Your property questions answered
Solicitor's error landed us with unexpected bill
We bought a second-hand house three months ago and at this stage felt happy that we were finished with all the bills to do with the purchase. This morning we received a letter from our solicitor saying that a mistake had been make. Apparently there was a miscalculation in relation to stamp duty and we now owe an extra €4,000. We cannot afford to pay this right at this moment. What should we do?
Whether it's a comfort to you or not, yours is not an unusual problem. The bottom line is that every purchaser is obliged to pay stamp duty to the Revenue Commissioners on the purchase of a property. A solicitor will invariably do it on the purchaser's behalf but can do so only if the purchaser supplies the funds necessary for this.
According to the Law Society, "a miscalculation by the solicitor does not extinguish the purchaser's obligation to pay the correct amount to the Revenue".
The Society further advises that "there would appear to be no alternative to the purchaser now supplying the necessary funds to cover the stamping requirement for which, incidentally, there are penalties if the stamping is late".
In other words, pay up. The Society also suggests that you should write to the solicitor to ask for an explanation for what has occurred. "If either no explanation or no satisfactory explanation is forthcoming the reader should write with all relevant facts and copy documentation to the Law Society and we will investigate the matter."
You say quite reasonably that you are not in a position to write a cheque for €4,000, so perhaps you might suggest to your solicitor that as it was his/her mistake then you are willing to enter into a reasonable payment plan to get the matter sorted as soon as possible.
Explain Spain tax to avoid 'name and shame'
On Monday your paper printed an article about Irish people who own properties in Spain being "named and shamed" because of unpaid taxes. As owners of an apartment in Majorca we are naturally horrified - we are resident in Ireland and have paid some tax on rental income and a management fee which we are given to understand includes local utilities. Is that enough? What should we do?
Anyone buying property outside Ireland should make themselves fully aware of their potential tax liabilities. There are many property-related taxes in Spain including annual wealth tax, income tax on rents received, deemed rental income tax, local property tax, inheritance tax, capital gains tax, other taxes relating to transfer/sales of property and a special tax on corporate property owners.
An excellent website that outlines what all of these taxes mean is www.ifgspain.com.
As some taxes "belong" to the property not the owner, a real problem arises when a buyer purchases a property without realising that it comes with unpaid taxes for which, on purchase, they become liable. This is the sort of thing that should become clear during the sale but sometimes doesn't.
Consult a tax specialist with a full knowledge of how the Spanish system works.
Send your queries to Property Questions, The Irish Times, 10-16 D'Olier Street, Dublin 2 or email propertyquestions@irish-times.ie.
Unfortunately, it is not possible to respond to all questions. The above is a representative sample of queries received. This column is a readers' service and is not intended to replace professional advice. No individual correspondence will be entered into.
