Dear All
On behalf of some owners - I have been making some enquiries regarding the procedure of selling on prior to completion.
It had been speculated that Evemarina would make a charge of 3% of contract value to deal with changing the contract into a 3rd parties name.
They then changed their mind!! and said that a 7% transfer tax would be chargeable.
This would have meant that any potential 'new' buyer would have to pay the accepted 7% VAT + a further 7% transfer tax.
I found this hard to believe - so have consulted my own lawyer - who in turn has spoken to someone at Evemarina legal department.
My lawyer advises that Evemarina are putting into practice - their own interpretation of the law. However - their interpretation is legal !!
Any ' new buyer' would be liable to pay vat on the profit made by the original owner of the contract.
So - if you purchased at € 154,000 and sold on to a new buyer at € 190,000 - this person should normally pay 16%VAT on the profit you have achieved - that is - 16% of € 36,000 - being € 5,760.
My lawyer said that he did not believe that a potential buyer would be prepared to pay this, so vendors must allow for it in their calculation for nett price.
If you are considering selling on prior to completion - please check with your own lawyer 1st!! I would trust my lawyer with my life - but his advise to me was only verbal - I have nothing on paper.
By the way - if you intend to complete, but plan to sell on once the complex is more established - good news - - Capital Gains Tax which stands at 35% for a non resident owner currently is to be reduced to 18% on 1st January 2007.
Kind Regards
Jean