02 Feb 2008 9:33 AM:
Below is an extract from our lawyers last communication to us, we did ask if it was possible to reassign the contract in our name, but the developer has rejected it. We have also been informed that the developers in the Costa del Sol are now strictly enforcing this rule.
Effectively the law has changed since you signed the purchase contract in May 2004. Before this change in the case of contract assignment the contract between the developer and the first buyer was cancelled and a new contract was signed between the definite buyer and the developer. In consequence the buyer only had to pay 7% VAT and 1% Stamp Duties. But the actual legislation obliges that apart from these tax the definite buyer also pays 7% Transfer Tax on the assignment of the purchase contract.
The information you give me is correct because normally in a purchase is paid either VAT or Transfer Tax. IVA is paid in the purchase of a new property and Transfer Tax is paid in a resale. The problem is that actually in the case of transferring a contract the VAT is payable to the developer and the Transfer Tax is payable for the assignment. I am very sorry but when you signed the contract in 2004 the law was different and we did not know that the law was going to change.
The contents of the article on the website you sent me is quite discussable and the Tax Authorities will never accept it. Therefore the developer rejects to sign the title deed in your name except you pay the transfer tax for the assignment of the contract.
Looks like we have to pay!
Thread:
Transfer Tax
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