Buying a resale property - need my hand held!!

Hi Janice - I did read you post and it struck me as odd then, but I thought maybe that was a one off.  But when Bobaol also said that he paid black money to a developer I thought I would ask.

In the past we have bought two off plan properties on different occasions and black money was never asked for.  Looking back, the off plan process was much simpler than what we are going through now, but unfortunately we couldn´t find anything we liked/in our price range this time.

We actually handed our black money to the developer when they handed over the keys.  Apparently this also cuts down on the amount of IVA they have to pay.  When it's just us, the money we save works out a couple of thousand euros.  If they sell a couple of hundred properties they're making millions.  So yes, black money to developers was the norm a few years back.

Jerezgirl, seems you've done plenty of homework. One thing nobody has mentioned so far is to get a certificate from the community as well, stating that all monies are paid up in full on the property. (assuming the property is part of a community - I think you mentioned an "urbanization"?) One more piece of paper!

I don't have much to add about the "B" money thing, it's pretty much all been said here. Maybe you can use it as a negotiating point, i.e. we'll pay black money, but only if you drop your price a bit....

Good Luck.

Thanks Roberto.   The properties are on an urbanisation, but there are no community fees (no pool).  So that at least is one thing I won´t need to worry about.

Well, today we are off to see the agent to see if we can negotiate something.  Keep your fingers crossed for me!!

Anne

If you deal with a professional agent then you do not need to pay black money

This is going out of fashion fast because of money laundering regs after Madrid bombs

If you pay black money now you will end up having to pay extra tax later as when you sell it will no longer be around

** EDITED ** Please respect terms of posting

Hello - back again with another question!  This time about tax .

On a resale you property I understand that you have to pay a "Transfer tax".  I have read differing articles on this.  In some they say it is 6% and other articles say 7%.  Anyone know the definitive answer?

Also, just to confuse me a little bit, my bank has sent me a mortgage application form and they have included a simulation of all the expenses to be incurred in the sale.  I am okay with the Valuation fee, Notary fee & Land Registry fee.  But then it states:

"Impuestos de transmissiones patrimoniales y AJD" - 4,550 euros.

Is that the transfer tax?  If so, why is it so low?  By my calculations the transfer tax should be 14,000 euros (if 7%) or 12,000 euros (if 6%).

If it isn´t the transfer tax, what is it??????

Thank you!

PS - there definitely isn´t any community fees.  The house is part of an urbanisation, but we all have private gardens.  There is nothing to be maintained communally.

Anne

Hi Anne,

Transfer tax is normally 7%.  It was brought up to the same level as IVA some time ago.

IAJD is stamp duty, amount seems high as it equates to more than 2% of the purchase price - (you do not say what your mortgage amount is) but in any case stamp duty is not payable on the purchase when buying a resale!  only on the mortgage amount.

Also as far as I am aware all 'urbanisations' are subject to a community fee, however small.

Kind Regards

Sharon

sharon@tmasspain.com

Thanks Sharon

The mortgage amount is 171,000 euros.

Impuesto de transmissiones patrimoniales y AJD (compraventa) - 1900 euros

Impuesto de transmissiones patrimoniales y AJD (hipoteca) - 2650 euros.

Total = 4550 euros.

Does "impuesto de transmissiones patrimoneales y AJD" mean just Stamp Duty (in which case it is expensive) or is it both Transfer tax and stamp duty (in which case it seems too low)?

Thanks

Anne

Hi Anne,

ITP is transfer tax and AJD is stamp duty.    I think these figures are very confusing, as you are quite right in saying that the ITP should be 14,000 euros.

It is more difficult for me to comment on the AJD for the mortgage as this differs, depending on where you are buying.

I would certainly recommend you go back to the lender for clarification.

Kind Regards

Sharon 

sharon@tmasspain.com

Thanks for the tips re the tax, although I am now starting to wonder if it is all going to be academic. 

We have been trying to negotiate with the seller over the price of the house and the black money issue.  The seller has agreed no black money  but only if we pay full asking price .   Or at least that is what the agent is telling us.  I am actually not convinced that the agent has even passed our under the asking price offer on to the seller at all.  !!  I don´t think we are willing to pay full asking price, but how can I check if the agent has passed our offer on???

I´m beginning to wonder if we will ever buy a place at all.

Why the doubts, Jerezgirl? Do you remember what you wrote earlier?

Quote:

My maths go as follows:

We have 40,000 euros in cash, and can get a mortgage of 90%.

Assuming the full amount is declared (190,000 euros) then we would only need 19,000 cash and could use  the remaining 21,000 euros for furnishing, expenses, etc.

Is this your dream house? How bad do you want it? If they've agreed to no black, isn't that what you wanted? Forget this BS about it being a "buyers" market. If you don't buy it, they'll just hang on until someone else does. I say go for it! 21K will buy you some pretty nice furnishings, and assuming you've done your research thoroughly (as it seems you have) your investment will surely appreciate over time, as well as giving you lots of happiness in the meantime.

As to whether or not the agent has even passed on your offer or not, unless you have some way of contacting the seller directly, you can't really be sure. But bearing in mind that the agent is probably getting something like 18K commission on the deal (scandalous!) why not simply ask the agent to "give a little bit" to sweeten the deal for you? In my experience, most agents will be happy to knock a couple of grand off a deal like this, to secure the sale and save themselves the bother and expense of showing the property to more prospective buyers, or maybe losing the sale to another agent.

Good luck, and keep smiling!

Yeah, I think you are probably both right.  I keep reading on the web and other forums how it is a "buyers market" and "knock 20 - 30 grand off the asking price" and I think maybe I am getting a bit carried away with what I am reading.

I don´t want to appear too keen, too soon, but maybe it will have to be the asking price after all. 

As for contacting the seller direct, well I actually do have his telephone number.  It was displayed in the window of the house when the agent introduced me to the house.  Trouble is, I have signed a form with the agent so if I went behind their backs and they find out, I might have a hefty fine to pay.  It is tempting though....

You wont have to pay, the seller does!

If its what you want go for it, the good ones sell fast and its the rest that hang around.

If the oners are complient then it may be worth contacting them and splitting the commission with them!!

Oh I wasn´t seriously saying that I would go behind the agent´s back - I´m too honest!  But there is always a small part of you that says "go on, do it" isn´t there?

Rixxy - in Jerez agents charge both the buyer and the seller commission.  Most agents charge 2.5% to each party.  Some of the bigger agents charge 3% each.  The agent I have found is a middle aged lady working by herself from a house that she has converted into her "office".  She charges 1.5% to each party.  So on the downside, I have to pay the agent´s commission, but on the upside it is a cheap one.!