What means…? explains terms and expressions related to the purchase, possession, rent or sale of a house in Spain / Andalusia.
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Most people hire a specialized lawyer/solicitor (abogado) for the purchase of their house because the legal situation in Spain is quite more complicated. In his legal investigation, he checks whether all buildings are legal, the type of ground, licenses, debts, etc. The lawyer can represent his client during the purchase and the registration process through a notarial Power of Attorney. He is registered under his individual license number at the concerning Board of Lawyers. Also, he has an obliged professional liability insurance.
The Agencia Estatal de Administración Tributaria (AEAT) or short Agencia Tributaria is the Spanish Tax Office.
Tax of 1,2% is paid over the official value in notarial deeds. The AJD Actos Juridicos Documentados you for example pay over New Build Declaration (Declaracion de Obra Nueva). In 2018 the law has changed and from this moment on the bank pays the AJD tax over mortgages.
The Apostle of The Hague (Apostilla de la Haya) is in an international quality mark certificate for official documents. It can be obtained through court (commonwealth office) in your own country.
The national Capital Gain Tax has the official name: Impuesto sobre Incremento de Patrimonio de la Venta de un Bien Inmueble. This tax at the moment is 19% over the profit from the seller (official selling worth minus purchase value according to the deeds / escritura). Certain costs can be deducted for both the sale and earliest purchase as long as you have bills plus proof of payment.
Next to the rental license of the RTA registry the Casa Rural needs an opening license that must be applied for at the Town Hall. If you comply with all technical and administrative requirements, that you can rent out the whole year (instead of only 3 months). Also, you can offer extra services as breakfast (in contrary to a Vivienda Rural).
The Catastro (Cadastre) is part of the state´s economical department and based on f.e. areal photos and technical drawings here the cadastral value is determined (valor catastral). The cadastral value is the base for the minimal fiscal value (valor minimo fiscal) which is multiplied by a coefficient that varies per town. Also the IBI (yearly council tax for the property) is derived from the cadastral value. Inscription in the Cadastre of course is compulsory, contrary to the Registro de la Propiedad which has another function.
The Comunidad de Propietarios is the Community of Owners for a building or living community.
The reservation contract (contrato de reserva) of the real estate agent by which the house will be taken off the market during the first part of the legal investigation of the lawyer/solicitor. It´s normal to pay a reservation fee between € 3.000 en € 5.000. Without payment, the reservation contract isn´t valid.
The contrato privado is the temporal private purchase contract of the lawyer/solicitor with which 10% of the house or terrain is paid (minus the already paid reservation fee). The seller demands the 10% as extra financial security until completion at the notary. Therefore the purchaser will put clauses in writing in the ´contrato privado´ in which conditions his money will be refunded if the sale doesn´t complete.
The Copia Simple is a version of the notarial deed (escritura) without attachments.
The notarial DON Declaracion de Obra Nueva (New Build Declaration) is sometimes needed to inscribe a house completely and correctly in the Registro de la Propiedad (Land Registry). You need an architect´s report and in the countryside, the architect must also make an Antiquity Declaration to prove that the responsibility of the Town Hall against the illegal building has expired. Over a D.O.N. Declaracion de Obra Nueva 1,2% AJD, Actos Juridicos Documentados tax or stamp duty (permanently lowered) is paid.
The DAFO or Declaracion Asimilacion Fuera de Ordanacion is an important certificate of the Town Hall. It states that a house in the countryside is built out of the official urban planning and so without a valid (building) permit. Is not obligatory but most buyers nowadays desire this certificate from the seller when they purchase. The DAFO proofs that there aren´t (or have been) any legal procedures against the property, what type of ground it concerns, that all buildings are old enough to not be sanctioned anymore and that all service facilities are according to the rules. It´s recommendable to include the costs in the initial price agreement and put them in the reservation contract of the real estate agent.
The escritura is the notarial deed that mostly are prepared by the lawyer/solicitor. It can concern all kinds of documents like compraventa (purchase deeds), escritura de herencia (inheritance deeds) of escritura de hipoteca (mortgage deeds).
A gestor is a Spanish professional that takes care of bookkeeping, administration, taxes and often also insurances (on commission base), like for a property or healthcare. A gestor is normally cheaper than a lawyer but doesn´t have the same legal knowledge when it comes to real estate. Check if your gestor has the optional quality trademark.
The Guardia Civil is part of the Police. If you have a home for holiday rental then you need to submit all individual bookings online to this service. Also, you are obliged to keep all documents for one year for potential inspections.
Hacienda is the Spanish Tax Office.
The IBI Impuestos de Bien Inmuebles is the yearly council tax over your real estate that is paid through/debited through the Patronato de Recaudacion. The tax is based on the minimal fiscal value and can be adjusted yearly. Mostly it is linked to the environmental tax (basura).
The real estate agent (inmobiliaria) brings offers and demand together in the housing market. Often seller and buyer have their own agent. If however, the agent represents both parties, he´ll get double commission (normally 5%) so this will have his preference. The agent(s) are usually paid by the vendor (Malaga province).
The IRNR is the income tax for non-fiscal residents with a property in Spain. The tax application should be actively done before the end of the year. It concerns the previous year per person per cadastral reference of the buildings. If you rent out on a short-time basis (less than 2 months), that you need to do your application every quarter. The IRNR doesn´t have anything to do with the IBI (this is paid or automatically debited in summer) and the application can be done by a gestor or lawyer.
The ITP is the transfer tax when buying a house. In Andalusia this is 7% ITP Transfer Tax (permanently lowered) and needs to be paid within 30 days after completion. For furniture applies a percentage of 4%. ITP doesn´t apply to New Build houses, for which IVA (VAT) and AJD (Actos Juridicos Documentados tax) are paid.
IVA is the VAT and at this moment in Spain it has a percentage of 21%. VAT is paid on a New Build promotion instead of the ITP transfer tax.
The Junta de Andalucia is the regional government of the autonomic state of Andalusia.
The Licencia de Apertura is the Opening License for a business like a restaurant, Bed & Breakfast or Casa Rural. It needs to be applied for by an architect through an architect´s report and you of course need to comply to certain technical and administrative requirements.
The Town Hall´s LPO or License of First Occupation was never part of the legal investigation of the lawyer when buying a house. Since the foundation of the RTA (Registro de Turismo Andalucia) in 2015 it however has become a point of attention if you buy an urban dwelling for renting out. The RTA namely can put a fine if you don´t have this license.
The Nota Simple is the extract of the Land Registry (Registro de la Propiedad). In the Nota Simple are properties described (per reference number, the ´referencia registral´), the owner(s) and debts (like tax, mortgage or encumbrance). In principle, you can only adjust the Nota Simple by an official deed of the notary (escritura).
El notario is the notary in person and la notaria is the notary´s office. It concerns a functionary of the Spanish state and he is not responsible for check of legality, debts, tax payment or correct inscription in the Catastro or Registro de la Propiedad. These are the responsibilities of the lawyer/solicitor.
The Oficina de Liquidadora is a government agency that checks if the right taxes are paid, for example for a purchase. With the right guarantee stamps, the deeds (escritura) then can be presented to the Land Registry (Registro de la Propiedad).
The Patronato de la Recaudacion is a government agency that takes care of local taxes like the IBI (yearly council tax), basura (environmental tax) and sometimes also the water bill of the municipality.
The PGOU is the urban zone planning of a municipality. Constructions in the countryside per definition aren´t within this planning and therefor in principle illegal (although mostly officially tolerated after 6 years).
The Plusvalia (Plusvalue) is the local profit tax over the increased value of the ground during the time of possession. The official name by the way has been changed, but the Spanish still refer to it as Pluvalia. When selling next to the Plusvalia you also need to pay the national Capital Gain Tax over the profit according to the deeds.
A Power of Attorney (poder) in Spain can only be signed in front of a notary. Most buyers give Power of Attorney to a lawyer. But it can also be to a real estate agent, gestor or non-professional. Of course, only the Spanish version is valid. It´s also possible to sign a PoA abroad at the Spanish consulate or at a notary (the Apostle of The Hague is needed).
The Registro de Pareja de Hecho is the Spanish partnership registry. Foreign registries are not acknowledged. To avoid high inheritance/probate tax is therefore wise to either get married or to get registered in the Registro de Pareja de Hecho. Of course, it´s also necessary to sign a (Spanish) will at the notary if you want to leave your Spanish assets to your partner.
The Registro de la Propiedad is the Land Registry in which ownership and debts are inscribed. The inscription isn´t obliged but really advisable because it offers more security than a private purchase contract. The extract according to the submitted deeds of the notary is called Nota Simple. The Land Registry is independent of the Cadastre and often data con match, especially in the countryside.
The Registro de Turismo de Andalucia grants rental licenses to urban and rustic properties for short-term rental. This means less than 2 months. The registration number must be made visible on the rental websites. Also, there are inspections to check if the houses comply with the basic requirements. If an urban dwelling doesn´t have a First Occupation License (Licencia de Primera Ocupacion), the owner can be fined.
The urbanization is a quarter or district. The Town Hall can sometimes charge costs to the owners if the urbanization hasn´t been administratively finished yet.
The minimal fiscal value (valor minimo fiscal) of a house will be calculated by a good lawyer befóre the purchase. This he does by multiplying the cadastral value with a coefficient that varies per town. For rustic properties, he´ll ask the Town Hall. Is the valor minimo fiscal higher than the purchase value? Then the ITP transfer tax will be calculated over this amount and the Tax Office will send an extra tax bill.
Official taxation for a mortgage by an acknowledged valuator. The mortgage is always counted over the lowest value between the valuation and purchase price based on the coverage percentage. In Spain it´s not very usual to have a valuation without a mortgage. In the countryside, the valuations are significantly lower than the commercial values.
The Vivienda Rural is the name for the VTAR rental license of the RTA (Registro Turismo Andalucia) for a house in the countryside. It´s a limited license for a maximum of 3 months rental a year. And you can´t offer extra services like break-fast. If this is too limited you can try to become a Casa Rural. For this, you need an Opening Licence (Licencia de Apertura) for a company at the Town Hall.
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©2023, Ariane van Wijk