Capital Gains on Property Sale 3% Tax Retention

2 Replies

Has anyone heard of the Mallorcan tax authorities trying to revalue and inflate the value of a property for capital gains tax liability a year after the sale has completed? The aim of this being to increase the capital gains tax payable over and above the 3% retention.


Eddyspade 1274697843

Not heard that, but it wouldn't surprise me. In a town in Valencia (I forget which) they went back through the records and charged extra purchase tax on a hypothetical figure because they felt certain people hadn't paid enough for their houses in the first place.

Pinklett 1275060954

I´ve heard that this was going to start happening and in most cases (possibly not in yours, Fiona!), rightly so! The main reason being that in many parts of Spain and almost routinely in Mallorca, sellers of properties will give you a "good price" if you pay them a percentage of the sale price in "black money" (ie cash in hand and stuffed under the mattress) and they then declare a lot less for taxation.

Yet another sneaky way to evade tax and obviously the government is getting rather desperate for cash these days, so is finally doing something about all the dishonesty!

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