use any 'black' money as has recently been described to me. In Janaury this year we visited to do a winter clean and whilst there we recieved a letter each from the postman which turned out to be a bill each for €1700.We were obviously mortified. It was in Spanish but we assumed it was a mistake and took it to the town hall. they advised it was to do with when we purchased the property so we visited our solicitors whow we did the pruchase with.We were initialy informed it was a government tax as our property had been valued higher by the tax office. They said we could appeal and would send us details of costs. they contacted us the following day to say we couldnt appeal and must pay by the 20th janaury as the tax office had previously sent us letters. Again we visited the solicilitor as we have never had any letters and we couldnt believe they could do this. They agreed to get our tax file and advise (cost €90). They said we would still need to pay by the 20th January). We came home on the 7th January and started the proccess of selling one of the cars whilst we waited for any news. yesterday having paid the tax bill the solicitors messaged us to say they have found discrepencies in our tax file, they can appeal but we are not guaranteed we will win. The cost is €760 euro. We dont know what to do. the injustice of the situation wants me to make the appeal but on the other hand the €760 is a large sum of money we cant afford to loose. Has anyone won these appeals or has anyone any advice.
Regards
Jennifer
This message was last edited by jennifer on 22/02/2014.
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Hi Jennifer, Unfortunately I cant help but only say what our solicitor toldbus a month ago. In june last year we purchased a property in a small village in jaén which was at a very good price the owners dropped the price by 10k and we saw it and did the deal there and then. It was for 36k then on top was the fees and 8% purchase tax and we were told that if the local tax office thoughtbthe owners were "under selling" we may get another bill. We heard nothing till we went back in jan this year when we were handed a collection note to go to the post office to pick up 2 registered letter's which we did. It was a bill for myself and my wife for €600 each tax for the difference the tax man said we owe on the value we purchased the house for and the tax mans value. On speakingbto our solicitor she advised us we can appeal but the cost and likelihood of winning was not worth the bother, as its tge way the spanish government are trying to fill the deficit gap in there finances but when one of us dies or we sell the property the tax man has to use there figure which is now a good deal higher than our purchase price to calculate the death duties or capital gains tax which will be good as tge tax is small in comparison to the added value they have deemed the house to be worth Hope this is not to odd to understand because I dont fully understand it
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I suspect you would be wasting your money appealing. The AEAT are a law unto themselves. I am in the middle of a similar situation, and seem to be getting nowhere. Nobody wants to listen.
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I have bought & sold two properties in Spain over the last eight years, and no matter what low price they drop to I will never buy again, the tax system in Spain is a joke & made up as they go along, you buy a property a few years down then line the taxman says you bought a bargain and i want some tax, many people have not got a spare few ££££ to give him. Prices in the uk have also dropped over the years, in my home town some apts cost over 250k in 2007/2008 but now the bank have been selling them 90k ish, but you know HMRC wont be coming looking for 10k worth of stamp duty any time soon. I can see a lot of people having this problem on the polaris resorts over the next few years. many people paid over 150k for 2 bed apts now you can get them for 50k ish. the taxman will be looking for some of your good luck. Renting in Spain is next for me, just like many of the Spanish people are doing now.Even the Spanish know the system is bent.
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It's legalised robbery, plain and simple!
What do you think, Maria de Castro?
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Yes it certainly feels like legalised robbery. I have put January in the thread but it was the 7th feb and the payment was made on the 20th feb. Yes I've heard a few people say they are more recently being advised of possible extra tax when they buy a bargain say for 50k.But if we paid 8000 tax when we purchased for 108 in 2009 then what must they have valued it at now when they have taken 3400 off us. Also we got a Spanish mortgage and the bank valued it at 108. However I look at it, it seems so wrong. When we went over in jan 2009 the apartment we went to buy was sold the day before to a Spanish couple for 109.I asked the solicitor how they are choosing people she said they are randomly selecting people and we have just been unlucky. It really has tainted my love of Spain if we could sell tomorrow we would but unfortunately we would be lucky to get 80 for the apartment.we will have to stick it out until things improve and hope we gain on the capital gains tax, although can anyone see prices going up that much in the future?
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Hi Jennifer Yes we were caught as I said previously and forgot to add that our solicitor told us that there is no out of time period forthe taxman to claim we were just unlucky to be picked, BUT!! Watch out all others who hav bought or are about to buy and ppeople purchasing in maybe 1, 2, or even 5 years time the taxman will only get more aggressive and catch them the more their masters demand morevtax to fill tge hole. This will only get worse so when you buy look at what you would have paid say 5 years ago and put away 8% of tge difference just in case
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Hi Jennifer
I have sent you a private message regarding this.
Just to add to it.....we were told that the "new value" would now be the assumed "purchase price" so when we sold. there would be less capital gains to pay (indeed, if any, if we made no profit). However, on selling this proved to be untrue and we had to pay tax on the difference between our original purchase price and our selling price!!!!
So we paid 3,000E in tax on our supposed "profit", when they revalued our house, then we paid it again when we sold.
Why am I not surprised???
Carol
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Thanks for the personal message Carol it is pretty scary what they can do. And no we dont rent it out at the moment as we do mange to get over 4 or 5 times a year but it is always empty from october to March. On the link Juan sent it does state people have managed to get the bill reduced but to be honest it seems like a loose loose sitaution at the moment as most people say the case is never won.
Regards
Jennifer
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Hi so the solicitors have emailed today and said the appeal would be based on us nit getting the notifications. They say they have won appeals on this basis and feel we have a very good chance of winning. They said they can't guarantee 100 percent but say 80/20. Can we trust this bearing in mind we will have to pay them over 700 euro? Thanks
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As idenitified earlier in this thread, Bobaol identified the following in December 2013 in his posting http://www.eyeonspain.com/forums/posts-long-19072.aspx
“the Valencian courts have, just recently, ruled that these demands are illegal and it is the responsibility of the notary to ensure the correct price is declared on the deeds and that these claims from the Hacienda are to stop.
The solicitors say they will send me a copy of the ruling and I will post it on here when I receive it.”
Might it be worth therefore asking Bobaol if he has received a copy of the ruling yet, and asking your conveyancing lawyer if the correct price has been placed on the deeds. If not, might this be a case of lack of due diligence?
If relevant, would this be an argument to bring to a small claims court and is there the equivalent of a citizens advice bureau in your area to assist you in this regard?
Just a few thoughts!
Good luck.
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We always recommend putting in an appeal when complimentary tax is demanded.
I was talking to a friend just this morning, who recently visited his lawyer. The lawyer showed him a huge pile of papers, each one was an appeal against this tax, and he said that he won each and every case.
Personally, I think that as long as there is a significant percentage who don´t appeal, then the government will continue trying to impose this ridiculous tax.
_______________________
Claire
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Interesting to learn the Valencian courts ruled this practie illegal-would that apply to other regions too, as surely it cannot be illegal in one region and not in another.
In that case, surely if one received this demand, then it can be ignored, rather than paying it, go through the courts, maybe winning, but in the process, lining the lawyers pockets, paying out more than you get back
Maria de Castro-can you clarify, please.
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Our neighbours had a bill for several thousand euro. Initially, the solicitor said pay it but they went to another solicitors in Torrevieja who appealed and said that they had appealed many cases like this.
The request for payment was withdrawn once the appeal was lodged. Our neighbours had to show UK and Spanish bank statements to the solicitors to show only the money they had paid for the property was transferred. Still cost them 500 euro to the solicitor, though.
As an aside, this was on a villa that had been reduced from 330,000 to 220,000 and purchased for 200,000.
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As it's now illegal ,the Tax office cannot make you pay anyway!
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We also had a Complementary Tax declaration sent to us from our lawyer, 7 months after we purchased in 2009.
We had bought our apartment from a bank, so no black money involved.
He said we had 2 options; pay it or appeal for E150, then if successful, his fee would be E300. His success rate was 80% so of course we said to go ahaed and appeal! What he didn't tell us, is that the appeal would take a year and in the meantime, we'd incur penalties for not paying up. A year after the lawyer put in the appeal, he told us we had a negative resolution and would have to pay the Complementary Transmission Tax Liquidation plus penalties for that year it took to appeal...at the time I'd wished we'd just paid up and then saved ourselves a thousand euros in penalties..
My advice then would have been to pay up, now I'm not so sure, after reading on here about it possibly being illegal, I wonder will this open the floodgates and stop this daylight robbery. My neighbour was sucessful with his appeal, mind you he did have a great lawyer AND got his property valued and serveyed himself. At the time, I didn't know him to ask advice, but wish I had and known more about this.
If there's anyone who knows if this is also becoming 'illegal' in the Malaga province and whether you could argue the case after the tax has been paid, I sure would love to know!
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Thanks everyone for your replies it seems there is a bit of a divide on the subject of whether the bills can be won on appeal. We did actually pay the tax bill on the 20th feb 12 days after getting the bill. The solicitor did advise it would go up if we didnt pay it asap so we just came home from that lovley break! and sold one of the cars. As I said they want over 700 euro to appeal and have advised there is 80/20 chance of winning but i am now wary of how trustfull the law system is?
Once again thanks for the comments
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Don't forget the Plus Valia that the seller had to pay to the Ayuntamiento on the INCREASED value of the property. Gordon Brown and Ed Balls still have a lot to learn.
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I have only seen posts from British people on this point and it has also only been reported in the British newspapers. Has anyone heard of any other nationalities who have been caught by this?
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