Advice wanted about selling my apartment in Tenerife

[twotees]

Hi

I have accepted an offer for my apartment. The estate agent has told me I don't need to instruct a solicitor as the agent sorts everything out> Is this the way of things in Tenerife? I am a little concerned as they also asked if they could put the sales price on the contract as 10,000E less than the actual sales price, so to save tax. The difference will apparently then be paid in cash. My instinct is saying 'No' but again, I don't know how things work in Tenerife. (I inherited the apartment - all legalities completed on the inheritance - and am more than a little out of my depth!)

Thanks in advance

Katie

[barryk]

Hi,

Would you buy or sell an house in the UK without a good solicitor to check things out?????. I am sure other members on the a forum can recomend a solicitor, l used DeCotta law who were expensive but I found them very good. There are lots of other matters when selling,like 3% to the tax people. Lots of good advice on the forum but I would not trust some estate agents in Tenerife

[twotees]

Thank you. That is what my instinct is telling me. I just didn't know if it was the normal way of things!

[junglejim]

Contact CIM or YOUNG GOLFER on here they should be able to give you advice .

[phillip]

The simple answer to this is do not do it and get yourself a solicitor/accountant to deal with this for you - they will charge, but it is worth every penny to make sure that you do not fall foul of the Spanish Authorities. The practice of under declaring values on properties was widespread some years ago and although it still does go on the 'powers that be' are more aware of it.
We have sold a couple of apartments in Tenerife and if you need advice, there is no-one better placed than Stuart or Andy from propertiesareus - they are both members on here.

[twotees]

Thank you. I should trust my instinct!

[martincrabb99]

The advice given by the forum members is spot on. The cost of legal fees far outweighs potential problems in the future[emoji106]

[twotees]

Thank you.

Best find a lawyer :)

[doreen]

You do not necessarily need a lawyer as a Seller (though a Gestor can be useful to employ) BUT do not allow the false declaration of the price on the escritura ... the tax saving is not significant really (the Buyer will have a transfer tax bill of about 650 euros less). As Philip says above, it was practised a lot in the past, but it is illegal.

Is your sales price the same or less than the value you have paid Inheritance tax on ? I am assuming that most likely you are a non resident: if so, has it been explained that 3% of the total purchase price will be withheld at the Notary and paid over to the tax authorities by the Buyer: it is supposed to represent a payment towards the presumed Capital Gains Tax and can be reclaimed (with difficulty - I doubt your agent is planning to undertake this for you!)

Has the Agent actually discussed how he will be paid ? I wonder was a deposit of 10,000 already paid over to him?

[twotees]

Thank you Doreen. I am indeed a non resident. How can you tell ;)

The sales price is less than the value I paid inheritance tax on. And yes, the 3% has been explained. I haven't paid anything to the agent, and my understanding is that I don't until the end of the process. I am slightly concerned that I don't have all the relevant paperwork to complete the sale so will need to take some advice on this from someone, presumably the estate agent will tell me what I need to obtain. I know I need to obtain the IBI payment receipt, community fee statement, escitura (obviously!) but with regards to original receipts for the deposit and so on there was no deposit as it was an inheritance!

Spanish law, taxes and all things unknown scare the bejeezus out of me!

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Thank you Doreen. I am indeed a non resident. How can you tell ;)

The sales price is less than the value I paid inheritance tax on. And yes, the 3% has been explained. I haven't paid anything to the agent, and my understanding is that I don't until the end of the process. I am slightly concerned that I don't have all the relevant paperwork to complete the sale so will need to take some advice on this from someone, presumably the estate agent will tell me what I need to obtain. I know I need to obtain the IBI payment receipt, community fee statement, escitura (obviously!) but with regards to original receipts for the deposit and so on there was no deposit as it was an inheritance!

Spanish law, taxes and all things unknown scare the bejeezus out of me!

having just re-read that, it sounds like I don't already have the escitura. I do. And the copia simple.

[doreen]

As the sales price is less than the inheritance value, then you do need to be looking at being able to reclaim that 3% as there would be no Capital Gains Tax chargeable. If the sales price is 100,000 that 3% is not insignificant at 3,000. Who handled the tax matters for the inheritance - they should be able to help, advise ?

Talk to your agent about his commission, does it include IGIC (Canarian equivalent of VAT) or is he going to claim 5% of the sales price plus IGIC of 7%. Has he found out how much the Plus Valia will be (this is a tax on the notional increase in the value of the land the property is on) - you are responsible to pay this. What normally happens is that Hacienda are asked how much it will be and this amount is withheld to pay it.

About receipts for the deposit - who has the deposit? the agent? If you have not received any money to date, then you do not have to produce any receipt at the Notary. And it does not matter that it was an inheritance, for you do not have to prove how you paid for/came to own the property ... it is more for the Buyer to prove where his cash to buy has come from. It occurs to me that 10,000 might already have been paid and this is where the request to under declare comes from and the proposal would be to go to the Notary saying the full price is being paid on the day.

You seem to be on track with the paperwork - IBI receipt, up to date Community fees (you have to ask the Administrator of your complex to provide you with an official receipt, signed by the Community President, that all fees are paid up to date), proof of payment of the deposit (if agent has the money, it is up to him to produce a copy of the cheque or bank transfer showing the relevant account numbers to be included in the escritura - payments have to be traceable to counter money laundering)

[twotees]

Thank you Doreen. A very useful reply.

I have contacted Jose Escobedo for some legal advice - I think it was you that recommended him to me some time ago :)

I would not go back to the people that sorted the inheritance out.

I appreciate all the advice.

[doreen]

You would be in very good hands with Jose Escobedo - though I do not think he would be involved in claiming back the 3%, that is more of a Gestor's job.

Also, August (or at least some of it) is holiday time for many of the legal profession so do not expect an immediate closing.

[twotees]

Thank you. Can you suggest a gestor? We are going before the notary in October, but due to family commitments the only time before then I can come and sort things is next week! Stressed does not begin to cover it!!!

[doreen]

I suggest you contact Forum Member Goldenmaniac , who if not able to help, will certainly be able to recommend a competent English speaking Gestor.

Her web page is here http://www.diana-mcglone.com.

You will be able to attend at the Notary yourself in October, I hope.

[twotees]

Yes, I will be there in person - a 24 hour round trip!! Thanks for the info - I have contacted Diane already for some help translating so I will ask her advice.

[cressrt]

Don't forget to get the utilities read, ie water and electric, and agree who is paying the final bills; also if there is a phone line make sure it is terminated or arranged to be taken over