Reference value in Spain

Warning! Please be careful when buying a bargain or low priced property in Alicante or Costa Blanca areas like Torrevieja because there is a reference value established for tax purposes for every property in Spain.

The reference value is a crucial concept used to determine the amount of taxes associated with property transactions, such as Stamp Duty, Inheritance , Gift and Transfer Tax. It’s a value that is intended to be an objective and reliable measure of the property’s worth, and it plays a significant role in calculating the taxable base.

In Spain, the reference value is established based on certain criteria outlined by legal regulations. Here’s a summary of how this figure is determined:

  1. Market Value Doctrine: The Spanish Supreme Court has established that, when there is a market for the dwelling in question, the “real value” coincides with the “market value.” In other words, the objective is to assess the value based on prevailing market conditions.
  2. Cadastral Data Analysis: The Directorate General of Cadastre (Dirección General del Catastro) is responsible for determining it. They use data from the Cadastre, which is a public registry that provides information about properties. The analysis includes the prices reported by public notaries in real estate sale and purchase transactions.
  3. Comparison and Certification: By analyzing market data and cadastral information, the Cadastre aims to determine it objectively and within the limits of the market value.
  4. Taxable Base Determination: When a property transaction takes place, if the value declared by the parties involved or the agreed-upon price is higher than the reference value, the higher of these two values is taken as the taxable base for the calculation. If there is none available or certified by the Cadastre, the taxable base can be determined based on the value declared by the parties, the agreed price, or the market value.
  5. Minimum Taxable Base: The figure is established as the minimum taxable base for Transfer, Inheritance, Gift or Stamp Duty (Impuesto de Transmisiones Patrimoniales, Actos Jurídicos Documentados, Impuesto sobre Sucesiones y Donaciones).
  6. Checking the Reference Value: To check it, individuals can visit the Electronic Headquarters of the Cadastre (www1.sedecatastro.gob.es). This online platform allows taxpayers to certify the figure on a specific date. Access to the consultation requires identification using the National Identity Document, digital certificate, or digital signature.

Law firms specializing in property conveyancing like Cc Lawyers, can assist individuals in determining the reference value  in Alicante or other areas like Torrevieja.

If you’re unsure about this minimum value of a dwelling you’re interested in purchasing, you can provide relevant information such as the Cadastral number from your IBI (Impuesto sobre Bienes Inmuebles) receipt. The law firm can then manage the consultation process for you.

In summary, this value is a crucial factor in determining the taxable base for various property-related taxes in Spain. It’s intended to be an objective measure of a dwelling’s value based on market conditions and is established by analyzing data from the Cadastre.

From Cc  Lawyers providing service to clients in Alicante and other areas like Torrevieja or the Costablanca, we encourage you to contact our lawyers specialized in conveyancing where you have doubts about the home or second residence in Spain that you wish to purchase. Send us an IBI receipt showing the Cadastral number and our law firm will manage the consultation for you.

If you need to check for yourselves you can also do it in the Cadastro webpage where you can find the information in English here https://www1.sedecatastro.gob.es/Accesos/SECAccvr.aspx

Also, If you bought a bargain in Spain before 2022, the Spanish Treasury office might require you to pay extra! So what happens if the amount you paid was not the right one? They will require you to pay an extra amount according to their calculation. The tax office has up to 4 years to claim you to pay the difference.

If you receive the extra tax claim, you can appeal it. For appealing it you must get an appraisal, but if the tax authorities claim you the tax difference 3-4  years after you purchased it, the property value might have raised (renovations, higher market, etc.).

Cc Lawyers Alicante will check the minimum value of the property for you and will inform you if the sale price meets the tax office requirements so you know the exact tax that the purchase will cost you because knowing that information could make you go for one or another investment.

Checking the minimum value is included in our purchase service.

 

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USUCAPION-Acquisition of ownership by long use and continued possession – Spain

Explanation of the usucapion procedure as a fair and legal title to acquire a property.

What is usucapion? Usucapion in Spain is a way of acquiring ownership of a property through its continued possession. If we go to the etymology of the term, we can clearly understand its meaning: usucapion comes from the Latin words usus (use) and capere (acquire).

That is, if a person of legal age and legal capacity possesses an object without being its owner (normally real estate but it can be applied to any property) for a certain time, and under specific circumstances, through usucapion you can become the owner of said object.

It may happen that this object did not have a previous owner (typical case of unregistered land) or that it had a previous owner who, for whatever reason, would have allowed his right to expire.

Types of usucapions

The Spanish Civil Code establishes two types of usucapions: ordinary and extraordinary.

Ordinary usucapion requires a shorter prior possession – twenty years – but in return it entails two requirements: that the possessor acts in good faith and that he holds a fair title. We will expand on these concepts later.

The extraordinary usucapion requires a greater possession – thirty uninterrupted years – but in this case the two requirements that are requested in the ordinary one would no longer be necessary. Precisely for this reason and despite its name, the extraordinary is much more frequent than the ordinary.

Usucapion procedure in Spain

Obviously, to acquire a property or land through usucapion it is necessary to initiate a judicial procedure.

In this type of procedure – we are thinking of extraordinary usucapion, which paradoxically is the most common – the probative cornerstone is usually the one that allows proof of possession of more than three decades, which must also be uninterrupted.

We must focus on finding evidence that we owned that property more than thirty years ago, and that we also currently occupy it. We can use the payment of the ibi tax (tax on real estate paid every year), utility bills (water and electricity supply), invoices, etc.

If the Judge finds that we have enough evidence and we have proven the right, we will have a Judgment that will allow us to register our property in the Land Registry.

If this is your case, please contact us so we can help you register the property

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DONATION IN SPAIN

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TOURISTIC LICENCE IN SPAIN

The touristic licence is a permit that the city council grants so you can rent your property as a tourist accommodation and allows you to advertise it in tourist rental websites or if you would like a touristic company to rent it for you.

When is the rental considered touristic? (Art. 65. LAW 15/2018, June 7th, Generalitat, tourism, leisure, and hospitality in the Valencian Community)

Tourist accommodation refers to complete properties, which allow tourist use. This is any real-estate property that’s immediately available for repeat rentals to tourists for tourism, leisure, or holiday use.

Repeated rental is considered to exist when one of the following circumstances occurs with respect to the property:

  1. a) It is advertised for tourist use by companies managing tourist accommodation.
  2. b) It is made available to tourists, regardless of the period it is booked and if services of the hospitality industry are provided.
  3. c) When tourism marketing companies are used.

Basically, it is touristic rental when the property will not be the main residence of the tenant.

Which requirements does the property need to fulfil for touristic license?

  • All bedrooms and living room must have direct exterior ventilation.
  • Be fully furnished.
  • All the windows must have blinds to darken the light.
  • Have basic utilities for comfortable living.
  • Safety measures.
  • A book for complaints must be available for the tourists.

The documentation necessary and requirements changes from town to town.

In Alicante for example, you are only allowed to rent to tourists in very specific areas of the town and only if the property has direct access or is in the ground or first floor to not to disturb the neighbours.

In addition, you can only rent full properties and not just rooms.

You will need an architect to help you with a report to present it in the town hall so they can authorise the tourist rental. The process can take 2-3 months.

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EXEQUATUR-FOREIGN JUDGMENT ENFORCEMENT (NON EU)

After Brexit, if you need your UK Judgment to be enforced in Spain, the procedure to follow is the Exequatur proceedings, which is the enforcement of a non EU Judgment.

The procedure is similar to the enforcement of a European Judgment Enforcement.

The Enforcement of a Foreign Judgment in Spain is very common. If you have a Foreign Judgment or Court Order from your country against any person that resides in Spain, this Law Firm can enforce this foreign Court Order in the Spanish Courts directly.

Therefore, if you obtained a Judgment in your favor against someone residing in Spain, you can directly enforce the Judgment in a Spanish Court.

For example, if you have a Judgment against a debtor who moved to Alicante, you will need to hire a lawyer in Spain. Once you have hired a lawyer, you will need to send the original Judgment with an official translation and confirmation from the foreign court that the Judgment is final (that it has not been appealed) and that the defendant was served. Your Spanish lawyer will send to Court an Exequatur Claim, and the debtor will be served with the Enforcement Order in his Spanish residence address.

The Spanish Judge will order the enforcement directly without analyzing the case as if the Judgment was issued by a Spanish Court.

To act in Spain against the debtor you only need the original Court Order or the Judgment that you want to enforce. In some cases, you also need the certificate from the court that issued the court order proving the legality of the court order or  judgment.

Once we have started the proceedings here in Spain, and the Foreign Judgment is approved, the Court will search for the assets of the debtor and will be seized immediately.  The Spanish Judge will not review the court order, which means that the debtor will not be able to oppose the seizure of his/her assets.

This proceeding has been carried out successfully many times by this Law Firm so please ask us should you have a court order against a person residing in Spain.

Once you send us the relevant documentation, we will study the solvency of the debtor and inform you of the possibility to collect the debt through any properties.

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MILITARY AUTHORISATION TO BUY PROPERTY IN TORREVIEJA, ORIHUELA, MURCIA FOR UK RESIDENTS

MILITARY AUTHORISATION TO BUY PROPERTY IN TORREVIEJA, ORIHUELA, MURCIA FOR UK RESIDENTS

After Brexit, UK residents become non-EU foreigners and therefore they must apply for the military authorization to buy a property in certain areas of Spain. The areas included in the military protected area are Torrevieja, Orihuela (Alicante), Cartagena, Mar Menor area or Mazarrón (Murcia) and others like Galicia or the frontier with France or Portugal.

This obligation is regulated by the Law 8/1975, and the Royal Decree 689/1978. Although this law is considered outdated and many professionals in the area consider that it must be repealed, the law is in force and we have to bear in mind that now it also applies to UK residents that were not included in the past.

This military authorization has to be granted before signing the new Title Deeds (before completing the property purchase) and the Notary and Registrar have to request it. At present, the delay to get this authorization can be of 3 to 6 months.

The application form has to be presented in Barcelona in the Ministry of Defense office that deals with this, prior to complete the sale.

 

So, all non-EU nationals (except Switzerland and Norway) who want to buy a property in the before mentioned areas need to apply for it with the following documentation:

– A criminal record (obtained in their country of residence, legalized with the Apostille stamp and officially translated by a sworn translator)

– Photocopy of passport and/or residence card, officially translated by a sworn translator.

– Detailed plan of the house on a scale not less than 1/500 and a location map of the property.

-If the buyer does not fill the application in person, the representative or lawyer can do it with a power of attorney.

If you would like to know if the property you intend to purchase is in the military area please contact us https://spanish-lawyer.org/contact/

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San Juan Urbana Rio Park- off-plan deposit claim won against Sabadell Bank

We are happy to announce that we won a case at the 1st Instance Court in Alicante for a client who purchased a property to the developer SAN JUAN URBANA in Urbanización Río Park (Muchamiel-Alicante). Our case was based on Ley 57/68 and on the precedent set by the Judgement we won at the Spanish Supreme Court […]

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English Will but using Spanish Law so children can inherit

Case study-UK national Will but using Spanish Law so children can inherit

Facts

We have a case where a UK national made a Will choosing English Law, his nationality law. The testator only had a property in Spain, no other assets.

The testator left this property in Alicante (Spain) to his partner only and nothing to his children. This can be done according to English law but not Spanish law.  English Law also says that if the Estate is abroad then the Inheritance can be done according to the Laws in the country where the asset is located. In Spain, you are obliged to leave the inheritance to the children and then there is a share that you can leave to anybody.

The children did not agree with the partner getting all the Estate and contacted us. As the only asset of the Estate was the property in Spain, this inheritance will be ruled by Spanish Law, therefore the children have to get a share of the Estate according to Spanish Law.

So if your parents owned a property in Spain and resided in Spain but made a Will leaving the property to somebody else in a Will, we can help you with getting your share of the Spanish Estate. There are precedent and case law supporting this.

Please contact us. We will advise you about your specific case.

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Mortgage abusive clauses-CLAIM REFUND

Homeowners in Spain with a mortgage can claim now refunds from their bank. There are abusive clauses included in many mortgage contracts in Spain. An abusive clause is a  clause not transparent to the consumer who in the end is not aware of the terms and ends up paying more for the lack of transparency […]

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