PROPERTY TAX BILL APPEAL ANY USE!?

I would agree with mariedev that much of the Spanish property market "stinks !"Especially the "legal" aspects (so-called! Solicitors are often "in it" up to their eyeballs.) However, I have lived here for ten years and have a slightly different "twist" on the scandal. My house (which is nowhere near the coast) was valued correctly in the "Escritura" in that the price entered was the price that the seller received. So that was all in order ! Tax was paid correctly and so on.

The only problem was that this price was not the price that I paid !! As was pointed out to me by the furious seller who invited me for a drink as we left the notary. "The price you have paid is far, far more than the price I received." Too right! I paid no less than €30,000 more than he received. The solicitor (who was in cahoots with the agents) told me that this was "perfectly normal" and a means of "reducing tax" (as some correspondents have pointed out). Except that, in this case, it did not reduce tax but went straight into the estate agent's pocket (with, no doubt, a cut to the bent solicitor).  Needless to say, the agents were British and from the Costa del Sol; how they strayed up here to Granada, heaven only knows but, during the boom, they were all over the place. Anyway, the absolutely furious seller said "Your countrymen are all crooks ! They are mafiosi." Difficult to disagree, although I should have been the one to be furious since I was the one who had paid the money. 

I became aware that this was absolutely standard practice with British agents.It came about because buyer and seller never met and were ruthlessly kept apart by the agents. Often this was because English buyers do not speak Spanish but I do so that wasn't the reason.  No, as I was to discover when it was too late, we were kept apart in order that I should not know what price the house was actually being sold for !

The system was that the agent would ask the buyer how much he wanted for his house and, away from the coast, property prices were usually much lower than in the U.K. So the agent would work out how much he reckoned a British buyer would be prepared to pay and since even that figure would still be below U.K. prices, so everyone was happy so long as they were all kept in the dark. 

These people are or were crooks, pure and simple. No two ways about it. The difference between what the seller was asking for and what the buyer paid went straight into the Estate Agent's pocket, with a cut to the solicitor (who was a necessary part of the scam). No wonder they "got rich quick!" 

I have no idea whether this practice still continues; I am sure it does, especially if the British are involved. They flocked over here to "get rich quick" and fleece their fellow countrymen. I have met quite a few in my time and they all played the same game. Of course, since the bubble burst, many have gone bust, thank the Lord and the number of British agents has reduced substantially; I haven't seen any round here for some time now ! Just as well since I mighty be in prison for murder !! I should perhaps add that we are not talking about huge sums here: I paid €150,000 for a property worth €120,000. You can see that you do not need to sell very many houses to make a very nice living indeed. 

So, yes, it "stinks" and there are many other pitfalls for the unwary. My advice to anyone thinking of moving to Spain is "don't!"  If you are determined to do so, stick to Spanish agents and try and meet the seller. Avoid the British like the plague. Also, be aware that most properties "in the country" are illegal and can be knocked down without compensation. I can absolutely guarantee that this story is true and that this is how British agents used to operate and, very probably, still do.     

I would agree with mariedev that much of the Spanish property market "stinks !"Especially the "legal" aspects (so-called! Solicitors are often "in it" up to their eyeballs.) However, I have lived here for ten years and have a slightly different "twist" on the scandal. My house (which is nowhere near the coast) was valued correctly in the "Escritura" in that the price entered was the price that the seller received. So that was all in order ! Tax was paid correctly and so on.

The only problem was that this price was not the price that I paid !! As was pointed out to me by the furious seller who invited me for a drink as we left the notary. "The price you have paid is far, far more than the price I received." Too right! I paid no less than €30,000 more than he received. The solicitor (who was in cahoots with the agents) told me that this was "perfectly normal" and a means of "reducing tax" (as some correspondents have pointed out). Except that, in this case, it did not reduce tax but went straight into the estate agent's pocket (with, no doubt, a cut to the bent solicitor).  Needless to say, the agents were British and from the Costa del Sol; how they strayed up here to Granada, heaven only knows but, during the boom, they were all over the place. Anyway, the absolutely furious seller said "Your countrymen are all crooks ! They are mafiosi." Difficult to disagree, although I should have been the one to be furious since I was the one who had paid the money. 

I became aware that this was absolutely standard practice with British agents.It came about because buyer and seller never met and were ruthlessly kept apart by the agents. Often this was because English buyers do not speak Spanish but I do so that wasn't the reason.  No, as I was to discover when it was too late, we were kept apart in order that I should not know what price the house was actually being sold for !

The system was that the agent would ask the buyer how much he wanted for his house and, away from the coast, property prices were usually much lower than in the U.K. So the agent would work out how much he reckoned a British buyer would be prepared to pay and since even that figure would still be below U.K. prices, so everyone was happy so long as they were all kept in the dark. 

These people are or were crooks, pure and simple. No two ways about it. The difference between what the seller was asking for and what the buyer paid went straight into the Estate Agent's pocket, with a cut to the solicitor (who was a necessary part of the scam). No wonder they "got rich quick!" 

I have no idea whether this practice still continues; I am sure it does, especially if the British are involved. They flocked over here to "get rich quick" and fleece their fellow countrymen. I have met quite a few in my time and they all played the same game. Of course, since the bubble burst, many have gone bust, thank the Lord and the number of British agents has reduced substantially; I haven't seen any round here for some time now ! Just as well since I mighty be in prison for murder !! I should perhaps add that we are not talking about huge sums here: I paid €150,000 for a property worth €120,000. You can see that you do not need to sell very many houses to make a very nice living indeed. 

So, yes, it "stinks" and there are many other pitfalls for the unwary. My advice to anyone thinking of moving to Spain is "don't!"  If you are determined to do so, stick to Spanish agents and try and meet the seller. Avoid the British like the plague. Also, be aware that most properties "in the country" are illegal and can be knocked down without compensation. I can absolutely guarantee that this story is true and that this is how British agents used to operate and, very probably, still do.     

NR talking of crooks.  

Over thye year many, like you and your seller,  have signed Compraventas showing a lower Declared Value  than the price they were actually paying.  However, that is called fraud, so your post appears to be case of ‘the pot calling the kettle black.' 

"The only problem was that this price was not the price that I paid"     and a plea of guilty too ! 

 As a result of the Declared Value being less than  that paid, that does mean that the buyer and seller pay less tax and legal fees (notary fees too as that is based on the Declared Value)  at the time of the transfer and can mean the buyer will continue to pay less, in for example ‘second home tax.’  Of course it can also mean that when they sell, if the new buyer insists that the correct amount is declared, then the seller may have a much higher Capital Gains Tax to pay, as any increase in value appears higher than in fact it is.

In the case you describe, it was the seller who appears to have been screwed not you,  as you bought at a price you had agreed, but the agent mislead the seller as to how much that was.

As this is going off thread, I have sent a private message.

NR

My house (which is nowhere near the coast) was valued correctly in the "Escritura" in that the price entered was the price that the seller received. So that was all in order ! Tax was paid correctly and so on.

With respect it was not.   You bought the house for 30,000 more than was shown on the deed of sale paperwork. You did not buy it for the amount the seller received. Therefore, the amount shown in the sale deed was not the amount you paid, thus if was falsely declared and you paid less taxes and notary fees than you were legally bound to do.

Sorry there are  no excuses.    You cannot justify, for any legal reason,  showing a lower purchase price in the sale deed that you actually paid

 If you buy for say 100,000 and the agent's fee is 10,000  you cannot show 90,000 as the sale priced.  The sale price was 100,000. How much the agent makes, the notary charges, the solicitors fees, the taxes paid etc does not change the sale price.  i.e. what the buyer, you,  paid, that is the price which should be shown.

This message was last edited by johnzx on 04/03/2014.

hi ,

Just to let you all know , this is not happening to any of the Spanish citizens

us non nationals are as they see us (that is the Spanish administration) soft targets

and easy to fool believe me if the Spanish think you might be an easy touch they 

will go for it we hand over our money so easly compaired to the Spanish ,I am with

my Spanish partner for 10 years we have a two bedroom appartment bought in 2008

she looks after all our affairs and there is never anything like what the Government

is trying on with you, if the EU in brussels knew this was happening they would

outlaw this practice as they did about 5 years ago with the capital gains tax they

had it 20% if you are Spanish buy 35% for us I am Irish  it is now a level rate for 

us all including the Spanish they are ripoff merchants.

Hi bobaol,

Will you tell me please are you Spanish ?.

To: Mariedav

I am very pleased that you love Spain. I am 67 and have loved Spain since I was 15 - and it has nothing to do with the climate which, away from the coast, is bloody awful ! But I am surprised to hear that you think Spain is cheap ! 

Spain, sadly, is a member if the European Union of Socialist Republics and one of the main objectives of the EUSSR is to make sure that all Member States are as expensive as Germany ! It has to do this because it is an incredibly expensive organisation, a totally, unbelievably expensive organisation and it just can never, ever be cheap ! Nasty.perhaps, but never cheap ! It gets more expensive by the day. The European Union is the most expensive Monolith in the history of Mankind - and probalby the most useless !

I don't smoke but most Spaniards do (official figures say that 30% of Spaniards smoke; I would put the figure at 80%!) Five years or so ago, Spain's most popular brand of tobacco, Ducados, introduced Ducados Rubios in to the market, "Rubio" meaning "blonde" as opposed to "black tobacco." The price was €1.45. Brussels was apoplectic and forbade the Spanish Government to allow cigarettes to be sold at that price !

The Spanish Government, of course, was happy to comply ! Lots more tax! Ducados Rubios now cost 4.50. Still very cheap by British, French or German standards. But, in percentage terms. the increase has been absolutely massive! Around 250% - in five years ! Something else Brussels doesnt like - apart from Life itself- is the price of booze ! Well, much to the disgust of Rumpy Pumpy and his friends, wine is still cheap in Spain, generally cheaper than beer - or even water!  But not as cheap as it was ! Five years ago, a litre of the cheapest table wine cost 0.49 Now it costs 0.98. Still too cheap for the likes of Brussels but, in percentage terms, an absolutely massive increase ! 

In my opinion, although it makes it very easy for me to live in Spain, the European Union is one of the daftest ideas in the history of Mankind, if not the daftest idea in the whole history of Mankind (well, Nick Clegg likes it so it has to be a crazy idea !)  It seems to me that the European Union intends to make Europe Third World in order to pay Unemployment Benefit to the countless millions who have no jobs thanks to EU policies. 

Maria, let-s have our world back and our lives back.  .     

Bob good to see you again.

Spot on comment

Regards  John

In the UK, sellers and buyers rarely meet unless the estate agent leaves the viewings to the sellers. Nowadays estate agents carry out most of the viewings and all the legal stuff is done by conveyancing solicitors.  It is the Spanish corrupt system that allowed the English estate agents to get £30k more from the buyers than was paid to the seller. I wonder if any foreigh buyers of expensive London properties under report the selling price in order to reduce taxes.   After reading this topic I'm so glad I never bought property in Spain.  The homes I bought in the UK were not in such a high price bracket to attract any corrupt practices.

Caveat emptor or something like that.

It is utterly daft to suggest, as one contributor to this site (who had best remain nameless) has that the €30,000 swindle was deliberately not reported in order to save tax!!! The whole idea verges on lunacy ! The tax saved by under-declaring the €30,000 stolen would be €2400 or so I believe (assuming Property Tax at 8%). Would anybody, except a policeman, lose €30,000 in order to save €2400 ? I'd better not say any more or vent my fury any further or I might be barred from Eye on Spain. I have tried to reply to this lunacy several times but always break the rules!  

Would anybody, except a policeman, lose €30,000 in order to save €2400

As one Irishman to another.

You paid 150,000 for a property.  (Who got the money has no bearing on that).

On the paperwork which you signed it showed falsely that you had only paid 120,000.

Thus you paid tax on 120,000 instead of the 150,000 which you paid

Got it?  Now Paddy, please stop proving we Irish are stupid !

Why would you have to ask what price you have to declare? Isn't the price you declare the price you advertised, and sold for?

why is the coefficient different for almost every town in spain and why is there only 30 days to appeal as so many dont reside permanently.

they have 4 years to find you.

coefficient eg. 

marbella, malaga.valor cadastral x 1.2 

cocentaina, alicante.valor cadastral x 3.4 

This message was last edited by rusty196500 on 19/12/2014.

There are various factors which drive the coefficient, the methodology for which is set out in legislation. However, two of the main factors are the price of land and property and the date since the last cadastral revaluation. In Marbella it was 2012 whereas in Cocentaina it was 1998.