El Cid wrote:The real problem lies with the estate agents and lawyers. The official valuations of property in Spain is well documented...
Clearly any lawyer or estate agent is equally aware of this and should advise their clients that there is a potential liability for an under declaration claim from Hacienda after the sale...
It really should not come as a surprise to anyone, buyer or seller, after the sale. It should have been called out prior to the sale by the lawyer or estate agent.
I can't say I disagree with this, but you did also say yourself that the problem arises due to "their (the tax office's) archaic valuation" methods. In the case of someone selling, they may not even use a lawyer or estate agent. Even if they do, and even if the lawyer / agent points out the possibility of a subsequent tax claim, if someone genuinely sells at a loss due to market conditions, what else can they do? When you say "it's up to you to provide evidence to the contrary", what evidence other than the escritura (signed in the presence of a public notary) and bank statements etc. can you produce? This info is all readily available already to the tax office anyway. As elusive says, how do you prove a negative?
As Gerry shows with his example, the "official" valuation method can be way off the mark. Surely that's where the real problem lies?
But Gerry, assuming you actually paid more than €8,120, I don't think you need worry; surely the tax office is unlikely to believe you deliberately over declared your purchase price, so any CGT would be based on the difference between your declared sale price of around €120,000 and whatever you declared as your purchase price.
Wicksey wrote:So the CGT rate is almost 39%, based on the alleged gain of 46.000€ (17.900€ as a % of 196.000 - 150.000€)??.. It all seems a bit odd to me!
Yes, I agree, something doesn't seem to quite add up there! Unless Daveylad under-declared when he purchased?