Selling off plan tax??
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Hi everyone, I have made all stage payments and tax's on the 30%, the apartment is due for completion of June 2008.
Now I have had a break down of costs from my solicitor pending an offer which includes a 7% tax, this will of course mean we will make a loss and it seems silly paying 7% on my initial 30% stage payments then 7% on the purchase price when I sell then the new vendor has to pay a further 7% on the new purchase price?? Not no mention the solicitor fees agent fees and stamp fees!
Any help / advice please we are really stuck
Many thanks
_______________________ -Simon-
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Si when you are buying off plan you pay tax on the whole purchase price by law (IVA/VAT). There is also a 1% stamp duty tax on brand new property if you are the first person to take possession. You do not pay 7% IVA on the 30% deposit and then a further 7% on the overall purchase price.
If you sell on prior to completion or even when you sell post completion the buyer has to pay 7% transfer tax to Hacienda. This is the law and effectively these days no way round it. In the bad old days developers would simply tear up a purchase contract and issue a new one in the end users name but the tax office have been aware that off plan investors were not meeting their tax liabilities and it is now fairly strictly enforced. If you do not complete on the purchase the 1% Stamp Duty is only paid once by the first person to take ownership of the property.
_______________________
Smiley - patrick@marbellamortgages.com www.marbellamortgages.com www.comparetravelcash.co.uk
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Thanks Smiley, as always very helpfull.
The main point that concerns me is that when I sell pre completion I have to pay 7% Transfer of ownership tax based on the purchase price which is rather a lot!
Thanks again
_______________________ -Simon-
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