Sterling account?

Hi

I am just in the process of reserving a phase 3 appartment. Does anyone know if it usual practice in Spain to pay IVA tax on the deposit and stage payments? Corvera are asking me to pay this 7% tax on initial deposit and the staged payments

Liam

Yes, this is normal practice.  Have a good research into all the additional costs of buying in Spain eg IVA, stamp duty, legal fees and leave at least 10-12 % of the purchase price available to pay them.  Furnishing the property will take about another 10% after completion.  This is all based on my experience in Roda -not cheap!

It is a normal practice...we also paid VAT!!

Bye!

 

This message was last edited by joe1 on 10/2/2007.

Hi!

Every bill or invoice in Spain should add IVA, even deposits. In case they give you an invoice you will pay VAT.

Cheers!

This message was last edited by joe1 on 10/2/2007.

Dear AEC

Yes you do have to pay IVA on the stage payments. The developer has to declare to the tax authorities each staged payment and hence the IVA will be listed in their quarterly tax return which they and every other company that is IVA registered has to pay every quarter. Am not sure where joe gets his info from but i suggest he checks his sources before handing out this misguided information.

It can be rather frustrating as this forum is unmoderated to this respect, so questions like these are best left to your agent whom you bought through or the legal team that you are using for your purchase.

Hope this helps

Hi robbiejb

I agree with your comments, i think that there may  have been some confusion between a one off deposit and stage payments.

regards dave

This message was last edited by joe1 on 10/2/2007.

hi everyone who may be remotely interested in this thread

Some scare mongering comments have been made which are quite frankly a load of old bull ... i say this because the last post was aimed at alarmism from someone who obviously has no idea of Spanish tax law and needs to have a quiet word in the ear of their financial advisor. Am not sure how they have bought their previous spanish property of which they claim to have a few but here goes anyway .....

When a purchaser makes stage payments to their developers, those payments do always include VAT. Builders and promoters, do have the obligation towards the tax authorities to submit the VAT retained to the clients to them quarterly ( every three months). And if they dont they are breaking the law.

There was a further point about the developer going bust ...

A. If there is a bank guarantee issued, they would recover all the stage payments.

B. If there was another builder taking over, I would assume that the new builder would just be asking for the final payment, wouldn´t he? Because, if he was asking for the full price, we could justify the funds paid so far. If he persisted asking for more money, we would sue them, since we would have a binding contract.

..... so i think that covers that

I shall continue

And yes the first promoter developer has to pay the tax it is fundamental Spanish tax law (am quoting from the last post so so might have to refer back there to understand what is being said)

got a grip (again refer to last post)

The payment of tax on purchasing a property is again a fundamental tax law which is dealt with at the notary while signing for the escritura (did i spell that right) where you transfer the title deeds into your name and is built into your Spanish mortgage or explained to you should you be purchasing with your own funds. Your fiscal number is required by any non Spanish resident purchasing property here in Spain and, correctly stated, is not required until you sign for the title deeds (although is a good idea to get it a few months before ... just for piece of mind)

Every solicitor agent worth their salt will instruct you to do this (again refer back ... ) as it is the law.

Joe ... i am so well informed ... i run a business here in Spain and it is my responsibility as a director to ensure my clients receive the best advise and adhere to the laws of this country ... otherwise they would lead me away in chains.

Refering back to the original post in this thread, you were quite correct to pay your IVA on your first stage payment and your developer will be paying said IVA to the Spanish tax authorities as they have to submit the factura of payment they gave to you as a receipt for monies received. And i mean they have too ... no such thing as a red reminder here in Spain.

One piece of solid advice if you are buying off plan , always insist on a bank guarentee .. and get your lawyer to check it ... and never pay any stage payments to your agent ... do it through your lawyer or directly to the developer (your legally binding private purchase contract) ... ok so that was two pieces of advice ... sorry i just got carried away.

Again as i said in my first post this sort of discussion is largely unmoderated .. and great thanks to the EOS team ... because without this it would be impossible to get the correct info over to the members here in eyeonspain. It is a fantastic forum and i believe ... well mostly in this case ... is very imformative to the members and gives them a good insight into purchasing their dream hoime here in Spain.

Robbie

This message was last edited by joe1 on 10/2/2007.

I believe Robbie is right. From my experience of buying 7 properties so far in Spain this has always been the case.  You get people who like the sound of their own voice in every walk of life and in my experience they are usually talking shi*te.

 

 

This message was last edited by joe1 on 10/2/2007.

Here here AEC

If joes right that means i can stop submitting all my facturas every quarter that'll save me a bundle on my IVA bill, the Spanish tax man is just gonna love me.

Robbie

I agree totally with Robbie as we have just been sent our contracts and payment structure which clearly includes 7% iva on all stage payments and on the outstanding amount at the time of completion. When i questioned my solicitor about this they were quite clear that iva must be paid on all payments. i hope this helps to clear the subject up.