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Spain: British expats wanted for ‘underpaid’ property tax
| Published: | 13 Jan at 4 PM |
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British expats who have purchased property in Spain at reduced prices in recent years may be told they have to make back payments on tax bills.
Authorities in the Iberian country are currently looking thousands of property sales from the past four years and working out whether the costs were knocked down in order to make the sales. However, authorities in Spain can review sales prices years after properties are bought and decide whether or not they agree with the price.
The Impuesto de Transmisiones Patrimoniales (ITP), known as stamp duty in the UK, is worked out at a percentage of the property’s value. The usual rate is around seven per cent, although it often varies from place to place, and some regional authorities have raised their rates in recent times.
Tax officials are now looking at the sales prices that were officially declared and comparing them with what they consider to be the actual value. And British expats could be faced with large bills because if the sale price is not equal with the taxman’s valuation, they could be told to cough up the difference.
Hundreds of thousands of UK citizens have made Spain their home over the past two decades, and since the onset of the financial crisis in 2008, house prices have plummeted. However, the country has recorded its first annual increase on house prices in almost six years, while rates on expat mortgages have fallen and potential buyers are again showing interest.
Authorities in the Iberian country are currently looking thousands of property sales from the past four years and working out whether the costs were knocked down in order to make the sales. However, authorities in Spain can review sales prices years after properties are bought and decide whether or not they agree with the price.
The Impuesto de Transmisiones Patrimoniales (ITP), known as stamp duty in the UK, is worked out at a percentage of the property’s value. The usual rate is around seven per cent, although it often varies from place to place, and some regional authorities have raised their rates in recent times.
Tax officials are now looking at the sales prices that were officially declared and comparing them with what they consider to be the actual value. And British expats could be faced with large bills because if the sale price is not equal with the taxman’s valuation, they could be told to cough up the difference.
Hundreds of thousands of UK citizens have made Spain their home over the past two decades, and since the onset of the financial crisis in 2008, house prices have plummeted. However, the country has recorded its first annual increase on house prices in almost six years, while rates on expat mortgages have fallen and potential buyers are again showing interest.
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