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Under declareing property value during purchase!
Under declareing property value during purchase!
I am currently in the process of purchasing a property in Algarve and this week we were to sign the final contract. The promissory agreement said that all furniture was including in the price. I have just received a phone call from my solicitor to say that the vendor has requested that the price of the property should be under declared by 20,000 euros, as this is the value of the furniture. My lawyer has said that he has a legal right to under declare a specific amount for the furniture and is pressuring me to agree to a figure. He informs me that this common practise. If this is the case should it not have been defined in the promissory agreement?
Do I have to agree to this practise?
Joe
Do I have to agree to this practise?
Joe
Joe, what is the total price for the property in the promissary contract.
You have a legal right to adhere to this price and if the vendors want to change it then they have broken the contract and you can then claim back your deposit x 2 which will put you in the driving seat so to speak.
Also you can buy one hell of a lot of furniture NEW for 20000 Euros.
Do not be taken in ( the seller wants to get sold so stick to your guns )
Hope this helps.
You have a legal right to adhere to this price and if the vendors want to change it then they have broken the contract and you can then claim back your deposit x 2 which will put you in the driving seat so to speak.
Also you can buy one hell of a lot of furniture NEW for 20000 Euros.
Do not be taken in ( the seller wants to get sold so stick to your guns )
Hope this helps.
Property purchase
The real point here is that the price you declare will be the base price for a future calculation of tax on profit when you see.
If you reduce by 20k then that will be 20k less you can set against a future gain and it would cost you 25% x 20k in taxes = 5k.
The tax department is never going to quibble over a declaration 20k under perhaps what it should be so no problem - but you are causing a potential tax problem later for yourself.
If you reduce by 20k then that will be 20k less you can set against a future gain and it would cost you 25% x 20k in taxes = 5k.
The tax department is never going to quibble over a declaration 20k under perhaps what it should be so no problem - but you are causing a potential tax problem later for yourself.
Tax
Joe - often a sale value will be split between building and contents. It is quite normal. The Promissory should have stated that so it is up to you to accept the alteration or go ahead with the conditions as stated in it. Presuming you want the apartment I would say arbitration is better than digging your heels in.