Warning! much more than 10% ITP (tax) on a property in the Comunidad Valencia!

So you want to buy a nice house in the Provincia Alicante, Valencia or Castellon?
So did we.

You do your homework and figure out all the costs before you buy.
So did we.

Then just before you sign you (we did) stumble over:

Orden 4/2014, de 28 de febrero, de la Consellería de Hacienda y Administración Pública, por la que se establecen los coeficientes aplicables en 2014 al valor catastral a los efectos de los impuestos sobre transmisiones patrimoniales y actos jurídicos documentados y sobre sucesiones y donaciones, así como la metodología empleada para su elaboración y determinadas reglas para su aplicación.

And you read the horror story that somebody who just bought a 99.000 Euro bargain house now has to pay not 10% BUT 27% tax (ITP).

It takes you a while to figure out what this new law, what was passed in spring 2014, does mean for you.
So did it for us.

Here is the quick and dirty explanation and the link for you to check these facts for yourself.

Comunidad Valencia is broke, so where to get more money?

Easy, since we are taking a loss on every house sale since the prices are dropping so much (coming to a more realistic level but that is just the rest of the world thinking) we need to find a way to get more money out of this rich foreigners.
We jacked already the ITP to the max with our 10% but we need much more money.
Why don´t we take the value of the house (VALOR CATASTRAL) and multiply it with a coefficient to make up the the differences when last the value was determined.

If the value is higher we take that, if it is lower than 10% we take the 10%

STANDING OVATIONS
(This will so backfire when the potential buyer learns about that.)

So you can not trust your real estate agent, you lawyer or your notary when they answer you that there is a 10% ITP on your future house, condo, flat etc.

This guy did and here is his final bill - what he appealed and guess what - right , lost!
(see link at the bottom)

The end of this story is that my house ,would have been not 120.000 Euro plus 12.000 Euro ITP but plus 21.590 Euro.
That is 18% ITP and neither the seller wanted to go 10.000 Euro lower nor we wanted to loose 10.000 Euro more for nothing!
So this is one of the first No sale No money for the clever people who thought of that.

Please educate yourself that this is all true and then help spread the word of this madness over all social media.

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OK use Google and search for :  524852-orden-hacienda-4-2014-de-28-feb-ca-valenciana-coeficientes-aplicables-en

Oh I forgot, when you buy your house flat etc they charge you the 10% everyone knows about.

... and then they have up to 4 years time to hit you with the rest.
and here comes the nice part, it gets taken out of your account and if you refuse or do not have the funds your new property gets taken away from you auctioned off to pay your debt. NO KIDDING!

Do you get the big picture ?

I did and I am not buying until this is revoked.
Because when they get through with this then the door is wide open to milk the people who have property in Spain.

Kudos goes to Graham Hunt and his: "Potential Bad News on Valencia Property Tax – Forewarned is Forearmed" post

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OK use Google and search for :  Potential Bad News on Valencia Property Tax – Forewarned is Forearmed

I'm afraid there is some bad news for you, this process applies to all of Spain. The Orden is based on national legislation, it's just that the coefficients are published by the regional governments. There are the same figures for Andalucia, Murcia etc. it may not be as drastic in each individual town (even in Valencia),  as it depends when the catastral was last revalued. Estate agents, lawyers and notaries are all fully aware of this process.

Another thing to watch out for is when a regional government offers you a reduction on this tax if you meet certain criteria. For example, Junta de Andalucia "offer" a reduction to 3.5% if it is your first home purchase, you are under 35 and use the building as your primary residence.

Then two years later they contact you to say that you don't live there (even if you do), and that you need to pay the full 8% plus interest as you haven't met the criteria of the "offer". You have 2 weeks to prove otherwise.

Also, on top of this, to rub salt in the wounds, they will also ask you to pay the difference between what you paid for the property and their valuation of the property (if you paid less).

What is really sad about this whole situation is that the Spanish economy will never recover whilst this behaviour continues. Stealing from citizens and investors is the worst thing Spain can do right now to get itself back on its feet.

I bought a flat in Punta Prima (Orihuela Costa) in May last year. The Valencien government valued it at nearly twice the figure I paid.

My Abogado persueded me that it was better to pay and re-claim rather than not pay and have interest and legal bills build up.

As I had seen comments in the freebe press from lawyers who beleive they can reclaim the money I returned to see my Abogado yesterday. He says that one claimant has had a ruling in favour but this is being appealed but there are others going through and he will be claiming on my and other clients behalf when the figure gets to three. He anticipates that this will be in June. He also tells me not to worry as we have 4 years to claim.

I hope he is right. But if you are in the same position get back to your abogado and ask him when he will be claiming on your behalf.

HAVING JUST READ THIS POST I FEEL TOTALLY DISGUSTED THAT THIS IS STILL HAPPENING IN SPAIN WHEN BUYING A PROPERTY.I HAVE HEARD OF THIS BEFORE.THEY ARE CHASING YOU FOR YEARS FOR EVERY EURO THEY CAN GET FROM THE BUYER.THE AUTHORITIES ARE MAKING UP THE RULES AS THEY GO ALONG.ALL ILLEGAL OF COURSE.NO WONDER THERE ARE STILL MORE THAN 200 000 PROPERTIES FOR SALE.THE WORD HAS SPREAD THAT PEOPLE ARE RECOMMENDED , DONT BUY JUST RENT.AND NEVER EVER BECOME A TAX RESIDENT AS THEY WILL ALSO SUCK THE BLOOD OUT OF YOU.THEY DISFEGARD COMPLETELY ALL E.U RULES.BASICALLY SPAIN IS BROKE IRRESPECTIVE WHATS BEING SAID WITH UNEMPLOYMENT STILL WELL OVER 20%. THE MONEY HAS TO COME FROM SOMEWHERE.SO THEY TARGET THE FOREIGN  UNSUSPECTING HOUSE BUYERS AND EXPATS.EMPLOYING ABOGADOS IN THE HOUSE BUYING PROCESS MOST OF THEM ARE NOT EVEN UP TO SPEED WITH THE LATEST RULES AND REGULATIONS AND FOB YOU OFF WITH ANYTING THEY CAN GET AWAY WITH. MY FINAL ASSESSMENT IS THAT THE SPANISH AUTHORITIES ARE STILL CORRUPT TO THE BONE.I HATE TO THIINK IF THERE WILL BE A BREXIT,THEY WOULD PROBABLY RETAX BRITISH HOME OWNERS OR IF THEY DONT PAY UP REPOSSESS THEIR HOMES JUST FOR NO LONGER BEING IN THE E.U .A WILD POSSIBILITY. I REST MY CASE HERE. BUT DONT HAVE NIGHTMARES.

HAVE A NICE DAY.---- HERBY

http://www.eyeonspain.com/blogs/costaluz/14769/legal-tip-1287-illegal-charges-by-tax-administration.aspx

We are going to see our Lawyer to sign the claim for a refund on Thursday.

Fingers crossed.

Will report on reaction.