Lawyers fees - house purchase - Buyer to pay

Jun 23, 2008 · wallace · 4 replies · 2058 views

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Have completed house purchase in Murcia and trying to get receipt from lawyer for the various fees, taxes etc. He has emailed a breakdown with the expected categories of Transfer tax, Land registry and Notary fees, legal fees. No problem. However, also included is a 3% Rentention (based on the declared value) and, to me, huge bank charges over 700 Euros on on a total transfer of 159K Euros.

Can anyone suggest what the 3% Retention could be? It is the same figure that was withheld from the seller for CGT but why would I have to pay this. No mortgage is involved. Lawyer not responding to written questions, wanting a meeting to discuss these charges. I would like to have some answers before meeting again.

Bank charges. Are these normal?

VMT

Jun 23, 2008 · SpainExpat member

The buyer of Real Estate whether or not he is a resident, must withhold and deposit in the Treasury an amount of 3% of the price agreed to. This withholding will be a down-payment for the buyer
Therefore, the purchaser must provide the nonresident seller with a copy of form 211 (used to pay the withholding), so that the seller may deduct this withholding from the tax arising from the capital gain. If the amount withheld is higher than the tax liability, the seller is entitled to a refund of the difference.
? Deadline: 1 month after the date of transfer of the real estate.
? Form: 211.
Refund of excess withholding
In the case of capital losses or when the withholding is higher than the tax due, the excess over the tax liability will be refunded
? Form 212.
The refund is made by bank transfer to the account provided in the form

Jun 24, 2008 · wallace

Thank you Spanishlawyer for your reply.

Forgive for being obtuse but why did the SELLER deposit the same figure to offset CGT with the Tax authorities during the signing at the Notary? I really do not understand why this has to be paid twice? I have never heard of this during my research, my lawyer did not mention it during the pre sale discussions, it is not mentioned in the company's brochure and no one I have spoken to about can understand it either. Your own website says that it is the SELLER's responsibility to pay CGT. Since when has it been a requirement of the buyer? I am sure that you will understand my frustration as no mention this deduction has ever been made previous to the sudden appearance in an email with no further explanation.

Again, has any one else had to pay this 3% rentention as a BUYER?

Jun 24, 2008 · ROBI

I think you are getting confused:

The 3% retention is taken from the buyers money for purchasing your property - which is in effect your money but you dont get the 3% balance until the your tax due has been calculated - then you received the balance of your money.