Reclaiming PlusValia on a property sale

"Why doesn’t Spain just increase it’s tax rates and cut out all this scamming, ducking and diving."

Said it many times before: if Spain reduced certain taxes (such as transmission tax on property purchases) fewer people would try to dodge them (by underdeclaring etc.) and the tax take would likely increase and the cost & workload trying to uncover fraudulent practices would reduce. But I guess that's too simplistic?

Just to clarify with the OP: your lawyer wants an additional €1500 to reclaim your plus valia, on top of the almost €2000 already charged for doing almost nothing??

I agree with Brian, this could easily be dealt with at source. Unfortunately Spanish culture dictates whoever has the money in their pocket owns it. That leaves the usual situation of if you want money back that you are legally entitled to it’s ‘best of luck mate’’ attitude from the authorities. Go whistle.

What about lawyer's due diligence?....surely when a higher level ruling has been issued defining what is illegal going forward, then the conveyancing lawyer has a legal obligation at point of sale to ensure that this is complied with, do they not?

The trouble thereafter is that the local authorities appear to be challenging (appealing) this ruling at every opportunity, making it nigh on impossible to reclaim (adhere to the ruling), without further litigation.

So the real problem here appears to highlight that compliance with higher court rulings only appears to work when there is a TIMELY change in the accompanying tax law.  Catch 22 scenario is it not?

Perhaps Maria could clarify if this is correct, and identify if this is why, as things currently stand, conveyancing lawyers are not following this reclaim procedure through at source (i.e. at point of sale)?

Or perhaps I have misunderstood?

To assist, here's a relevant quote from this article posted back in May 2017 that was kindly provided by Roberto :)

http://www.larrainnesbittabogados.com/entrada.php?id=202

“Hang on, you just said that on selling at a loss you no longer had to pay this tax! This is as clear as mud!

The law has still not been amended. Spanish Courts cannot rewrite tax laws but may declare them null and void. Tax laws need to be formally repealed, redrafted and enacted by Congress. It may take a while until a consensus is reached on new legislation and is formally approved by all political forces.

In the meantime, town halls, despite all these rulings from Spain’s Constitutional Court, will continue to exact from vendors the plusvalía tax as if nothing had changed.

As I wrote back in March, town halls are heavily reliant on the plusvalía tax to finance their public coffers. Ruling or not, they will continue to demand this tax until a new tax law has been approved on the matter. Don´t hold your breath waiting.”

This message was last edited by ads on 10/01/2018.

Thanks for all the information, seems like maybe lawyers are also jumping on the band wagon and charging vast sums of cash to reclaim this tax, which in turn is fuelling the fire, making sure that everyone except the vendor gets a slice of the cake.

the purchase price of the property way back in 2003 was 165,000 Euro, so there was definitely no gain, but as others have mentioned time and time again, authorities will always find a way to flees those who can ill afford to be fleeced.

so getting back to my original question, will I be able to claim this tax back without a lawyer? If so what steps do I need to take ie modello forms etc etc. If my lawyer was going to charge me 1500, then I am assuming there is allot of work to be done, to get this money back?

Thanks again for all your responses

regards

Drew

Chief

With regards to recovering the Plus Valir.

I would try speaking to the town hall myself.  They may agree and repay you.  Not to do so would incur costs for them as well cost for you.

Ads, I don't see this (plus valia reclaim) situation as much different to the 3% retention against a possible capital gain, which then has to be claimed back if no gain was actually made, or the 3% was too much. It's easy enough to calculate prior to completion if there is a capital gain to be taxed, and then the correct amount of tax (or none, as the case may be) could be retained at point of sale - saving unnecessary admin, time, effort & expense by all parties involved. So explain the 3% retention to me, and I'll explain the plus valia situation  Simple explanation: This Is Spain.

Chief, there is no "modelo" to file to claim back your plus valia, as the article I linked to earlier explains. You need a lawyer for this, it would appear, because you have to basically sue the town hall for the money they owe you. There is no way, IMHO, the town hall will even give you the time of day if you try dealing direct; they're never going to simply refund the PV because you ask them to! But my earlier question stands: what exactly did your lawyer do for the nearly €2000 he's already charged you? That seems an outtrageous amount to me, since selling involves very little work on the vendor's part really. I would suggest therefore, if possible, to speak to other lawyers to see if you can get a better offer. 

I assume that the purchase price of 165k, and the sale price (of 117K?) were the declared figures? Back in 2003, it was still quite normal to underdeclare the purchase price - and it does still happen now to a lesser extent. But if they were the declared prices, then clearly no capital gain has been realised, and you absolutely can claim back the 3% (using modelo 210) - but if your lawyer hasn't submitted the claim, I think you've missed the window of opportunity to do so (3 months from when the retention was submitted by the buyer using modelo 211)

Final word on the PV, although of no use to Chiefmissile now unfortunately: as a non-resident seller (and if you don't intend to maintain any ties with Spain and have a strong stomach for taking chances) you could simply not pay the PV; town halls probably do not have the facilities or funds to chase debts overseas, and will most likely try to tap up the buyer for the PV rather than pursue an absent vendor.

Ok, so it seems that I may have got it wrong, I should have been referring to the refund of my non residents tax being with held by Spanish tax authorities not PlusValia😊 I can prove that I am up to date with my taxes ( see my lawyers response below. So how do I go about claiming his back without paying a lawyer? Sorry for any fusion🙄

 

Non Residents Tax retention: Regarding the same please be informed that since the price you paid is higher than the price of sale, you can claim back to the tax offices the retention made on the 3% of the sale price, this is 3.510€, this amounts can be fully returned to you if you are up to the date on your tax liabilities in Spain, this is if you have paid your non- residents tax of the last 4 years.

 

The procedure can take up to 18 months, and you will be receiving directly from the tax offices the retained amounts to your account.

 

If not, you can still claim back this amounts but, the tax offices will be deducting the amounts to be paid under the concept of non-residents tax of the last 4 years ( around 777,16€ to be compensated with the 3% of the sale price retained).

 

In light of the above information, do you authorize us to claim on your behalf the 3% Tax retention on your behalf and if so to deduct our legal fees on the amount of 605€ (21% Vat Included) from the balance of the price to b

OK...I'm a bit confused now, because in your initial post you said your lawyer wanted €1500 to reclaim the Plus Valia, on top of the crazy legal fees already charged, but now you say it's not the Plus valia but the 3% retention you want to claim back, and that your lawyer wants €605 to do this? 

OK, let's forget the PV for now - as I mentioned previously, you can claim back the 3% retention using modelo 210 (the same form you use for your non-resident income tax). You do NOT need a lawyer to do this. You can probably do it yourself - there are clear instructions (in English) here. If on the other hand you'd rather pay a professional to do it on your behalf, most gestors will charge around €40 - €50 per person - it takes them about 5 minutes to do it !

BUT - as I also mentioned, you've almost certainly missed the deadline. You say you sold in September; the buyer had 30 days to pay the 3% in to hacienda (using modelo 211, the reference number of which you need) and then you had 3 months from the date they submitted it in which to put in your own claim.

SACK YOUR LAWYER IMMEDIATELY!!

😩

In a sane country / world, if the town hall will not give back to the 'seller' the Plus Vaila' (or to put it plainly, the money it has knowingly stolen fron the seller), surely the cost of the solicitor should be funded by the 'corrupt town hall'.

I am not  a fan of the saying 'this is Spain', I am sure the 'corrupt officials' rely on everyone thinking this way.

Surely for any progress to be made we should be saying 'this is Spain, SO WHAT', we demand to be treated LAWFULLY.

To repeat, the law does not appear to be in line with the constitutional ruling according to the article identified previously, which leaves the door open for authorities to challenge ....

So the real problem here appears to highlight that compliance with higher court rulings only appears to work when there is a TIMELY change in the accompanying tax law.  Catch 22 scenario is it not?

Perhaps Maria could clarify if this is correct, and identify if this is why, as things currently stand, conveyancing lawyers are not following this reclaim procedure through at source (i.e. at point of sale)? 

Also in the interests of transparency it would assist to know if a constitutional ruling can be consistently overridden ( not complied with) in this manner, would  this behaviour by the local authorities in any way be deemed to be in breach of "good faith" in the eyes of the judiciary? 

What legal challenges have been made to date in this regard to act as enforcement of the constitutional rulings and are authorities being made financial accountable to meet the FULL costs of any ongoing litigation?

Ads.

With any constitutional changes there is a requirement for the 'will' to change.  There seems to be a cloud of cover over the understanding of the law and no real will for change by the conveyance legal teams to make such changes.

When everyone around the transaction is set to make money on any mistakes or challenges, including town halls, lawyers, agents and the likes, how can anyone expect to reason with the system?

Exactly, Brian; and BigAl, at the end of the day, this is Spain, and trying to make a fuss and hoping to change deep rooted custom & practice, indeed the culture itself, is basically p...ing in the wind. When a lawyer tries to charge an unsuspecting foreigner €605 to fill out a simple form (which would take me, a layman, about 15 minutes to do) and send it to hacienda - a process which should have been included automatically (and in the allowable timeframe) in the already outrageous "conveyancing" fee charged, I feel there really is no hope.

Maria? 

Plus valia 

just in case some people are not aware.

following the death of my wife I had to pay €3061.00  plus valia as her 50% was deemed as being sold to me 

so,although the property stands at a 40%loss since purchase and it has not been sold I still had to,pay.

t 

Grae, was this because you didnt have a will or something, because people should become aware of the issue you had.

What would have happened if you did not have the funds to pay? And how do Spanish nationals go on in this situation, they are hardly all walking round with 3 grand hanging out their arse pockets.

They have 6 months to pay, and can ask for extensions or payment plans. 

And to think people in the UK rant about stamp duty & inheritance tax! Spaniards get screwed left right & centre, but it's what they're accustomed to. And why there's still a thriving black economy, which is why the Spanish govt. keeps trying to screw the taxpayers even more. If they just reduced taxes, I'm sure they'd find they get more.

Grae,  Are you sure that the sum you paid did not include inheritance tax ? 

If not then what did the other taxes amount to ?

http://www.daviessolicitors.com/wp-content/uploads/2014/11/Plusvalia-tax-when-you-inherit.-copy.pdf

Hi and thanks

there was no IT due

there were all sorts of other Charges of course but the amount paid to Casares council for Plus Valia Was as stated

So upon the death of a married partner ( if they are deemed  a joint owner of a property in Spain) , they will have a demand for plus valia , as this is deemed as a sale on 50% of the current property value? Is this correct?

Where does the assessment of loss of value come into this calculation? And if this was done after the constitutional ruling is this deemed an illegal activity on the part of the local council?