Do I, or my buy pay tax on the furniture sold separately when selling my appartment.

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03 Oct 2015 14:26 by ossie1 Star rating. 36 posts Send private message

Hello, 

My apartment buyer is concerned that he may have to Pay tax on my furniture bought separately. He wishes to pay directly into my bank account. 

Will the the authorities see a €10,000 deposit and then come after us. All the furniture is second hand. 


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03 Oct 2015 17:37 by johnzx Star rating in Spain. 5247 posts Send private message

Ossie:    I do not know if it a fact, but when I sold my villa in 2002, the lawyer for the buyer told him that if he bought the fixtures and fittings, as an additional item, he would be liable to pay IVA on then separately, which was at a much higher rate than the IVA on the purchase of the villa. He decided to include everything in the purchase of the villa. 





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03 Oct 2015 18:19 by newworld Star rating. 937 posts Send private message

Is the buyer not doing this so he will pay less IVA on the purchase of the property less say he is buying it for 100k, but he pays you 90k though the books, 10k in your bank ( if does have you over ) and he pays like he says.10k saving on IVA 800 euro he would save on the deal. 





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04 Oct 2015 09:36 by longlegpete Star rating. 31 posts Send private message

I suspect the authorities would if they investigated see it similar to the way i view it, 10,000€ seams a lot for second hand furniture and may just be a way of everyone involved avoiding tax





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04 Oct 2015 09:57 by ossie1 Star rating. 36 posts Send private message

The €10,000 for the furniture is not unreasonable, it is very high quality and cost around €30,000 

it it is not a method to reduce IVA ...





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04 Oct 2015 10:01 by johnzx Star rating in Spain. 5247 posts Send private message

Neworld  Is the buyer not doing this so he will pay less IVA on the purchase of the property less say he is buying it for 100k, but he pays you 90k though the books, 10k in your bank ( if does have you over ) and he pays like he says.10k saving on IVA 800 euro he would save on the deal. 

The property transfer tax (technically not IVA) is I believe 4% whereas the IVA rate on furniture is I believe 21%.  So the buyer would need to be Irish (like me) to 'save money' by doing that !!!!

If the buyer and seller want to evade taxes then cash is king.  Just as it was prior to the crash in 2007.

PS Ossie. You posted at the same time as me.  It is I believe normal to include  the furniture in the price for the property.  As I said that will probably save the buyer 1.700 €  (21% on furniture  - 4% on property transfer)


This message was last edited by johnzx on 04/10/2015.


This message was last edited by johnzx on 04/10/2015.



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04 Oct 2015 11:04 by longlegpete Star rating. 31 posts Send private message

Taxes due to be paid by the buyer are between 8 and 10% depending where you are, Comunidad Valenciana is 10% at the moment 





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04 Oct 2015 11:33 by newworld Star rating. 937 posts Send private message

johnzx (The property transfer tax (technically not IVA) is I believe 4% whereas the IVA rate on furniture is I believe 21%.  So the buyer would need to be Irish (like me) to 'save money' by doing that !!!! ) 

 

  I dont know what part of Spain you are in to pay 4% on a previously owned property sales, but they must be selling like hot cakes at 4% ??? In Murcia its 8% on property transfer tax (technically not IVA) VAT call it what you like.

I sold a villa in Murcia 2 years ago 150k euro Fully Furnished if the guy had had said to me a few weeks later he wanted to buy the furniture separately ( which was worth about 10k ). I could i think of one reason, to pay less 8% tax.  ( NOT 4% )

And as for furniture being  21% IVA that might be the case on BRAND NEW AT THE POINT OF SALE, but when was the last time you met somebody who bought  2nd hand  furniture from who ever, a family member, friend, guy in pub, Then paid the tax man 21% (even a irsh man woundt that ) whould he ???

I

 


This message was last edited by newworld on 04/10/2015.



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04 Oct 2015 12:07 by lobin Star rating. 246 posts Send private message

Transfer Tax on real estate property is between 8 and 10% depending on the region.

Transfer Tax on movable property (i.e. furniture) is 4%.

If you separate the price into price of the property and price of the furniture, the buyer saves 4% on the price assigned to the furniture. (of course, if the buyer pays cash and the sale of the furnitures is not reported, the buyer "saves" the full 8% on that part of the price).

VAT is 21% on the sale of the furniture but VAT would never apply to a sale by a private person (not a business) of used furniture.





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04 Oct 2015 12:08 by johnzx Star rating in Spain. 5247 posts Send private message

Neworld.  Please read what I said in my post.  i.e.  I do not know if it a fact, but when I sold my villa in 2002, the lawyer for the buyer told him that if he bought the fixtures and fittings, as an additional item, he would be liable to pay IVA on then separately, which was at a much higher rate than the IVA on the purchase of the villa. He decided to include everything in the purchase of the villa. 

 

PS I will give you lawyer's email ,that he  who said it, email,  if you want to argue with him.





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04 Oct 2015 12:27 by lobin Star rating. 246 posts Send private message

Johnx, I understand it was the buyer's lawyer saying that, however,that information  is correct only if the sale had been subject to VAT.  VAT is applicable to sales by a company or a business and not to sales by private individuals.  The transfer tax is applicable to the latter and then the rates are 4% for movable property and between 8% and 10% for real estate property.





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04 Oct 2015 13:42 by johnzx Star rating in Spain. 5247 posts Send private message

Thanks Lobin for the clarification, but to be honest I personally have no interest in the subject. I posted as an input for Ossie

When I sold in 2001 (it was my last sale)  it suited my purpose that the buyer’s lawyer gave the buyer the advice he did. Without going into details it was when declared values were often less than actual sale prices !I 

 PS It has been pointed out to me in a PM by a very observant regular  poster, that I should have made it clear that I sold in early December 2001 and bought another property in late January 2002. I cannot see how that affects what I posted but there it is.


This message was last edited by johnzx on 04/10/2015.



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