Brits who own homes in Spain could be hit with a surprise tax bill if Spanish authorities decide they have paid too little for their property.
According to media reports, the Spanish government is re-examining tens of thousands of property transactions that have taken place in Spain over the last four years, believing that some properties may deliberately have been sold at less than the going rate.
Tax officials are currently looking at the declared price of past property sales and comparing them to what they believe their true value to be. Where there are major discrepancies in these values, home owners will be asked to pay extra tax; Impuesto de Transmisiones Patrimoniales (ITP) – Spain’s equivalent of stamp duty.
ITP amounts to a percentage of the value of the house, which varies from region to region but averages around 8 per cent.
Only owners who bought resale homes will be at risk of receiving this tax bill – owners of new-build property are exempt from any prospective penalties.
Article published 8th January 2015