A BRITISH couple’s retirement dreams have been shattered after their Spanish lawyers failed to pick up an ‘outstanding’ property tax that only emerged 26 years later.
John Stephenson, 75, and wife Kathy, 78, are stunned that the ‘unfair’ €11,200 levy was taken from them last year.
The ‘theft’ by the Hacienda tax authorities actually applied to previous sellers of the land back in 1996.
But this didn’t stop the taxman deducting the money from the €375,000 John and Kathy were expecting from the sale of their three-bed property on the Costa del Sol in May.
The former real estate agents – who shuttered their Marbella agency due to Covid in 2022 – had decided to downsize from San Pedro to Tarragona (Catalunya), trusting the sale of their home would take care of them through retirement.
But after buying a new house for the same amount, they claim the outstanding IBI (rates) bill, dating back to 1997, has left them financially short.
They are furious as they had only bought their three-bed home in San Pedro from English friends in 2013 having contracted a legal firm to do the conveyancing.
“Our lawyers told us there was absolutely no debt on the house when we bought it, we made sure of that as you do when you buy one,” John told the Olive Press this week.
“I now realise they didn’t do a proper job as this amount was taken from the proceeds of our sale last year.”
He continued: “It was meant to pay off our car loan and other debts. Instead, we are struggling to pay them – at an age when we should be enjoying our retirement.”
The couple only discovered the debt two weeks before their sale last year, when their lawyer broke the news.
“I said there must be some mistake. In fact I was devastated by it.”
When the Olive Press contacted his lawyer, Alvaro Moreno of Armo Legal Services, who handled the recent 2023 sale, he described the case as ‘quite strange.’
“Normally these things come to light when you’re going through with the purchase, but indeed there was no mention of the debt on the title deed,” he explained.
The problem emerged, explained Moreno, as the IBI bill was allegedly posted on the official Andalucian public ‘buletin’ at least once every four years, meaning it stayed valid.
It is even stranger then that the lawyer who handled the 2013 purchase didn’t spot this.
And that is where the case gets interesting, for it was Moreno’s former partner, Rafael Arevalo.
John told the Olive Press that Arevalo had represented his interests during the 2013 purchase.
He provided email chains in which Manoli Caracuel of Lizara Abogados, who represented the sellers, explicitly referred to Arevalo ‘Mr Rafael Arevalo, Mr Stephenson’s Lawyer.’
However, bizarrely, it was discovered that in 2013 Arevalo had signed the title deeds to the property as a witness, and not a legal representative.
And as merely a witness, Arevalo was not liable for failing to find the €11,200 bill during due diligence – or so said his partner, Moreno.
“If I’d wanted a witness, I could’ve got anyone off the street to do it,” John complained.
Moreno later told the Olive Press that he and Alevaro are no longer business partners nor even on speaking terms.
The Olive Press has been unable to get in contact with Rafael Arevalo.
Property lawyer Antonio Flores, who runs Lawbird in Marbella, told the Olive Press that the onus was on Arevalo and Moreno to prove they correctly did the due diligence in 2013 – and not the other way round.
“The lawyers have to prove they did everything right,” he said. “They have to show that they looked in all the right places.
“They should’ve fought harder against this mystery IBI tax bill, or negotiated with the buyer’s lawyer,” he added.
But the government tax office was on the other side of the coin and always desperate to collect money from people by any means possible, he pointed out.
“They always have new IT systems which suddenly unearth new bills or find ways to charge for old things.
“When it comes to collecting money, the tax office is very predatory and always lying.”
For now, John and Kathy are looking for a lawyer willing to take on their case on a no-win no-fee basis.
