Property purchase tax

[edgilbert]

I have finally got my house registered on the land registry (after 2 years). Does anyone know if there are any rules regarding the purchase tax, being 5% of what value?
The price I paid for it or the value when my name was entered onto the register. Are they supposed to make an allowance for the improvements that I made? I would be grateful for any advice.

[darcy]

I do not have any recent experience, but as much as I know Tax Office will ignore the contract value if they think it is too low and use the "current prices" as a guide. I expect they will ignore the fact the property had been purchased 2 years ago as in reality you are purchasing now. They usually inspect the property. In theory, they might come up with any valuation they like as "current prices" are not collected and published (as much as I know).

I suggest you to find someone with experience to help you to at least correctly fill the forms and put up your property improvements case, with all the evidencess and/or receipts.

Good luck!

[Ribaric]

I've just been through this. I had to convince them, by documentation, of the date I agreed with the seller to exchange ownership. I had hundreds of photos of the condition of the house and all the work going on in whilst waiting for MOJ permission.

They told me I am liable for tax at the value of the house when I bought it - provided they agree this was a fair price at the time. They accepted my evidence that it was in poor condition and accepted the buying price on the contract because they could see it had been completely renovated since then.

When they showed up, they were surly, uncommunicative and refused all offers of coffee etc. Once they decided we were being fair with them and the price/condition at the time of purchase was reasonable they un-froze and chatted away quite happily. One of them told me they are accustomed to listening to bullsheet and having their intelligence insulted, not least by clearly dodgy papers from even dodgier lawyers. They live in fear of being drugged (or worse) during "negotiations". In short, we were honest and fair, so were they.

Then they accepted coffe and cakes.

[rijekafan]

Th amount of the tax depends on some formula dreamed up by the local Opcina, based on what they say are fair market prices. In my experience I paid exactly 5% of what I paid for the place and there was no inspection.
The main problem is you never know when the bill will come in. In my case despite repeated requests for the bill, when the bill came it came with the threat of prosecution for non payment. This has happened twice now. The bill will arrive claiming that I am months overdue paying it when in fact this was the first bill. GRRRRR!

[mirabelle]

are we talking RETT here? If so thought was on Land value. Our contract has two values 1 land 2 building. As finish is coming up to 2years (official) delay and rolling on and on and on on on ref utility connex youvall got us thinking again......

[rijekafan]

Sorry I dont know the acronyms. I just call it stamp duty or purchase tax.

[mark2]

The 5% purchase tax is payable on the contract price stated when the property was bought.

We have clients who are just receiving their bills now, some of whom have spent large sums of money to remodel and refurbish their properties, hand in hand with rising property values, none of this has been questioned and the flat 5% is all that is payable to the tax department.

[Carol]

mark my personal RETT / stamp duty bill was for a lot more than 5% of the contract price (and my contract price was the real price). The tax office sent one of their officers out, he looked at the house, we pointed out the asbestos roof and rotting floor joints and he went back and added 16% to the value. It has happened to our clients too.

[Carol]

5% stamp duty is paid on the whole property if no PDV (VAT) is due. If VAT is due, then 5% RETT /stamp duty is paid on the portion for which PDV is not due. So on brand new buildings being bought by the end user for the first time, PDV is paid on the building and 5% RETT is paid on the share of the land.