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Property And Taxes

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First of all I would like clarifying, that differently for what it may look like by my post(s), I have ABSOLUTELY nothing agains these non-spanish actually living full time in Spain. These share the good and bad of Spain and they do NEED a house to live in, but to these that are buying on it simply as a personal investment, or to finance a holiday lifestyle, I am sorry but I cant hold any sympathy for any of you which using your bigger buying power are letting so many Spanish people totally unable to buy a home on their own country.

Thursday, December 02, 2004

Spanish property market tax fraud

The Socialist government is planning a series of reforms aimed at "cleaning-up" the property market in Spain and tightening legislation in an attempt to control private sales and reduce tax evasion.

According to a report in El Pais yesterday, the price which figures on the deeds of second-hand house sales is actually 30% - 40% lower than the real price - . This means that sellers have to pay less plusvalía (capital gains) tax, and buyers have to pay less VAT (6% of the second-hand property price), less stamp duty and less notary costs. The "contrato privado" (private sales contract) drawn up between buyer and seller contains the real price, but until now has been exactly what its name suggests - private.

The result of this, plus the fact that cash is usually used to pay the undeclared percentage, is that there is an awful lot of "black" money circulating around the property market in Spain, and Hacienda, the Spanish tax office, is losing alot of taxes.

On Tuesday of this week the government proposed no less than 300 new draft measures to reduce tax fraud, and many of them will be applied to the property market including:

- The means of payment (cheque, cash....) must be included in the property deeds

at the time of the sale

- It will become compulsory to take the private contract (with the real price) to the

property register

- The catastral number must be included in the deeds and also in all gas, water,

electricity bills, to make it easier for tax inspectors to determine whether or not a

house is occupied (many people rent out property but do not declare the rent

paid to them)

The reforms are unlikely to be very popular with anyone, because what some

would call "petty fraud" has become so common and widely accepted in the

Spanish property market that builders, house-buyers and house-sellers will all

feel as if a "right" is being taken away from them if they have to start declaring

the real price of property and pay the corresponding taxes.

end of comment

What do this means, clearly, this means that if you bough your house for say 100 but you declared that you bought your house for only 50 (as happens in the 90% of the cases)...when you sell your house for say 200 in several years...you will not be taxed on 100 gains but in 150 gains which can basically means no gains at all

Good luck to you

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And it ain't half as expensive for Spaniards either

I am not really sure what you are refering by that. Spain is not half expensive for us spanish people?, Uk isnt expensive for spanish people? UK isnt expensive for me personally? etc

I very much sympathise with your comments that there is a lot of immigrants over here, including me but if nothing else, I bought a house in UK with money worked in UK, left over after paying UK taxes etc if you know what I mean.

Money for which I worked for in three different jobs, 12 hours a day, 7 days a week for many years. All of these jobs, that nobody in UK wanted to do. (cleaning pans and pots, looking after old people - that includes taking them to the toilets etc and cleaning a warehouse where I was in charge of the waste and rubbish

Here, immigrants (at least me) buy homes to live in. At the time, wasnt my right and I am always very grateful to UK that allowed me to work and live on it. Today, owning a house in here is something that I believe I earned the rights to.

(please note that I say this in a nice and humble way)

What I am refering to on my posts is people buying "a business or a lifestyle" but doing so taking advantage of other peoples circumstances and in doing so, they are putting these same people in missery etc.

To these, exactly as I feel for all these home (meaning living in UK) greedy homeowners and btl that simply are speculating to make a killing in a couple of years at other people xpenses...to these I said, I can only feel happy if I see their plans going to hell

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"And it ain't half as expensive for Spaniards either

I am not really sure what you are refering by that. Spain is not half expensive for us spanish people?, Uk isnt expensive for spanish people? UK isnt expensive for me personally? etc"

Edward, just to clarify that when I asked the above, I was not "ironically implaying" that you were directly attacking me.

your post was not offensive in any way (as you further confirm by your last post) and I simply was not sure what you meant, hence I asked

then, when I told the history of how I bought my UK house etc, I didnt did so in respect of your post, as, as you well say, you never gave any impression that you objected to me being here so that was not even an issue

I just wrote that in advance as a some sort of explanation or else anybody could have (and rightly so) objected to my very initial post under the grouds that I would have done myself in this country the very same thing that I am complaining that happen in my country

guau, I think I am complicating this thing, am I?

(friendly laught meant to go here but I just cant manage to add any of these smilies)

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