Hello. The ITP, "Impuesto de Transmisiones patrimoniales", or property transfer tax" on the purchase and sale of second-hand homes, that is, not new construction, is collected by the administration of the Comunidad Autónoma. . Some have bonuses but I am afraid that the Comunitat Valenciana is not the case. The regional tax collectors are quite voracious and do not pay attention to many reasons. In Spain there are three levels of administration: local, regional and central. That's expensive to maintain. They rectified the settlement for the purchase of some parkins for me for a small amount of difference since according to the cadastre the value was slightly higher. It was about 100 euros. By luck or inefficiency, they had not reviewed the cadastral value and the real value was triple
Thank you so much for sharing your experience with property tax and other surprises!! Our family just moved to Valencia 3 months ago and we’ve found your channel extremely helpful in understanding much about the Spanish property regulations and renovations too!
Oh Nicole, I'm sorry. We are planning to retire in the Valencia Area, we live in Portland Oregon and we always thought about renting at the begiining but after this video, we'll definitely rent forever.
Great video, well done for trying to understand the process of how investing in property in Spain actually works, it's a journey, lucky the property value was small.
That's crazy Nicole, sorry you had to go through that! Did you check the Cadastral Value in the "Nota Simple" before purchasing? Also there's no way I would have definitely contacted another lawyer who was more willing to help afterwards. Great that you shared this experience nevertheless so that people can be aware of things like this!
Thanks, Jonny! Yes, my attorney told me about it before we completed the purchase, but I opted to wait and appeal afterward because of the timeline we needed to be on. It wasn't worth losing the house to me. My attorney and his firm do a lot for me because of the business I have brought in for them with referrals. So, it's a little complicated, but I was definitely not happy about the way it was handled in my conversations with them.
You need to understand the concept of preference rights, that "cadastral value" is something used to setup many of the taxes due regarding property. And since you are buying a home below the councils valuation they can either buy it instead of you for the price you were buying, or make you pay the correct tax amount based on that value. This was set in place to avoid tax evasion schemes and money laundry really back in the day.
i discovered that if you buy a property in Spain with the intent of renovating it and then re-selling it, one can bypass the taxes. I have not done a deep dive into the rules, but it appeared that you need to create a company and I am sure that there are other considerations. I mention it because I found out the info on my own, no accountant or lawyer had ever mentioned it to me. Did you know about this?
Yes, we found out during the purchase process, just before the sale was complete. We could have tried to appeal before the sale if the seller was willing to wait, but depending on the contract, could have lost the purchase. We were able to complete the sale, paying just the 10%, but knew the additional bill was coming and that there was a possibility of appeal.
@traveltomoney what did the attorney cost you to do the sale? How much was the contractors bid? Did you negotiate that? How long did their work take and how many payments and for what amounts were made? Thanks. I'm sitting in Cadiz right now, looking for a fixer upper that I can do myself.
Just because of who l am, like you, l would have to take it up with the Ayuntamiento! We’re hoping to purchase between Pego and Gandia, soon. Best of luck.
Thanks for sharing. While I admire your tenacity and determination, this doesn't sound like it was worth it. It this something you'll have to pay annually? As I'm doing more research, it seems like the taxes will preempt me from purchasing a home in Spain.
I found that quite amusing because if you tried to deal with lawyers in the UK & the council you would be frauded at every corner. You probably upset the Spanish by buying three houses & they thought you were speculating on property at their loss.
Hi there! 🙂 One of the playlists on this channel is called "Spain Living," where I have a lot of videos about my purchases and renovations. It can be viewed at this link: Spain Living: th-cam.com/play/PLbfwjI_7ahZj101XZdA-YMBp-8iUUNkpx.html
to be fair...you didn't know it was just going to be a 500 savings initially. It appeared to be a 4,800 savings. So I think going into it with that mindset, you did what you could do and it wasn't wasted. If you had known you could only save 500 from the beginning and were upset that you only saved 500, well then...that one would be on you hahaha
Ah, the pitfalls of house purchase in Europe. I get so frustrated by a lot of these videos (not this one!) extolling the cheap houses, life-style etc etc in Spain, Portugal and Italy (where the bureaucracy is much worse!!!). Sadly, the bureaucrats running these depts are on another planet, and interpret the law depending on what side of bed they got up from. I'm in a similar situation (tax wise) in Italy. My parents passed away recently and me & my siblings were left the family house. As my job takes me all over the world, i've never owned a house. However, according to Italian law, the fact that i'm resident out of Italy means that this is classed as my 2nd home, so am having to pay extra taxes every year, as are my siblings. Anyway, good luck with the renovations. Don't let the bastards grind you down!🙃
Hello. The ITP, "Impuesto de Transmisiones patrimoniales", or property transfer tax" on the purchase and sale of second-hand homes, that is, not new construction, is collected by the administration of the Comunidad Autónoma. . Some have bonuses but I am afraid that the Comunitat Valenciana is not the case. The regional tax collectors are quite voracious and do not pay attention to many reasons. In Spain there are three levels of administration: local, regional and central. That's expensive to maintain. They rectified the settlement for the purchase of some parkins for me for a small amount of difference since according to the cadastre the value was slightly higher. It was about 100 euros. By luck or inefficiency, they had not reviewed the cadastral value and the real value was triple
Thank you so much for sharing your experience with property tax and other surprises!! Our family just moved to Valencia 3 months ago and we’ve found your channel extremely helpful in understanding much about the Spanish property regulations and renovations too!
Oh Nicole, I'm sorry. We are planning to retire in the Valencia Area, we live in Portland Oregon and we always thought about renting at the begiining but after this video, we'll definitely rent forever.
Hi Nicole. Thank you for your information about WASE. I am binge watching your videos.
I think u did the right thing. Maybe a diff law firm might have helped more. Is this an annual tax or a one time tax?
Great video, well done for trying to understand the process of how investing in property in Spain actually works, it's a journey, lucky the property value was small.
Thanks for good video and interesting information.Good luck in your future
That's crazy Nicole, sorry you had to go through that! Did you check the Cadastral Value in the "Nota Simple" before purchasing? Also there's no way I would have definitely contacted another lawyer who was more willing to help afterwards. Great that you shared this experience nevertheless so that people can be aware of things like this!
Thanks, Jonny! Yes, my attorney told me about it before we completed the purchase, but I opted to wait and appeal afterward because of the timeline we needed to be on. It wasn't worth losing the house to me. My attorney and his firm do a lot for me because of the business I have brought in for them with referrals. So, it's a little complicated, but I was definitely not happy about the way it was handled in my conversations with them.
Great that you fought it. I would have too.
Thanks! 🙂
You need to understand the concept of preference rights, that "cadastral value" is something used to setup many of the taxes due regarding property. And since you are buying a home below the councils valuation they can either buy it instead of you for the price you were buying, or make you pay the correct tax amount based on that value. This was set in place to avoid tax evasion schemes and money laundry really back in the day.
Nicole are you referring to a property tax? 4600 euro ? or the 11% VAT they add on purchase ?
i discovered that if you buy a property in Spain with the intent of renovating it and then re-selling it, one can bypass the taxes. I have not done a deep dive into the rules, but it appeared that you need to create a company and I am sure that there are other considerations. I mention it because I found out the info on my own, no accountant or lawyer had ever mentioned it to me. Did you know about this?
That's would be pretty cool! I've never heard of this avenue before.
Yes I would have just paid it.however is it not possible to get the cadastral value before signing for the house.
Yes, we found out during the purchase process, just before the sale was complete. We could have tried to appeal before the sale if the seller was willing to wait, but depending on the contract, could have lost the purchase. We were able to complete the sale, paying just the 10%, but knew the additional bill was coming and that there was a possibility of appeal.
@traveltomoney what did the attorney cost you to do the sale? How much was the contractors bid? Did you negotiate that? How long did their work take and how many payments and for what amounts were made? Thanks. I'm sitting in Cadiz right now, looking for a fixer upper that I can do myself.
Good to hear this story, as an exemple of 'what can go different then one should expect'
Just because of who l am, like you, l would have to take it up with the Ayuntamiento! We’re hoping to purchase between Pego and Gandia, soon. Best of luck.
Thank you! I hope you find just the right place! 🙂
What will your yearly taxes(contribution be)? I live in Galicia and my house is small, i pay 250 euros a year.
Hi there! Mine is about the same as yours. 🙂
Is this tax owed annually?
That’s a cool painting
Thanks! In Florida, we love our manatee! 🤩
How much did you pay for your attorney?
Thanks for sharing. While I admire your tenacity and determination, this doesn't sound like it was worth it. It this something you'll have to pay annually? As I'm doing more research, it seems like the taxes will preempt me from purchasing a home in Spain.
I don't think that was fair, it sounds like they just made the new price up.
I found that quite amusing because if you tried to deal with lawyers in the UK & the council you would be frauded at every corner. You probably upset the Spanish by buying three houses & they thought you were speculating on property at their loss.
Id appreciate getting all the history and information, as I am sure you have.
Hi there! 🙂 One of the playlists on this channel is called "Spain Living," where I have a lot of videos about my purchases and renovations. It can be viewed at this link: Spain Living: th-cam.com/play/PLbfwjI_7ahZj101XZdA-YMBp-8iUUNkpx.html
to be fair...you didn't know it was just going to be a 500 savings initially. It appeared to be a 4,800 savings. So I think going into it with that mindset, you did what you could do and it wasn't wasted. If you had known you could only save 500 from the beginning and were upset that you only saved 500, well then...that one would be on you hahaha
learn more about folks like Yolanda Diaz before your next major financial move.
Gifting
Welcome to socialism.
Government infrastructure, public schools, police, fire, etc…are also elements of socialism
Move to America if you want to $300 for a $30 prescription. That's CORPORATE Socialism...
@@Kevin-zz9nc Your response was perfect.
Ah… ditto head.
Ah, the pitfalls of house purchase in Europe. I get so frustrated by a lot of these videos (not this one!) extolling the cheap houses, life-style etc etc in Spain, Portugal and Italy (where the bureaucracy is much worse!!!). Sadly, the bureaucrats running these depts are on another planet, and interpret the law depending on what side of bed they got up from. I'm in a similar situation (tax wise) in Italy. My parents passed away recently and me & my siblings were left the family house. As my job takes me all over the world, i've never owned a house. However, according to Italian law, the fact that i'm resident out of Italy means that this is classed as my 2nd home, so am having to pay extra taxes every year, as are my siblings. Anyway, good luck with the renovations. Don't let the bastards grind you down!🙃
Oh my goodness! That sounds like an ordeal! Sorry you're having to go through that.