As I mentioned in my previous letter, during the coming months I will be sending you useful information about the real estate business, as many owners or potential buyers are unsure of the exact process of the sale of their properties in Spain, the real estate market and/or information of interest for your property. Many times the selling or buying process of real estate is not a standard procedure and there are some important items to be checked. I have requested the collaboration of the reknown lawyer, Mr. Arturo Perez Gonzalez from Martinez Echevarria, Perez and Ferrero Lawyers, to give us an insight on the matter:
CURRENT SITUATION OF THE REAL ESTATE MARKET FROM THE POINT OF VIEW OF A LAWYER (PART I)
We know that the purchase or sale of a property must be made through a Notary Public, that it will generate certain expenses and taxes, that it is very convenient the registration of the operation at the relevant Land Registry, that the property must hold its municipal first occupation licence, etc. And in general, that it is equally very advisable the intervention of a real estate and/or legal professional, able to give you certain guarantees on what you are buying or selling, and its formalization.
However, independently from these generalities or what is obvious, from a legal point of view, as lawyer working in this field, I would like to highlight some other points which are not that obvious, that are not as “known” by the public in general, but which are not less important or decisive, to bear in mind, when you are going to buy or sell. And so, we can outline – in summary – the following:
A.- Urban Regulation General Plan (PGOU).-
The PGOU, as urban regulation instrument of a town or village and its municipality, whose temporary currency period is of a minimum of eight years, shall indicate to us at any given moment which urban qualification does our property have or that we wish to buy, and – very important – the surrounding area. And as the urban reality does change, as the Laws do constantly, it is very important to know, specially every time when a PGOU of a town or village is revised, what does that PGOU state for our property, in order to have the possibility of presenting a plea as may correspond regarding our rights and interests, within the legal deadline as established. All of this, without detriment to the Urban Regulation Law of Andalusia (LOUA), to which is subject each PGOU in Andalusia.
B.- Tax value.-
Every property has got a tax value, which is different from its cadastral value - which we can find in the annual Real Estate Property Tax receipts (IBI) – or from its market value.
Right now with the crisis, when the effect of sales with great discounts in the price is happening, we are going to find situations where, once declared in the public deeds the real price –market value- of the real estate transaction, this price is less or much less the tax value of the property being purchased. So, in these cases, the relevant Tax Office in charge of the Transfer Tax and Stamp Duty (ITP-AJD), prior payment of that Tax via self-declaration, shall issue to the buyer a complementary bill of that Tax for the difference between the declared price –market value- and the tax value corresponding to that property.
We will have to know then that tax value before formalizing the purchase or the sale, in order to quantify exactly the total figure of expenses and taxes that this operation will generate for the buyer.
Arturo Pérez González (Martinez Echevarría, Perez y Ferrero Abogados)
