Bought a cheap property in the last 4 years?

[IsThisForumStillGoingWow]

If you've bought a property at knock down price in the last 4 years be prepared for the Spanish taxman to come knocking...

Why that cut-price Spanish villa has a nasty tax surprise: Expats warned of extra stamp duty bill on homes bought over the past four years


http://www.thisismoney.co.uk/money/mortgageshome/article-2899519/Why-cut-price-Spanish-villa-nasty-tax-surprise.html

[IsThisForumStillGoingWow]

    Spanish authorities demanding more cash if they think Britons have paid less for homes than they think they are worth
    Extra tax bill can run into thousands of pounds
    Property prices in Spain have plummeted following deep recession
British expats who bought homes in Spain at bargain prices are being hit with shock tax bills because the authorities believe they got too good a deal.

The cash-strapped Spanish government is probing tens of thousands of house sales that took place over the past four years.

[decho]

Well if that's the case they're even more shortsighted than he Toris!

[Canary dweller]

hev, nice bit of scaremongering. Pigs might fly one day,but not on Fuerte.

[SheilaW]

This will be those cases where they suspect extra cash moved 'under the table'. It's a common practice in France and they crack down from time to time. Do you really think they're targeting Brits? I don't.

[bluefox]

you seem to be allway's quoting france, we're not in friggin france, has no one told yer ? 

[Ivemovedon]

How can they crack down on cases of purchase after 1 to 4 years?. How do you prove money was paid ' under the table ' now if it was not evident 2, 3 or 4 years ago?. Thats all it could ever be....suspicion. Bit like Jack the ripper enthusiasts coming to an identity conclusion 100 years after the event. If they couldn't name him then they sure as hell are'nt going to now.

What they can do though is use the usual Spanish sharp practices and tax everone who may or may not have avoided tax regardless of proof, if the purchase price was below a set level . But then the EU should make themselves useful for once and protect the interests of all EU citizens from nonsense like this.

As for targeting the cash cow Brits?.. it wouldn't be a big surprise to me if they did.

[Deso]

It seems it is not just Brits.

"Although the Spanish authorities have had the power to review sale prices for years, experts say the number of letters sent to expats and locals has soared since the financial downturn."

[Ivemovedon]

Power to review what exactly?  Are they saying a private owner does not have the right to to sell their property at whatever price they choose without purchaser investigation?. If so perhaps the estate agents ought to add that little bombshell to their sales prospectus.... along with a few home truths regarding rentals.

[SheilaW]

you seem to be allway's quoting france, we're not in friggin france, has no one told yer ? 

I had an inkling yes but thanks for the reminder. It's just that so often forumers here seem to think Spain is inventing these things just to get at the Brits. Most often it's the UK that's doing things differently.

[Ivemovedon]

'so often forummers here think Spain is inventing these things just to get at the Brits'

Not in my case. I think Spain is inventing these things just to get at the money.

It so happens that many Brits get caught up in it along with the other nationalaties. We are only normally bothered about what affects us, not the french or germans. You can't blame the Spanish for trying to claw in a few bob from immigrants and foriegn holiday home owners. Lord knows the Uk should be doing the same thing. There could be serious money made from purchases by wealthy Russians , arabs and Chinese. They are non EU and should be fair game.

[chrisandco]

When you buy a second hand car here, you pay tax on the "value" of the car as seen by the hacienda, not what you pay for it.
I assume, like in the UK, the "authorities", either local or national, put a nominal "value" on a property. For example, the annual IBI tax is based on the "value" as well as other things. I remember, when living in England, the out cry whenever the local authorities revalued properties for rating purposes.
Whether, like cars, the tax is due on the "value" of properties, rather than the purchase price, I am not sure. If someone knows the legal position on this, perhaps they can tell us.
If it is, it seems an almighty oversight to have been only taking tax on the purchase price. If they decide to do this retrospectively, there will be a lot of people who bought property at almost half price who will be in for a big shock.

[Tamkid]

All governments try it on, the British government are no different. The latest wheeze in our ENGLISH property market is  house builders selling new homes with a 155 year Lease attached Barratts/Persimmons for instance. The bsards get a Solicitor in their pocket who conveniently forgets to advise the buyer on the pitfalls of having a new home with a lease attached, they then sell the lease onto a "Fund Management" company as a long term investment without telling the buyer, its happened to thousands of new home buyers.The consequences are the poor saps who thought they owned the home, dont, they are only renting, they have to ask permission for (and pay in some cases) any modifications they want done to their homes, and pay an annual ground rent to boot.

Compared to the British Government and various UK bushiness's the Spanish are only learning, I'm sure they will catch up.

[IsThisForumStillGoingWow]

hev, nice bit of scaremongering. Pigs might fly one day,but not on Fuerte.

Sorry if you thought I was 'scaremongering' I just thought I was passing on information I had read... How people laughed when news first came about the Vv rental stuff (like it'l never happen in Fue)..that was scare mongering too?

[chrisandco]

I have just collected a document from a lawyer for a client. It is from the hacienda and needed a payment but for a different reason.
The document clearly shows a Valoracion Catastral. In this case it is around 330K. I know of similar properties that have sold for 250K. The lawyer also told me that the hacienda has always had the right to review paid tax for the last 5 years, they have not had the resources to do it.
On a similar note, a friend of ours has discovered that his pool never had planning permission. The ayuntamiento have requested the difference in annual tax for the last 5 years and a fee for the re-valuation.
As a resident here, I get tired of the criticism of the "Spanish authorities". If is not the Policia or the Guardia Civil, it is the bureaucracy.
As Tamkid says, it is no different wherever you are. The problem with Spain (and Portugal/Greece) is they have let the black economy go on for too long, ether because they didn't have the will to change it or lack of technology. Reality has now set in. They all have the will and the technology (they found the friend's pool by looking at Google Earth).
If you try and buy a new car here for cash (how do you think most of the big Mercs, BMW's, Porsches were paid for), they won't let you.
As I have said on other threads before, if you are living, working or own property here (whether you rent it or not) and don't pay the correct tax (or none at all), they WILL find you.

[Ivemovedon]

I find it hard to believe they are scouring google earth on the off chance of finding a pool that is unauthorised. Then having to find the address and owner and then unearthing the relevent documentation as proof.  I'd have a word in your friends ear that somebody who knows their business may have supplied the information. If it was me i'd be looking at a potential whistleblower in the company i keep although, if your friend didn't even know it was illegally built, its unlikely anyone else did either. Even in the UK where they have all but given up on the black economy, their will to chase tax is only driven by how cost and time effective it is to obtain it.  Theres still thousands working in Fuerteventura totally unknown to the tax authorities. And believe me others will still be doing it when we have long gone.

[calculator]

Actually, its part of the Catastral Regularisation process that started in the last 2 years. It's nationwide, but administered locally. For Fuerteventura, control comes from Gran Canaria.

Our village was processed over the last year and finally completed end of October. Earlier in the year, officials went around with "tablets" taking photos and notes, etc.

In my village almost every property had irregularities that required updating. Majoreros are reknowned for being nothing more than thieves and criminals. It's a shame that these people were allowed to "regularise" their situations as in most cases, properties have been illegally overbuilt in relation to plot sizes, etc.

Getting back to purchase tax. Again, it's nothing new. In 2012 Agencia Tributaria Canaria (which administers this tax) implemented the 2003 law allowing valor tasacion/fiscal valuation to be calculated by what ever means necessary to reflect market value of said property. They have applied the law retrospectively from January 2010.

It is important to note that the catastral value of a property is NOT used in this calculation. The majority of people/foro wrongly claim otherwise.

They target everyone and they are not targetting Brits or other foreigners. The process is controlled by Gran Canaria so the ATC in Fuerteventura will not be able to provide much help with matters relating to it.

[Ivemovedon]

If castaral value is not used to calculate if there is underpayment , what is?

In my experience the castaral value of a property was always underplayed by solicitors ( at least on new builds ) so your annual household taxes would be lower. However the downside was that when you came to sell it you would have a larger VAT bill. As properties increased in value over time, the difference between sale price and castaral value also increased making the VAT ever higher.

Nice to know there is no discrimination and they are after the Majoreros too.

[chrisandco]

Thanks for clarifying things, Calculator.
As you say, they have been delivering envelopes with required payments (my friend's pool included).
And they definitely use Google Earth as a guide. Of course they know the address, and therefore the owner.
Holierthanthou, this is nothing to do with a business: it is a private property.
It is also nothing to do with anyone "shopping" him. The authorities don't need the help anymore.

[Ivemovedon]

Still cant see the logic in it i'm afraid. They would need information that a particular property has a pool with no planning permission to make google earth a worthwhile proposition, as without it they would have to home in on thousands of properties that do have an authorised pool to find one that doesn't, and then check the documentation of every one of them. How would they know a property has a pool if their records show it hasn't, and why would they select that particular property for investigation unless they think there is a pool which shouldn't be there. It does not make sense .

I say this as your first post intimated that they use it as a tool to locate unauthorised constructions. Going round on foot with a clipboard and checking each properties existing facilities against what they legally should have is a different matter. But still very time consuming one has to say.

I only spoke of business in the context of illegal and unregistered workers. They will never eradicate it completely. Its going on in every country in the world as we speak. Theres no reason to believe the canaries will be any more successful in stopping it than elsewhere.

[chrisandco]

Sorry, but you are wrong.
When he received the notification, he went to the Ayuntamiento in La Oliva. They showed him the ariel photo from Google Earth and told him that was how they found his pool.
I know that some on this forum think that all the local people here are stupid but they are not, I can assure you.

[Ivemovedon]

No not stupid, but they could be accused of being slightly misguided on the odd occassion. If that was a one off case then i'd be inclined to say fair enough. If they are continually ploughing through google earth on the off chance of finding a dodgy pool though,they must have far too much time on their hands.

[chrisandco]

I didn't join this thread to have a long winded argument about whether the Ayuntamiento use Google Earth to locate illegal builds but to provide some helpful facts (not opinions) to make a positive contribution to the topic.
Having only lived here for 10 years, I obviously know little about the way things work here.
As you seem to know just about everything, you must have lived here a lot longer.
On this occasion, I bow to your greater knowledge.

[Ivemovedon]

How childish.You might have lived there for 10 years but we all have an opinion. I've been coming there for 12 years myself, had a house built in that time and have had to deal with every official input during that time, both efficient and spectacularly inept. I know many people who have lived there longer than you, of many nationalities, and i know what they think about the island and why.  Enough to see it works both ways.

You can bow to my greater knowledge if you like but you're wasting your time. A fact not backed up with proof is still only an opinion.We found that out some time ago with the rental situation.

[chrisandco]

You can have the last word - seems fairly normal.

[Ivemovedon]

ok thanks

[bluefox]

now now "girl's" put the handbag's away, the forum has been fairly friendly and constructive of late, don't do what a couple of other's have tried doing and spoil it.   

[Tatts]

After visiting a Lawyer in Corralejo last year re another matter I was told during 2013/4 there had been a Guardia helicopter believed to have been hired by La Oliva ayuntamiento was hovering and photographing property on Tamaragua regarding illegally construction of pools, wall, extensions etc.

There certainly was as it was seen by many residents here and no doubt when they get round to it the door will be knocking on some villas here with some extra tax demands.

You will be please to know the Bin police in the plain wrapper are still active on Tam!

[Ivemovedon]

Believed to have been. So no actual proof yet again. I get fed up with reading this they're out to get you claptrap on here. You would think fuerteventura was behind the iron curtain run by the secret police instead of a holiday island off the coast of Africa. As I said we had it al beforel with the rental situation. All the dire predictions came to not a lot in the end.Not resolved yet I know but not as bad a picture as painted by some on here .

Maybe the chopper was looking for fugitive renters.

And even if someone does have a dodgy wall or illegal swimming pool what should they do if they actually know about it?. keep quiet and hope for the best or go to the ayutamiento and have them tell them to knock it down or fill it in? If it was me I know what I'd do.

[bluefox]

that's it HTT, keep all yer paperwork in yer hand/man bag, ha ha !