Housing in 2014 continued rising

HOUSING sales in Spain have again for the third consecutive quarter risen, as 13.5% more houses were sold in the third quarter of the same period last year.

Sources in the Ministry of Development stated that the amount of sales completed before a notary between the months of July and September was 80,136. January to March also saw a rise of 48.5% in sales, with an additional 12% increase in the second quarter.

These are indeed encouraging statistics, especially when viewed with latest figures from the Institute of National Statistics (INE) which showed a 16% increase in October compared with the same month last year.

There`s still a way to go before reaching the same figures prior to the housing crash. The record remains for houses sold in a single at 251,649 homes, which was set in the second quarter of 2006.

Whilst 95% of transactions were for private houses, a majority of the resale market, just 15.1% of sales were for new homes. Even though signs of recovery are encouraging for the new homes market, a huge repository of houses still remain that need to also be sold. Slightly surprising is the fact that new housing sales are not rising quicker as stated recently in another report that new houses are being sold for less than the construction cost, enabling house buyers a unique opportunity which may not return for many years.

At the top the sales chart in the third quarter was Andalucia (16,360 transactions); that was followed by Valencia (12,116); then closely by Catalonia (11,983) and finally Madrid (10,272).

A major contributor to slaes figures were foreign residents of Spain. In the third quarter their purchases accounted for 12,764 transactions, which is an increase of 17.2%, the 13th quarterly rise.

Total number of sales to foreigners which also includes non-residents reached 13,789, or 17.2% of the total house purchases in that quarter.

The most popular areas were Alicante (3,323) Malaga (1,918), Barcelona (1,103), Madrid (839) and Tenerife (721).

The Catastral – the record of a Spanish property

Anyone who either owns or is planning to buy property in Spain needs to know about the Catastral value of the property (or Cadastre to use the French term).

Unlike the Land Registry, which records legal ownership and with which it is often confused, the Catastral is not a legal record of ownership, but is an estimate of the capital value of the property, which is used as a base figure for a number of property taxes. The easiest way to find the Catastral Value of a property is to check the amount listed on the IBI (local property tax) invoice or to visit the Catastral office in the town hall. However, note that the value should only be given to someone who can show a registered interest in the ownership of the property or their representative, which can make comparison with your neighbour’s difficult.

The value is drawn up by independent government employees using strict and complex valuation guidelines to ensure consistency. Initially, they depend upon a description of the property and its use, which is obtained by observation, licence applications and increasingly, studies of aerial photos. As the Catastral description lists the best estimates of the site’s registered boundaries, obtained from historical records, title deeds, agricultural ‘parcelas’, planning applications and any other source where change has been detected, it can be one of the more reliable sources of information and help to settle boundary disputes and the like. However, it is by no means infallible as it will not catch all extensions and changes, ranging from integral garages to bedrooms, structural problems, and the many other alterations that can be made to a property and that affect its value.

The ‘construido’, gross overwall external floor area is used, with allowance for open-sided covered areas being calculated at 50% and areas under 1.5m high being ignored. This can differ substantially from the ‘util’ or net internal floor area, which is an internal measurement used in construction and excludes external walls and certain other items.

Since the details used in the Nota Simple and the Catastral are obtained in different ways, it is not unusual for variations between these property descriptions to occur. The most frequent problem found here is that the Land Registry is compiled at the point of construction and it is a legal nicety that the sizes recorded are given by ‘declaration’ and are not guaranteed or checked by the Registrar or Notary or other independent body. Also, changes to the property thereafter are often not noted, which can also affect the Catastral records where there can also be discrepancies due to human error or failure to update information.

After the size and nature of the property are determined, a rate per square metre is applied to it. This rate is an estimate of the sale value of the property, calculated from actual registered sales and other property information. Naturally, this information has to be reviewed every few years in order to keep the comparative values of neighbouring properties relatively accurate. This is done on a municipality by municipality basis, so that all neighbouring properties are valued in a similar way. Unfortunately, this can mean that values of a few years ago can become the basis for a Catastral value that may not bear any real relationship to the current value of the land and property. This is certainly the case in Estepona where values have been based on sales in 2007, when prices could be up to twice what they are now. In the past, when sale values have been increasing over the years people have been less disturbed at the low Catastral values.

However, the main concern should not be the individual Catastral value, but its relationship to those of its neighbours. This is where consistency is essential so that everybody is treated in the same way. Equally, the level of value is really of little importance as it is the multiplier that is applied, by politicians and tax authorities, that decides how much actual monetary value it has. The Catastral value is used for calculating capital gain on a property when it is sold and also for the amount of IBI or local property tax that an owner has to pay each year.

It is possible to appeal the Catastral value of a property, but only at the time of revaluation. The timescale is short and the methodology is complex, so that unless there are gross errors it can often just add more expense without an effective result.

When purchasing a property it is important to have sight of both the Land Registry and the Catastral records to ensure that any errors are noted and corrected. If this is not done, it can be that the buyer will be responsible for obtaining licenses and/or paying fines for unauthorised works or even for changing the property back to its former legal state. Whilst conscientious solicitors may endeavour to assist the client in this way, a member of the Survey Spain Network of Chartered Surveyors will often be the only one to compare the size and use of the actual property to the recorded descriptions on the Nota Simple and Catastral records. Differences in these records to the actual building are often a means of identifying potential problems of ownership and/or legality. With this knowledge the potential buyer can then instruct his or her lawyer to ensure that corrections are made prior to purchase and at the cost of the seller.

Addendum: The Spanish tax authorities have announced that they intend to review 4.2 million Catastral values this year throughout Spain. That will almost certainly add to the value and increase to the likelihood of IBI and other property related taxes being raised.

Article courtesy of Campbell D. Ferguson, FRICS. Chartered Surveyor in Spain. www.surveyspain.com

Inheritance Tax‏ in Spain

Many people have been in my office, asking me what happens when a person dies in Spain, as far as their assets are concerned. Some were inheritors and others were trying to make things as easy as possible for their heirs when the day finally comes.

For most people, they want to make things as easy as possible for their heirs and a Spanish Will is the first step in the process. Many people think about making a Will but never actually get round to doing one.

Whatever people say to you regarding these three possible situations, there is a simple solution. A client told me the other day that he thought that the Spanish government would take everything if there was no Will. This is not the first time I have heard this rumour and it is totally unfounded.

There are three possible situations:

1. You have a Spanish Will
2. You only have an English Will or
3. You do not have a Will

1. The deceased person has made a Spanish Will

A. Some documents must be gathered

• The original death certificate. If the testator died in Spain, we have to apply for a Spanish death certificate, but if the testator died in England, the death certificate will need the Apostille affixed (Hague’s Convention). It will also need to be translated by an official Spanish translator, or by the Spanish Consulate in England.
• We also need to write to the “Registro de Últimas Voluntades” (Register of last Wills) in Madrid on your behalf so that they certify that a Will was made, that the Will in question was the last one and which Notary has the original documentation. Even if you already have a copy of the Will, we must write to the Register, so that they can certify that there is no other Will with a later date. Most solicitors have a collaborating firm lined up in Madrid to avoid the procedure by post which tends to be lengthy. In our case, we can obtain certification within two weeks.
• Gather the original escrituras de compraventa (title deeds) and bank account details. If you cannot find the deeds, do not panic, a certificate from the property register can be obtained and will work just as well.
• Your last Patrimonio declaration. If you have never made one, a written declaration to the effect of not having an estate worth more than 500,000 Euros.

B. You must have an acceptance document drafted, which must be signed in front of a Spanish Notary, exactly the same as when you are purchasing a property in Spain.

C. You then have one month to pay the inheritance tax or claim part or total exemption depending on your situation. The tax has to be paid in Madrid if both the deceased and the heirs are non-residents. If any of the people involved is a resident then one can present the forms at the local tax office. If the heirs are group 1 or 2 (spouses or direct descendants) there is a major benefit of Andalucían Jurisdiction (which you can only claim if the deceased or one of the heirs are residents in Andalucia and can prove it). The benefit consists of an exemption rate of 125,000 Euros for each heir instead of 16,000 Euros for each heir.

D. As soon as the Inheritance Tax has been paid or the exemption is claimed, you can go to the bank where the deceased person held his/her money and the bank will release the money to the person the Acceptance Escritura confirms has inherited.

When this is done, you must deal with whatever property you may have inherited. You must go to the property register and ask to register the Escritura of acceptance (In the same way one does when purchasing a property with the purchase escritura). It will take approximately one month for the register to be handed over to the registered title. After this deed is completed, plusvalia needs to be paid to the Town Hall to which the property belongs.

2. The testator has made a Will in England, which refers to his / her assets and properties worldwide

A. You must obtain the Grant of Probate in England. You must then get the Hague’s Apostille affixed and send it to an official translator in Spain, or to the Spanish Consulate in your home country. (If the English Will mentions the word “trust”, then you have a problem, as trusts do not exist in Spain).

B. You must take the same steps as if the translated document is a Spanish Will.

3. The deceased person has not made a Will.

A. If the deceased person is English, his heirs should appoint an English solicitor, who will need to obtain letters of Administration in England. You then need the Apostille affixed. Next, the document needs to be translated by the Spanish Consulate in England, or by an official translator in Spain.

B. Then we take the same steps, as if the translated document is a Spanish Will.

IMPORTANT THINGS TO REMEMBER

• From the moment of death, the heirs have a maximum of six months to pay the death duties. If you do not think you can sort things out within that time limit, you can ask for a 6 month extension, but you must ask for it in writing, within the first five months.
• Any document signed by an English public official will need the Apostille affixed before it is valid in Spain.
• Any document that is written in English will need to be officially translated, before it is valid in Spain (Consulate or official translator).
• The information I have provided is only a guideline and in no way substitutes my legal advice for your own particular situation.

There is no doubt that the best situation is to have a Will in your country of origin concerning your home assets and one in Spain for your Spanish assets. This will avoid a heavy legal bill later on and save a lot of time and distress.

In the absence of a last Will and testament, you will need judicial or notary documents declaring you are a legitimate heir and provide evidence of the laws of the late person’s country of origin in order to justify your claim to the inheritance. These documents, together with the rest of the papers required to formalize the inheritance, will then be taken to a Notary to allocate the inheritance.

By Raquel Perez

Part 8 – Spanish Bank Accounts

The accounts of residents and non-residents differ in that different regulations apply to money transfers for the resident and the non-resident. The main difference is that Spanish withholding tax of 19% is not withheld from the non-resident account.

If you are a resident, 19% of your interest earnings will be withheld and paid to the Spanish tax authorities in your name, just as for Spaniards.

If you are a non-resident, no tax will be withheld, but you will be liable for tax in your country of residence.

Any bank transaction of more than 3,000 euros requires the payor and the payee of the amount to be identified.

Some banks charge more than 4% when transferring money out of Spain. Other banks charge fees of around 21 euros per 6,000 euros of transfer so make sure you discuss the conditions which apply to your bank account at the time you open it.

I feel I should add that there are many Spanish banks, and each has a plethora of accounts to choose from. To be sure you get the right kind of account for you I would recommend taking a Spanish speaker with you. There are free-to-run accounts, and accounts with monthly charges, as there are in most countries. Some are NOT cheap so beware and be sure the bank gives you full details of any and all charges associated with running your account. I have been with Solbank (part of Banco Sabadell) since arriving in Spain. There are minor charges monthly but I hardly notice and the service I receive far outways the cost. I am not “recommending” them, just saying I have had no problems with them in over eight years.

So that’s it! All you need to know before you buy or sell a property in Spain!

All eight parts of the series will always be here for your reference. Of course, as and when changes are made to the processes or fees and taxes I will make the necessary updates.

Permalink: Spanish Property: The Buying/Selling Process

Once again, a big thank you to Raquel Perez at Perez Legal Group for providing the information.

Tel: +34 952 833 169

www.perezlegalgroup.es

Part 7 – Spanish Wills and Inheritance Tax

Should I have a Spanish will?

If a non-resident dies in Spain, without a will, the estate in Spain will be distributed according to the Spanish laws of inheritance.

Let us take as an example a man who dies leaving 3 children and a spouse. The only property is the house they are living in. If the widow’s name is in the title as half-owner, she continues to own half the house. The other half of the house constitutes the estate which is divided equally between the 3 children. When the estate is settled, each child will own one third of the title in half of the house, i.e. each of them owns one sixth of the house, and the title deed has four names on it (the widow and each of the three children). The widow is, however, entitled to hold a usufruct (lifetime use) of the children’s share. This means she can stay in the property until she dies.

However, all parties must then agree and sign the deeds if the house is to be sold. It is this provision of inheritance law that causes the situation frequently seen in the Spanish countryside and villages where six brothers are part-owners of a finca.

Dying without a will can give rise to time-consuming and expensive legal procedures for your heirs, so if you really want to look after them and if you have definite ideas about how you want your estate to be apportioned, you should make a Spanish will. It is a simple procedure and you will feel more secure.

All the tax rates and exemptions refer to national inheritance law, and apply to almost all non-residents. Residents will find regional differences.

Spanish Will

There are four points to consider:

1. You should make a Spanish will which disposes of your Spanish property in order to avoid time-consuming and expensive legal problems for your heirs. Make a separate will to dispose of assets located outside Spain.
2. As a foreigner, Spanish law does not require you to be subject to the Spanish law on the statutory division among the heirs according to which you must leave two-thirds of your estate to your children. Most foreigners enjoy free disposition of their estate so that you can bequeath your Spanish property to any person of your choice as long as your own national law allows this. Your estate will, however, be subject to Spanish inheritance tax, which can be high when property is left by a non-resident to non-relatives. The law also states that any foreigner officially resident in Spain is subject to Spanish inheritance tax on his worldwide estate. However, in practice the authorities will not ask the testator if he or she is an official resident or not. The only requirement enforced by Spain is the payment of the inheritance tax on the property or assets held in Spain.
3. There are a few ways around the inheritance tax and these legal ways require advance planning. Spanish law does not allow any large exemption from inheritance tax, as many other countries do where the family home is concerned. Tax is payable after the first 16,000 euros for each beneficiary.
4. If you are an official resident of Spain leaving your property to a spouse or child who is also resident, you may be eligible for a 95% reduction in the value of the property for inheritance tax calculation. This is not available to non residents, and the reduction applies to the first 120,000 euros.

Amongst the perfect legal possibilities is the formation of a family corporation or “trust”, in which the family’s assets pass into the hands of the company, with each family member becoming a director of the company. So when one member of the company dies, it involves only a reorganisation of the board of directors and a transfer of some of the company shares, thus ensuring very little tax.

However, in Spain, trust documents do not exist under Spanish law, so instead a Spanish company is used.

Equity Release, Reverse Mortgage

A wide variety of plans are now available from Spanish lenders. You may borrow half the value of the property and pay back nothing until the property is sold or you die, at which time the full amount plus interest becomes due. Your heirs can repay the loan and take possession of the property or sell the property and repay the loan, dividing up whatever is left over. As the loan is a charge against the property, the inheritance tax is greatly reduced.

Offshore Company

For non-Spaniards, the constitution of a Gibraltar based company or other offshore operation in order to own property in Spain has been another way to avoid Spanish inheritance taxes. When the founder of the company dies, he leaves his shares in the company to whomever he chooses, in a will made outside Spain. As far as the Spanish authorities are concerned, the same company continues to own the property and no transfer has taken place, hence there is no tax or any other costs to pay.

Four Year Limit

The statute of limitations on inheritance tax runs out after four years. The state cannot collect the tax once four years have elapsed. At the end of this time the beneficiary opens the will and applies to register the property, free of any inheritance tax, in his name. Spanish law requires that an inheritance be declared within six months of the death. If not you can be subject to a surcharge of 35% on the tax due. This period of six months is included in the statute of limitations, so in reality four years and six months is the period for prescription.

Power of Attorney

Many foreigners have been confused by the reference in English to an “enduring power of attorney”. This POA does not mean that it endures beyond the death of the person who grants it. A POA dies with its maker, in Spain and in the UK. The “enduring” only means that it has no other fixed date of expiry.

Part8: Spanish Bank Accounts – Available Wednesday 28th

The accounts of residents and non-residents differ in that different regulations apply to money transfers for the resident and the non-resident. The main difference is that Spanish withholding tax of 19% is not withheld from the non-resident account. Continued tomorrow…

Tel: +34 952 833 169

www.perezlegalgroup.es

Part 5 – Tax Advantages For Residents

Foreigners sometimes believe that taking out an official residence permit in Spain will cost more money and expose them to Spanish taxes which non-residents can avoid. The reverse is actually true. The resident property owner has a number of tax advantages over the non-resident.

Exemption From Capital Gains Tax

(Under the following circumstances)

Residents over 65

An official resident of Spain aged 65 or more who has lived in a principle residence for three years is not subject to CGT when selling the residence. If you are 65 or over and hold a Spanish residence permit or the EU certificate of registration, you can buy a principal residence this year, live in for three years and sell it on with no capital gains tax to pay.

Residents reinvesting profits in a new home

An official resident of Spain who reinvests all the proceeds of a house sale in the purchase of another Spanish residence as a principal residence will have complete relief from CGT. If a portion of the total amount of the house sale is used, a percentage of relief up to the amount invested will be granted. However, the seller must have lived in the home for three years to qualify.

Holders of usufruct
These are people who have the right to live in a property until their death. A person of 65 or older who has a contract with a company to sell a principle residence in exchange for a lifetime right to inhabit the property and a monthly stipend will not be subject to tax. This makes such deals to turn home ownership into lifetime income more attractive for older persons of modest means. The right to inhabit the property is called “usufructo”.

3% Retnetion Not Applicable

If you are a resident and you sell your property, you are not subject to having 3% of the total purchase price withheld and deposited with Spain’s tax authorities as a guarantee against your capital gains tax liability. Also, any tax payable on the sale will not be due until the following year. A non-resident must however declare and pay within 30 days.

95% Reduction in Inheritance Tax

Official residents of Spain who leave their principle residence to a wife or to children, who are also official residents, may be eligible for a 95% reduction in their tax base under the national law. This is 99.9% in Andalusia.

Three conditions apply to be eligible for this reduction:

1. You must have held an official residence permit for at least three years.
2. The home you bequeath must be your principle residence and you must have lived in it for at least 3 years.
3. The heirs must undertake not to sell the property for 10 years, or for 5 years in many regions. If they do, they are subject to taxation.

This reduction applies only up to a maximum of 120,000 euros. For example if the inheritance is a property worth 120,000 euros, you can reduce this total by 95%, deducting 114,000 euros, and therefore only paying tax on 6,000 euros, i.e. no tax at all.

This reduction is also available for a principal dwelling left to a brother or sister over 65 years of age who has been living with the testator for the previous two years. The reduction does not apply to any other assets, such as cars, yachts or shares in companies, only to the home itself.

Annual Imputed Income Tax Not Applicable

Spanish property owner’s imputed income tax does not apply to the owner’s principal residence. A resident of Spain also has an exemption, which ended in 2007, on the first 108,000 euros of valuation for Spanish capital assets tax.

Unlimited Stay

If you actually live most of the year in Spain as a non-resident, then you are breaking the law as it says that your tourist stay, even as a European Union citizen, is limited to 180 days per year. You can be fined 300 euros if you over-stay this limit.

Resident Pays Captial Gains Tax As Income Tax

A resident pays CGT as part of income tax, so if you sell in 2009, you do not declare the tax until May of 2010 when you file for Spanish income tax. In Spanish, the capital gains is called “incremento de patrimonio”. Until 2007, the resident had his capital gain taxed at a maximum rate of 15%. Under the new law, this is 19%, i.e. just under 20,000 euros on a profit of 108,000 euros.

Residence Permits

The Spanish Royal Decree 240/2007 went into force in 2007 ending the need for EU citizens to obtain a residence card in Spain. EU citizens are now issued with a certificate of registration which also contains the EU citizen’s NIE number. Only citizens of the EU are entitled to this certificate (including the European Economic Area and Switzerland). All other nationals must apply for cards as before and this also applies to non-EU family members of an EU citizen.

Part 6: Registration At Your Town Hall – Available Monday 26th

The “Padrón” is the list of all the people who live in a certain town. “Empadronarse” is the act of registering yourself on this list at your local Town Hall. Continued tomorrow…

Tel: +34 952 833 169

www.perezlegalgroup.es

Higher Real Estate Coverage for Spanish Banks

Ratings agency, Fitch Ratings, have released a report with a correction to the Bank of Spain figures for banks’ total problematic real-estate exposure.

A Necessary Step Forward but Important Challenges Ahead

Mandatory Real Estate Cover

One of the measures taken by Spain’s new government to stimulate credit and promote economic growth is the reform of the banking system, with a focus on imposing more demanding coverage levels on banks’ real estate (RE) exposures through income statement provisions and capital buffers. These requirements will place significant pressure on banks’ stretched income statements and capital management strategies at a time when Spain enters into recession, stimulating consolidation.

Neutral Rating Implications

From the information available to date, Fitch Ratings believes that there are a number of institutions, mostly the largest ones, including the two large international Spanish banks, that are able to meet both the new provisioning and capital buffers, without any impact on their ratings. This is because of the one-off nature of the reform in 2012.

Negative Rating Implications

Smaller banks, particularly those with capital injections from the state‟s Fund for Orderly Banking Restructuring (FROB), will face difficulties in complying with requirements in just one year, given their low revenue generation capacity (which could lead to losses) and tighter capital, and will be forced to merge. For the stronger institutions that merge with weaker institutions, there will be downward rating pressure from the potential weakening of their risk profile, additional provisioning and capital needs, and execution risks.

You can see the full report “Higher Real Estate Coverage for Spanish Banks” on www.fitchratings.com.

Part 2 – Purchasing a new property off-plan

Purchasing a property off plan in Spain means you pay in advance for a property not yet built. However, you make great savings in the end. This is because the builder gives very favourable terms to the buyer because the buyer is financing the project and the property will have increased in value when it is eventually finished.

The costs associated with purchasing a new property are slightly different to those for a resale. ITP (transfer tax) is no longer applicable since you are purchasing from a developer, and instead you pay 4% of IVA (VAT) and 1.20% of AJD (stamp duty). Both taxes are based on the purchase price.

The “plusvalia”, as previously mentioned, may be payable by the buyer or the vendor, as agreed in the contract. Other costs are the same as the resale property, i.e. the notary and land registry fees.

It is very important to appoint a legal representative when purchasing “off plan” so that this representative can check that all the necessary licences are in place. The good news is that a new Andalusian decree has been introduced to protect the consumer. Since February 2007, all developers are obliged to supply a complete information package to a prospective buyer. The documents include papers identifying the builder, the planner, the project manager and the developer and any other intermediary involved in the sale. It also includes the floor plans, building specifications, dimensions, delivery date, terms and conditions of the sale, property registration details, and information on the building insurance that protects the buyer should the builder not complete the project.

Spanish law requires that the purchase contract must contain the delivery date with a penalty clause, specifying that the property must be handed over within “x” days of the first occupation licence being issued.

The developer must also provide bank guarantees for the payment made when private purchase contracts are signed and any further payments made during the construction period.

Your lawyer or property consultant will request and check the following:

• The construction specifications
• The specifications of the materials used
• Details of the communal areas
• Bank guarantee details
• The contract
• Whether the developer or purchaser will pay the plusvalia tax
• Whether the developer can offer a mortgage
• If the 10 year insurance policy covers defects on the property.

The developer is responsible for attending to defects at the moment the property has been handed over:

• Up to 1 year for any snagging defects
• Up to 3 years for any minor defects
• Up to 10 years for any structural defects

Part 3: Selling Your Property – Available Wednesday, March 21st

When you find a buyer for your property, you will first receive a reservation fee, at which time you must take the property off the market. The private purchase contract is then signed within a specified time frame and you will receive a full 10% deposit on signature of the contract. The private purchase contract will stipulate all the terms and conditions of the sale, including the final date by which the balance of the sales price must be paid and title deeds signed before the notary public. Continued tomorrow…

Tel: +34 952 833 169

www.perezlegalgroup.es

The Nota Simple Explained

A Nota Simple is an official extract report that contains a full property description and can be obtained from the local property title registry office or, by subscribers, over the Internet. This is a very important document in Spain, as it contains information about the legal status of a property. If you intend to buy a property of any kind, it is very important to know who is the registered owner, what is the registered description, and what legal charges or restrictions are registered against the property.

The information contained in the Nota Simple includes:

• The current owner(s), their relationships and when they bought it;
• Any debts secured on it that must be paid before its ownership can be transferred e.g. mortgages, unpaid taxes, community debts, private debts, etc.;
• The boundaries of the property, though these are often hazily described as just the land owned by their neighbour;
• The total square metres of the land and the gross overwall area of all built structures;
• The use of the property (whether residential, agricultural, etc);
• The rights that others may have on the property e.g. public paths and rights of way, roads, water, sewage, etc.;
• The share of the costs of the community of owners in which it lies;
• And if you are really fortunate, the Catastral reference.

Before you request a Nota Simple, you will need to provide the following information:

The full name of the individual owner or owning company. Ideally, but not essentially, you should also have the NIE, CIF or passport number.

or

The Property Registry data, which can be either the Finca number or the unique identification number: IDUFIR.

With either of these sets of information you can carry out a search of the whole of Spain and obtain details on all the property owned by an individual or company. As there can be many owners with similar names, it’s best if you can restrict the search ideally to the minimum of which registry office the property is registered in.

You can obtain a Nota Simple in Spanish, from the land registry and this can be requested in person at any registry office. Alternatively, go online where requests are usually obtained within 24-48 hours. In both methods there is a small charge. Alternatively, ask somebody with a subscription to obtain information for you.

As stated above, the Nota Simple will contain information as to whether there are debts associated with the property. It is possible for debts of an individual to be attached to the property he owns although they may have no other link to the property itself. Be aware that if there are debts attached to the property, then it is essential that they are cleared before the ownership is passed over to the buyer, otherwise they will remain and become the responsibility of the new owner.

Inaccuracies

You may find, on receipt of the Nota Simple that its description is not the same as the actual property. An error in the description of either accommodation or the floor area is important and should be rectified by the seller prior to the sale. It may be that improvements have been carried out on the property and their absence on the document is sometimes an indication that work has been carried out without permission.

Inaccuracies may also mean that a mortgage valuer working for a Spanish lender or insurer could have to value on a reduced basis, as they are obliged by law to use the lesser of the actual area and that recorded in the title, whenever there is a difference between the two. Outbuildings such as garages, stores and even swimming pools should be recorded too, as this all affects the value of a property. However, unless you have an excellent grip of Spanish or are adept at dealing with Spanish bureaucracy, it is recommended that the Nota Simple is discussed with a legal expert or property professional, to make sure that all is in order and the property meets your requirements.

More Information

If you would like more information about the Nota Simple and how it could affect you, the team at Survey Spain Network is available to offer informed help and advice. We have the advantage of carrying out Acquisition Surveys of the building and being able to compare the actual property with the Nota Simple and the Catastral description (see other article) and thus make sure that differences are caught prior to purchase, so that correcting them remains the responsibility of the seller and is not transferred to the buyer, at his or her future cost.

Article courtesy of Campbell D. Ferguson, Survey Spain Network – www.surveyspain.com

Spanish Legal Property Information

Starting next week, and thanks to Perez Legal Group, I will be bringing you a series of articles detailing all you need to know before you buy or sell a property in Spain.

The first section, Purchasing a resale property in Spain, will be available on Monday and will cover the following:

• Costs of purchasing
• Appointing a legal representative
• Power of attorney
• Deciding on a property
• The private purchase contract
• Mortgages
• Due diligence
• The title deed and registration
• Property values

There will be eight articles, one per day (not including weekends). Here is the full list:

1. Purchasing a Resale property in Spain
2. Purchasing a New property off-plan
3. Selling your property
4. Annual property and income taxes
5. Tax advantages for residents
6. Registration in your town hall (Empadronamiento)
7. Spanish wills and inheritance tax
8. Spanish bank accounts

Buying or selling a property can be daunting wherever you are. Here in Spain it can be very complicated and it is always advisable to appoint a legal representative to help you.

However, this series aims to bring you as much information as possible to make your sale or purchase slightly less painful and to prepare you for what may be a long process.

Enter your email address on the right or follow on Twitter to ensure you receive all the articles. They contain invaluable information!

Thanks to Perez Legal Group for the information.

Tel: +34 952 833 169

www.perezlegalgroup.es