“75% OF BUYERS DUPED”
Necessity being the mother of invention vendors of slow moving housing stock are dreaming up ever more ingenious ways of getting buyers to ‘scratch the pad‘. Under-declaration is established Spanish practice and not necessarily illegal. It can however backfire if buyers are unaware of the risks or unwisely buy without consulting a bona fide property consultant.
For example a property valued at say €200,000 against comparable properties on the same urbanisation is sold at say €160,000. This may be due to a previous buyer pulling out after placing €40,000 on it. So the builder gets his 200K and you get your dream property for 160K. Where’s the catch?
If the buyer sells the property the Spanish Revenue Department will certainly disregard the actual buying price and place his claim on its true market value. The buyer in effect has picked up the builder’s tax bill. This could amount to thousands of euros.
Alicante-based tax specialist Yvonne Hollywood says; “Around 75% of people are unaware of the potential problem; their agent never explained.”
Informed advice is for buyers to engage the services of a properly qualified property consultant. Fiscal representatives won’t necessarily be aware of the risks or sufficiently knowledgeable of the taxation laws to properly advice their client.