conveyancing | C&D Solicitors

Due Diligence (rechtliche Untersuchung) des Anwalts in Spanien

Geschrieben von Ariane van Wijk am 22 November, 2023. Veröffentlicht in andalusia, conveyancing, Unkategorisiert.

Aufgrund unserer täglichen Berufserfahrung als spezialisierte Immobilienanwälte können wir die Bedeutung einer ordnungsgemäßen Rechtsberatung während des Kaufprozesses in Form einer Due Diligence (rechtliche Untersuchung) nicht genug betonen. Schließlich erfordert Ihr Auslandskauf eine erhebliche finanzielle Investition, unabhängig davon, ob Sie eine Privatperson oder ein Unternehmen sind, ob die Immobilie als Eigenheim oder zu Mietinvestitionszwecken genutzt wird.

Es ist nicht möglich, einem Immobilienkäufer oder -investor eine angemessene Rechtsberatung zu bieten, es sei denn, es gibt einen Prozess zur Untersuchung der rechtlichen/planerischen, physischen und steuerlichen Situation der Immobilie. Ein Prozess, der vor der Unterzeichnung des privaten Kaufvertrags stattfinden sollte. Wenn diese vollständige Untersuchung der Immobilie und ihrer Gesamtsituation nicht schriftlich in einem Dokument zum Ausdruck kommt, das üblicherweise als „Immobilien-Due-Diligence“ oder „Immobilien-Rechtsbericht“ bezeichnet wird, ist es sehr schwierig, sich auf alle Informationen zu verlassen, die ein Käufer/Investor erhält Das muss jeder wissen, bevor er sich vertraglich an den Kauf einer Immobilie bindet.

In diesem Fall beziehen wir uns nicht nur auf Käufer, da Immobilieneigentümer oder -inhaber, die eine Immobilie in Andalusien verkaufen möchten, zunehmend eine Immobilien-Due-Diligence-Prüfung einfordern. Um mögliche Probleme oder Mängel in der rechtlichen Dokumentation der Immobilie zu erkennen und zu beheben. Diese rechtliche Checkliste vor dem Verkauf der Immobilie hilft dem Eigentümer, den aus dem Verkauf erzielbaren Gewinn zu maximieren und ihn so schnell wie möglich abzuwickeln.

Was ist der Immobilien-Due-Diligence-Bericht bei der Immobilienübertragung?

Der Immobilien-Due-Diligence-Bericht oder Rechtsbericht ist ein juristisches Dokument, das jeder auf Immobilienrecht spezialisierte Anwalt erstellen und einem Mandanten zusenden sollte. Unabhängig davon, ob er oder sie kauft oder verkauft, erläutern wir alle rechtlichen und planungstechnischen Umstände der Immobilie, die er oder sie kaufen oder verkaufen möchte. Dieses Dokument sollte alle relevanten rechtlichen, planungstechnischen und steuerlichen Informationen der Immobilie enthalten, sodass ein Käufer über alle erforderlichen Informationen verfügt, um die zufriedenstellendste Investitionsentscheidung in Bezug auf die Immobilie zu treffen. Und dass ein Käufer die größtmögliche Rechtssicherheit hinsichtlich seiner Investition erhält.

Auch aus rechtlicher Sicht bindet dieses Dokument den Anwalt an den Mandanten und ermöglicht die Definition der durchgeführten juristischen Arbeit. Darüber hinaus schaffen wir Sicherheit während des Übertragungsprozesses durch die detaillierten Informationen, die dem Käufer im rechtlichen Due-Diligence-Bericht erläutert werden.

Warum ist eine grundstücksrechtliche Untersuchung so wichtig, wenn ich eine Immobilie kaufe?

Die Antwort ist einfach: Denn dieses Dokument gibt Ihnen als Käufer Rechtssicherheit. Darin finden Sie alle relevanten Informationen über die Immobilie, die Sie erwerben möchten, in schriftlicher Form und erleichtern so das Verstehen und Nachvollziehen sowie eine Erläuterung aller in diesem Prozess untersuchten Punkte. Ebenso umfasst dieses Dokument Sachverhalte, die zum Zeitpunkt der Erstellung des Berichts noch nicht geklärt waren, die noch ausstehen oder aus anderen Gründen nicht geklärt werden können.

Dieser Bericht verhindert oder verringert die Wahrscheinlichkeit, dass der Käufer während des Übertragungsprozesses und danach, sobald der private Kaufvertrag oder sogar die öffentliche Kaufurkunde unterzeichnet wurde, auf Probleme stößt. Hierbei handelt es sich häufig um Probleme, die, wenn sie dem Käufer im Voraus bekannt wären, zu Verhandlungen mit dem Verkäufer vor der Unterzeichnung des Privatvertrags führen oder sogar zum Abbruch des Kaufprozesses führen könnten.

Was sollte die Immobilien-Due-Diligence oder der Rechtsbericht enthalten?

Eine Immobilien-Due-Diligence-Prüfung ist wie ein maßgeschneiderter Anzug, was bedeutet, dass dieses Dokument und sein Inhalt vom Profil des Kunden und der beabsichtigten Nutzung der Immobilie abhängen.

1. REGISTRIERSTATUS

Der allgemeine Teil dieses Dokuments besteht unabhängig von der Art des Kaufzwecks darin, die Kataster- (Catastro) und Registerbeschreibung (Registro de la Propiedad) der Immobilie zu überprüfen und festzustellen, wie sie mit der physischen Realität übereinstimmt.

2. SCHULDEN

Ebenso die Prüfung möglicher Grundbucheinträge oder sonstiger Belastungen, wie etwa das Bestehen von Hypotheken, Dienstbarkeiten, Pfandrechten oder Pfändungen. Ein guter Anwalt für Immobilienrecht prüft auch, ob keine Schulden aus den Dienstleistungen (Wasser, Strom usw.), der Gemeindesteuer oder der Eigentümergemeinschaft bestehen.

3. DETAILS RATHAUS UND URBANISIERUNG

Es ist auch wichtig, mögliche Verwaltungsdienstbarkeiten wie Straßen, Küsten, das öffentliche Wassergebiet und die Situation mit der Eigentümergemeinschaft und möglichen Schulden oder Sonderveranlagungen zu prüfen.

4. (KOMMERZIELLE) LIZENZEN

Sehr wichtig ist auch die Untersuchung der Planungssituation der Immobilie. In diesem Fall hängt die Untersuchung von der beabsichtigten Nutzung der Immobilie ab: Hotel, Ferienhaus, Gewerbeimmobilie, Wohnhaus, industrielle Nutzung usw. Zu diesem Zeitpunkt wird in der Regel ein Techniker hinzugezogen, der eine Strukturuntersuchung oder Checkliste durchführt.

5. STEUERLICHE AUSWIRKUNGEN

Schließlich ist eine Steuerprüfung beim Immobilienkauf sehr wichtig, insbesondere beim Kauf durch Kapitalanlagegesellschaften und Investmentfonds. Diese müssen eine Bewertung dieser Vermögenswerte einholen und eine Grundsteuerplanung für den Erwerb der Immobilie durchführen, um Steuern zu sparen und die Steuerbelastung zu verringern.

Wann sollte ein Kunde die Immobilien-Due-Diligence-Prüfung erhalten?

Die Immobilien-Due-Diligence-Prüfung sollte vor der Unterzeichnung des privaten Kaufvertrags erstellt werden. Dabei handelt es sich in der Regel um eine Zahlung von 10 % des Verkaufspreises durch den Käufer. Mit anderen Worten: Wichtig ist, dass der Käufer alle rechtlichen, planerischen und steuerlichen Informationen der Immobilie kennt, bevor er während des Prozesses einen erheblichen Geldbetrag zahlt und den Privatvertrag unterzeichnet. Im Immobilienbereich wird die Immobilien-Due-Diligence-Prüfung in der Regel nach der Unterzeichnung des Reservierungsvertrags mit der Zahlung einer kleinen Anzahlung und vor der Unterzeichnung des privaten Kaufvertrags vorbereitet.

Wenn der Käufer vorab alle relevanten und wichtigen Informationen zur Immobilie erhält, hat er deutlich mehr Rechtssicherheit bei der Investition. Und wenn es irgendwelche Probleme oder Probleme gibt, können diese mit dem Verkäufer ausgehandelt und die Situation im privaten Kaufvertrag berücksichtigt werden. Dies wird sich positiv auf den Prozess auswirken, Stress reduzieren und die Wahrscheinlichkeit verringern, dass der Prozess für beide Seiten nicht zufriedenstellend endet.

Andernfalls könnte es zu Problemen zwischen Käufer und Verkäufer kommen, wenn ein privater Vertrag unterzeichnet und eine erhebliche Zahlung an den Verkäufer geleistet wird, ohne die rechtliche, planungstechnische und steuerliche Situation der Immobilie zu kennen. Wenn es in diesem Fall Probleme mit der betreffenden Immobilie gibt, der Verkäufer jedoch bei der Vertragsunterzeichnung nicht darüber informiert wurde, kann es sein, dass der Vertrag den Käufer nicht ausreichend schützt.
Oder es kann dazu führen, dass der Verkäufer das Gefühl hat, dass er mit 10 % des Preises in der Tasche und einem unterschriebenen Vertrag bei der Aushandlung von Änderungen, die sich auf den Verkaufspreis oder die Verpflichtungen der Parteien auswirken, die Oberhand hat.

Wer ist der richtige Fachmann für die Erstellung einer Immobilien-Due-Diligence?

Zweifellos ist ein auf Immobilienrecht spezialisierter Anwalt der richtige Fachmann für die Erstellung dieses wichtigen Dokuments beim Kauf oder Verkauf einer Immobilie in Spanien. Eine Investition von bestimmter Höhe in eine Immobilie zu tätigen und dabei die Kosten für einen Anwalt zu sparen, ist ein Lehrbuchfehler und macht absolut keinen Sinn, da die Kosten für einen Anwalt im Vergleich zu allen Kosten eines Immobilienkaufs recht gering sind.

Seien Sie vorsichtig bei allen, die Sie davon abhalten, beim Kauf einer Immobilie in Spanien einen unabhängigen Anwalt zu beauftragen, insbesondere wenn diese Person ein Interesse an der Transaktion hat. Suchen Sie den Anwalt auf, von dem Sie glauben, dass er Sie aufgrund seiner Erfahrungen und Bewertungen am besten bei Ihrem Kauf beraten kann. Vergleichen Sie die auf der Website des Anwalts verfügbaren Informationen zu den angebotenen Leistungen mit den Informationen, die Sie nach dem ersten Kontakt mit dem Anwalt erhalten. Stellen Sie sicher, dass dieser Anwalt ein Experte für Immobilienrecht ist und sich mit der Materie auskennt.

Warum ist die rechtliche Untersuchung einer Immobilie wichtig, wenn ich eine Immobilie verkaufe?

Es wird dringend empfohlen, für eine Immobilie, die Sie verkaufen möchten, eine Immobilien-Due-Diligence-Prüfung einzuholen, da der Eigentümer vor dem Verkauf etwaige Probleme oder Probleme mit der Immobilie erkennen und lösen kann. Wenn der Eigentümer die potenziellen Probleme der Immobilie vor dem Verkauf erkennt, behebt und löst, ist es sehr wahrscheinlich, dass der aus dem Verkauf erzielte Gewinn maximiert werden kann, da der Käufer mit der rechtlichen Situation der Immobilie zufriedener ist Eigentum und die Transaktion wird schneller sein.

Wenn der Verkäufer sich zuvor vergewissert hat, dass alle Unterlagen korrekt sind und die erforderlichen Genehmigungen vorliegen, eine Immobilie auf den Markt bringen, kann dies dazu führen, dass der Käufer den Verkauf schneller abschließen kann, und es werden weniger Argumente für eine Reduzierung des Immobilienpreises zur Verfügung stehen .

Auf die Due Diligence von Immobilien in Andalusien spezialisierte Anwaltskanzlei

Das Team von C&D Solicitors Malaga, Andalusien

Bei C&D Solicitors sind wir auf die Immobilienberatung für ausländische Kunden spezialisiert, unabhängig davon, ob es sich um Privatpersonen handelt, die in Spanien ein Zweithaus oder eine als Finanzinvestition gehaltene Immobilie kaufen möchten, oder um Investmentgesellschaften oder Investmentfonds, die ihr Vermögensportfolio erweitern und von den Kapitalgewinnen profitieren möchten können sie auf dem Immobilienmarkt und im Immobilienbetrieb erhalten.

Wir bieten während des gesamten Prozesses „Full-Service“-Beratung in Ihrer Muttersprache: Englisch, Niederländisch, Schwedisch, Französisch und Deutsch. Sie können uns unter 0034 – 952 532 582 anrufen, uns eine WhatsApp-Nachricht unter 0034 – 639 54 16 02 senden oder uns an info@cdsolicitors.com schreiben. Wir prüfen Ihren Fall, senden Ihnen unverbindlich Informationen zum Ablauf und einen Kostenvoranschlag hierfür zu.

Autor: Gustavo Calero Monereo, CEO & Anwalt bei C&D Solicitors, Torrox/Malaga (Andalusien)

TAX CONSEQUENCES OF BREXIT FOR BRITISH PEOPLE IN SPAIN

TAX CONSEQUENCES OF BREXIT FOR BRITISH PROPERTY OWNERS IN SPAIN

Geschrieben von admin am 11 Dezember, 2020. Veröffentlicht in andalusia, conveyancing, costa del sol, lawyer, swedish speaking solicitor.

We are near the end of the transition period established within the BREXIT for British citizens resident in Spain, which ends on 31 December 2020. There are many tax consequences for British citizens in Spain but for now we are only going to focus on British citizens with assets in Spain. For example pensioners or owners of a second home. From the perspective of trade or the movement of British citizens in Spain for work reasons, the tax and bureaucratic consequences of Brexit are higher, even though we will not cover that in this article. However, we will also briefly address the process to obtain Spanish residency. This because during the past few months we have witnessed many police stations becoming overwhelmed and unable to meet the many requests for appointments for British citizens and their family members to obtain a residence permit in Spain. This procedure was approved as part of the transition period set to end on the 31st of December 2020.

Over the last few weeks of 2020, it has been impossible for many British citizens to make an appointment at the police station in the province where they live and this also applies to the province of Malaga in Andalusia. This has led many British citizens resident in Spain or about to move to Spain starting 2021 without a residence permit.

What will be the situation of British citizens resident in Spain after BREXIT?

Well, these British citizens will have to apply for a residence permit after the final Brexit on the 1st of January 2021, just like any other citizen from a third country outside the European Union. We recommend that first of all these citizens register with their city hall as soon as possible and also request a S1 form from the United Kingdom to prove that their healthcare costs in Spain will be covered by the United Kingdom. After this, the easiest thing to do is to contact a law firm or administration company that can advise you and help you with the process, as it will be complicated to do it on your own. It is very important not to delay and do this as soon as possible, even though it is true that there is currently a lot of uncertainty about the procedure in question, as the negotiations with the European Union remain open.

How will the status of British citizens change after 1 January?

British citizens will be able to travel to Spain and stay for up to 90 days within a 6-month period, consecutive or not, without having to obtain a visa. They could even be required to prove their financial capacity to cover their stay in Spain, as is the case with travellers from countries outside the European Union. If they wish to stay longer, it is very likely that they will have to apply for a visa or work permit, even though this has not been defined yet since the negotiations remain open.

What will happen with the British driving licence?

From 1 January 2021, the general regulations will apply and British driving licence will be valid to drive in Spain for six months counted from the owner’s entry in Spain or from the date that legal residence is obtained. They will need to exchange their British driving licence for a Spanish one to continue driving in Spain after those six months.

How will Inheritance Tax change after Brexit on the 1st of January 2021?

As we explained in detail in an earlier article about inheritance tax, fortunately, from 1 January 2019, citizens not resident in the European Union are able to obtain the same tax benefits and bonuses for Inheritance Tax as European citizens. Therefore, the application of Inheritance Tax and its consequences would not change for British citizens.

Potential future Inheritance Tax when buying a home in Spain

When considering the purchase of a home in Spain, as the regulations applicable to this tax depend on the autonomous community where the property is located, a very important matter is to consider which autonomous communities have a higher and a lower inheritance tax, before making such investment(s). For instance, British nationals are the main buyers of homes in Spain. Alicante (Valencian Community) and Malaga (Andalusia) are the two main locations for foreigners to buy a home in Spain but. However, when it comes to Inheritance Tax, there are big differences between one community and the other. The Valencian Community has the third highest Inheritance Tax in Spain, while Andalusia has the third lowest, according to the General Economists Council of Spain, in their taxation study for 2020. This means that, when thinking about that tax, Malaga has a much cheaper rate of Inheritance Tax than Alicante.

What happens to taxes on profits obtained from renting out my home in Spain?

If you bought a home in Malaga as an investment, for instance, and you use it for holiday rentals as a citizen of the European Union, the profit obtained from such rental would be taxed at 19% through their IRNR income tax for non-fiscal residents with a house in Spain. Many expenses can be deducted: mortgage interest, repair and maintenance costs for the property, electricity, insurance, etc. However, once you are considered a citizen not resident in the European Union, it will be taxed at 24% and no deduction for property expenses may be applied.

Estate Tax or Wealth Tax on my properties located in Spain

Estate Tax or Wealth tax also apply to assets and rights that non-residents have in Spain. As this tax has a minimum personal exemption threshold of 700,000 euros over the minimal fiscal value, all non-residents -in the EU or outside it- with assets of a lower value would pay nothing. The main difference in terms of EU and non-EU citizens lies in the fact that EU citizens can apply the regulations of the autonomous community where most of their assets are located. However, non-EU citizens would have to follow national regulations instead of those of the autonomous community where the assets are located. If we compare the tax rates in Andalusia to the national ones in terms of estate tax, the national rate of estate tax is somewhat lower. Therefore, applying national regulations does not always entail a greater tax liability.

The actual impact of that tax is non-existent for most non-residents due to the minimum fiscal value of 700,000 euros applied per person. This is why it is recommended that, if you are thinking about luxurious purchasing a property in for example Marbella on the Costa del Sol, it might be interesting to put the property in more than one name to profit from this exemption. Still, estate tax could have a high impact for those with high-value assets in Spain or considering the purchase of luxury properties.

How will Brexit affect the sale of my home in Spain?

The tax rate on capital gains obtained from selling the property would go from 19% to 24%. The withholding (down payment) of the Capital Gain Tax that a buyer must apply to a non-resident seller to pay the amount at the Tax Agency in Spain will continue to be 3% of the purchase price. This percentage is the same for EU citizens and non-EU citizens.

Will Brexit affect the ITP transfer tax on the purchase of a home in Spain?

No, it will not. The property ITP transfer tax paid in Spain for the purchase of second-hand homes do not vary for EU citizens and non-EU citizens, for which reason, from 1 January 2021, it would not lead to greater expenses for British people. The same counts for the 21% VAT tax and documented legal acts (AJD tax) paid for new off-plan properties. The ITP tax depends on the autonomic region. For instance, in Andalucia a house buyer pays 8% ITP transfer tax over the purchase price up to € 400.000, until € 700.000 it´s 9% and after this the ITP will be 10%. To calculate the ITP tax on more expensive houses for a married couple it´s important to take into account if the couple is married in community or separation of goods.

Is the double-taxation agreement in force between Spain and the United Kingdom important?

Yes it is. The main purpose of this double-taxation agreement is for a British national living in Spain or a Spanish national living in the United Kingdom to be able to work and invest in those countries without having to pay twice for the same thing. This agreement will remain in force and is unaffected by the United Kingdom leaving the European Union. This agreement, which came into force on 12 June 2014, contains special clauses that exempt certain public pensions paid by the British government from taxation in Spain, as they can only be taxed in the United Kingdom. Likewise, this agreement protects residents national of either country from being taxed twice on income from capital gains and dividends. Income tax for non-residents, company tax, personal income tax and estate tax are covered by this agreement, for which reason these aspects should not be taxed twice in both countries.

Potential changes in the future for British house owners

Over the next few weeks, there will surely be changes affecting British nationals as it is very likely for the negotiations to change certain important aspects. However, on the date this article is posted (22 December 2020), little is known. We advise that, if you have any doubts, you contact and obtain legal or tax advice from a lawyer or company specialising in non-resident house owners.

Author: Gustavo Calero Monereo, lawyer at C&D Solicitors, Málaga

PURCHASE OF A HOME IN SPAIN AND HOME INSURANCE: WHAT YOU NEED TO KNOW

Geschrieben von Gustavo Calero Monereo am 30 Oktober, 2020. Veröffentlicht in AFO, andalusia, Andalusian, conveyancing, DAFO, english speaking solicitor, illegal building, malaga, nerja, Property law, purchase process, SAFO, solicitors Nerja, Unkategorisiert.

Home Insurance, purchase, property, Spain — Home insurance of your Spanish property

Buying a home in Spain entails a great financial investment and, therefore, you’ll want to do it with the lowest possible risk. This is why it’s very important to obtain legal advice and hire a specialised lawyer to help you throughout the purchase process, so that you can enjoy legal certainty and be aware of all the relevant information about the property.

However, there is another important thing to do before signing the Purchase Deed for the property. It is advisable to have home insurance ready to prevent any risk of financial loss due to potential damages, such as theft, water damage or fire. The importance of home insurance for the owner’s peace of mind and the investment made is self-evident.

This is why we’re posting this article, to clarify some concepts for foreign homeowners in Spain, so that they can understand this very important product well. In the event that you are buying with a mortgage, the bank will advise you and recommend that you obtain home insurance as, in the event of serious damage to the mortgaged property, the bank will want to secure repayment of the money borrowed.

At the end of the article, we cover home insurance for rural homes built in Andalusia, with or without DAFO/SAFO.

What are the building and the contents in home insurance?

A home insurance policy for an existing or new build property is based on two main concepts: the building and the contents.

1) The building (continente) is made up of the construction and structural elements of a home or building, whether these are walls, ceilings, floors or installations such as heating, water or electricity, among others.

2) The contents (contenido) are made up of the belongings of the people living in the home, such as furniture, electronic devices, personal effects, clothing, jewellery, art, etc.

What would be an appropriate value for the contents?

To properly assess the contents, we recommend that you think about how much it would cost you to buy the items you have in your home, going room by room until you cover everything in it. Jewellery or cash money have specific valuation in home insurance and may be insured up to a certain limit or under certain conditions. In other words, in this case, this information must be provided to the company so that it takes it into account in the policy.

And what is the right value for the building?

If the building becomes damaged, e.g. a fire, the company will provide compensation according to the cost of rebuilding the home, i.e. the potential cost of rebuilding the home must be calculated. The resulting value of this calculation is the one that should be included in home insurance as the value of the building.

A very common way to calculate said value is the use of average estimated building values published by the Colleges of Architects. For instance:

Mr Olle Johansson, a Swedish national, purchased a new home in the city of Malaga in 2020. It’s a flat measuring 120 sq. m.Well, taking into account the average estimated building values from the College of Architects of Malaga for 2020, the value per square metre built would be 809 euros. In other words, the value of the building for 120 square metres would be 97,080 euros. If there is an underground carpark and a store, these should also be appraised separately from the home, so that the policy covers them. Another example: Mr Jan Van Poppel, a Dutch national, will purchase a home in the countryside, in the Mijas area (rural land), which has: 200 built square metres plus 30 square metres for a pool. The value per square metre for an isolated home in the countryside is 984 euros and the value of the pool would be 445 euros per square metre. Therefore, the value of the building would be about 210,150 euros.

Valuing the building at the purchase price

When we buy a home and obtain home insurance, we often think about setting a value for home insurance as close as possible to the purchase price paid for the property. However, this reasoning is misleading as it should be taken into account that the land where the home is located is not covered by home insurance, as the land always remains intact. In the event of serious damage, if you already own the land, you only need to insure the cost of rebuilding the home. However, the value of this land is what makes up most of the purchase price of a home in most urban sales. For instance, buying a home in the golden mile in Marbella, in central Malaga or on the beachfront in Nerja entails a high cost due to the location (land) of the property, rather than for the value of the building itself.

Rebuilding is much cheaper than buying when you already own the land. Therefore, the most important thing is to insure the real reconstruction value in the event of serious damage. This is about assigning the actual value to the building of your property. You also need to take into account that, when you own a home in a block of flats, if there is serious damage affecting the building, the community insurance will cover part of the damages affecting only the common elements of the building. The façade, roof, terraces, etc., are elements that would be covered by the insurance of the Homeowner’s Association in the event of a fire. In other words, if you are buying a flat or apartment, you’ll need to insure the building. This is why, in these cases, you should calculate the reconstruction value of your building for insurance purposes. If you provide a value above the reconstruction value, this would lead to so-called over-insurance in your home insurance and, if you provide a lower value, it would lead to under-insurance.

What would happen in the case of over-insurance in the policy?

Imagine a home in a building measuring 100 square meters, with a building value of 300,000 euros because this was the price paid when it was bought. If there is a serious accident requiring the reconstruction of the home, the company will never pay more than the reconstruction value, which would in general be around 80,000 – 90,000 euros. In this case, the owner would be paying a very high premium every year for the insurance policy needlessly, as the company will only honour claims up to the reconstruction cost of the home. In extreme cases, the company could even interpret that there has been bad faith when obtaining the insurance policy and this could be a major issue, as it could declare the policy void and refuse to pay the amounts that should be paid in the event of damages.

What happens in case of under-insurance?

In the event that the building or content is valued below the actual value of the building or furniture, the company will not cover 100% of the damages, even if the amount of the claim is lower than the value of the insurance policy. For instance, if the actual value of reconstruction of the building is 100,000 euros and the policy contains a building value of 60,000 euros, the home would only be insured at 60%. Someone might think in this case that any damages equal to or lower than 60,000 euros would be covered by the policy but in reality that’s not the case. For instance, in the event of a small fire with damages valued at 10,000 euros, the company would interpret that 40% of the claim is not covered by the policy as only 60% of the building value of the home is insured. Therefore, it will only pay 6,000 euros as compensation, always applying the rule of proportionality to every claim.

Special insurance: luxury homes

If you own a luxury home or you are thinking about buying a luxury home, the estimated cost of reconstruction or replacement based on the coefficients of the colleges of architects would surely not be a valid calculation method for homes of this type. The key to insure the building in homes of this type is to calculate the reconstruction value of the property with objective parameters. I.e. if the home has very high quality finishes in terms of automation, insulation, aluminium or timber structures, flooring, taps, toilets, air conditioning, etc., this must be taken into account and, in this case, these values should be added to the building insurance. As mentioned, the value of the building must be as accurate an estimate as possible of what it would cost to rebuild the home to the same standards. In this case, it’s very important to inform the company of the “peculiarities” of this home so that it has as much information as possible and to accredit the reason behind the value of building insurance being above the average reconstruction values in the area. Keeping all purchase invoices and proof of purchase for high-value furniture is very important to prove the estimated cost.

What is the insurance compensation consortium?

All persons who have an insurance policy in Spain, whatever the type, pay a small part of the price to the consortium. The consortium is a public business entity that covers accidents such as flooding, terrorism, atypical cyclones, large fires or other risks set down in the “extraordinary risk insurance regulations”, which are not covered by insurance policies, with damages of this type being expressly excluded from insurance covers. When damages of this type occur, as the insurance company does not cover them, the consortium acts as guarantor to compensate policyholders and keep them protected in these situations.

Rural homes and the building value in home insurance

First of all, we should remember the legal premise that most existing rural homes (rustic / countryside) in Andalusia, which are used for residential purposes, are illegal and, therefore, in the event of the destruction and total loss of the home, such as due to fire, earthquakes, serious flooding, etc., they cannot be rebuilt. This is because the Urban Planning Law of Andalusia (LOUA) does not allow for issuing a building permit on rural land for a residential home. The existence and continuity of those thousands of illegal homes on rural land are based on their age. Therefore, in the case of destruction or total loss, there would no longer be an old home and it would not be possible to obtain a permit to build a new house or rebuild the one that was there.

The above explanation means that the value of the building in home insurance for these homes can be estimated, as mentioned above, at around 984 euros per square metre built in Malaga. As the value is based on what it would cost to rebuild the home and the rural home cannot be legally rebuilt in the event of total loss, what situation would we be in? In the event of total loss, if we have a country home with a surface area of 150 square metres and the building is valued at 150,000 euros, the company would pay that amount as compensation for the building, along with the amount corresponding to its contents. In this case, the owner would receive compensation for the home in addition to the value of land where nothing can be built. This is why the value of the land in a rural home is very low compared to the construction value, especially when compared to an urban home on land where it is legal to rebuild it.

Tips for a safe and well insured home

When obtaining home insurance and purchasing your property, think carefully about the value of the building and contents and don’t forget to include stores, parking spaces, pools, etc. If you have any doubts about the insurance value, talk to the insurance company itself. It’s important for the company to help you clear up any doubts when assessing your insurance value.

Author: Gustavo Calero Monereo, lawyer of C&D Solicitors (Torrox, Málaga Andalusia)

less taxes when you buy a property in Spain

Less AJD tax in co-ownership termination property and potential claims for Spanish Tax Office

Geschrieben von admin am 1 Februar, 2019. Veröffentlicht in conveyancing, lawyer, malaga, purchase process, Unkategorisiert.

It’s usual when couples break up and they own a property at 50% -or in properties belonging to several heirs- that for various reasons one of the joint owners would want to sell his or her share and the other one would want keep the entire property. Said sale or purchase can be made effective through executing a Deed of co-ownership termination (Extincion de Condominio). Over these deeds 1.5% AJD Tax (Actos Juridicos Documentados / Stamp Duty) is paid instead of the normal 8% ITP / Transfer Tax. There now is an important change that even lowers this AJD tax and makes it possible to claim back money from the Spanish Tax Office.

What is the Extincion of Condominio and what are its benefits?

It’s usual when couples break up and they own a property at 50% -or in properties belonging to several heirs- that for various reasons one of the joint owners would want to sell his or her share and the other one would want keep the entire property. Said sale or purchase can be made effective through executing a Deed of co-ownership termination (Extincion de Condominio). Co-ownership termination consists in transferring something that belongs to several owners, who agree to award it/sell it to one of them, with the other joint owner/buyer paying a price for acquiring the share that belonged to the others.Termination entails the end of joint ownership and this asset becomes the property of a single individual but it’s only applicable to properties belonging to several owners, if they decide to sell everything to one of them. It wouldn’t apply if the sale of this share goes to more than one owner, e.g. if there are three joint owners and two of them keep the other one’s share.

Termination of co-ownership offers one main advantage over a sale: the tax paid by the buyer to acquire this share of the property is significantly lower. While in Andalusia the tax on asset transfers for the purchase of a home is 8%, the tax paid for termination of co-ownership is 1.5%, as Stamp Duty (AJD Actos Juridicos Documentados). In other words, to benefit from the tax rate for co-ownership termination, there can only be one owner of the property in the end as, otherwise, this would be considered a normal sale and be taxed at 8% ITP Transfer Tax.

Examples

% ITP tax

3 Couples have a joint property. 1 Couple sells their 33,33% on a 50-50 base to the other 2 couples. Both remaining couples pay 8% over their bought share because the property stays in co-ownership.
2 Couples have a property and 1 couple sells to the other couple that is married in separation of goods. They pay 8% ITP tax because the tax office sees this married couple as 2 parties.
3 Brothers inherit a property and 1 sells his part to 1 brother that then owns 66,66%. The buyer pays 8% ITP because there still is a co-ownership of the property.

1.5% AJD tax

A married couple gets divorced or 2 non-registered partners end their relationship. One sells to the other, so there is no co-ownership anymore and the remaining owner pays 1.5% AJD over the bought 50% of the property.
2 Couples have a property and 1 couple sells to the other couple that is married in joint assets. They pay 1,5% AJD tax because the tax office sees them as 1 party.
3 Brothers inherit a property and 2 sell their part to 1 brother that then owns 100%. The buyer pays 1.5% AJD over the bought share of 66,66% because there still is no co-ownership anymore.

The owner/buyer now pays less tax

Since 9 October 2018, thanks to a Judgment of the Spanish Supreme Court, the tax cost assessed for termination of co-ownership has been significantly reduced. Up to that date –incomprehensibly– the tax of 1.5% was paid on the entire value of the property, even if, for instance, the share transferred was just 50% of the property. However, with this judgment, a new approach is established, in which tax will only be paid according to the value of the share effectively being transferred, i.e. only on the price to be paid to the seller, thereby avoiding the extra cost that this type of transfer entailed when tax was paid for 100% of the property value, even if the share acquired was just 30%.

Possibility to claim previous payments AJD tax

Likewise, this change in taxation through the aforementioned judgment can have positive consequences on Deeds of Co-Ownership Termination executed within the last four years. Owners who were already joint owners of a property and acquired the rest by paying the price and paying 1.5% tax on the total property value can file a refund claim for undue payments before the corresponding Tax Office. The tax office of the Andalusia Council is the oficina liquidadora. They can claim a refund of the 1.5% paid for the share of the property they did not acquire, as they already owned that share. If they purchased 30% of the property two years ago and had to pay 1.5% of the total property value, they can claim a refund of the 1.5% paid for the 70% of the property they already owned when they purchased the remaining 30%.

Important: You can only claim back any tax paid within the four years prior to the date of filing the claim for undue payments, as this is the maximum time period to file a claim in accordance with Spanish tax law. I.e. the submission date of the claim cannot be later than four years after the due date of this tax, which is 30 days after the execution of the Deed of Co-Ownership Termination.

https://youtu.be/j4DTCcS4IJ4 Author: Gustavo Calero Monereo, lawyer at C&D Solicitors Torrox (Málaga, Andalusia)

Expenses from the renovation and improvement of a property can reduce the tax

RENOVATING YOUR HOME? DO IT RIGHT AND PAY LESS TAX WHEN YOU SELL

Geschrieben von admin am 9 Juli, 2018. Veröffentlicht in Andalusian, Andalusian, conveyancing, costa del sol, costa del sol, english speaking solicitor, english speaking solicitor, lawyer, lawyer.

Renovating house in Andalusia: tips & save on Capital Gain Tax

One of the first things many people do when buying a property is renovate it.

The expenses from the renovation and improvement of a property can reduce the tax on capital gains in the event that it is evidenced in the future sale of the existing or new build property. It is important to clarify that repair or preservation costs for the property are not deductible. Deductions only apply to renovations or improvements that increase the value of the property compared to before they were made.

The cost of improvements would be added to the price paid in the sale, resulting in lower capital gains tax due to the difference between the price to transfer the property and the purchase price, which means less tax would be paid to the Tax Agency. This will be so provided that such renovation and improvement works can be evidenced so that the Tax Agency can accept them. Below, you will find what I consider to be the most important aspects to be able to prove the works carried out for tax purposes.

TECHNICAL PROJECT

Having an architect draft a project and oversee the execution of the works is not a minor issue. If the works to be carried out are of a certain scale, it is always best to have a professional perform follow-up and control since he or she would be liable if something goes wrong. Likewise, having carried out the works with a technical project and a final works certificate can be used to evidence the improvements made in be property before the Tax Agency.

BUILDING PERMIT

If you are going to renovate a property, it is always necessary to get a building permit for both major and minor works. It is true that this is often not requested to save money, for instance when renovating the inside of a home or a room, as there are less chance you will be found out.

Having a building permit will help you on three important aspects:

To evidence the lawfulness of the works –provided that it complies with the permit granted–. Likewise, it is important for you to know that, if there is an accident at the building site, not having a permit may entail consequences of criminal liability for the owner.
When it comes to works where the distribution of the property will change, the constructed area will be enlarged or a new home will be built, the building permit –among other documents, such as the final works certificate and the permit for initial occupation– will be necessary to register this new construction in the Property Register.
When selling a home with profit, the building permit will serve to prove to the Tax Agency that improvements were made so as to request that these are taken into account as part of the purchase price of the home.

Having a building permit is more important in terms of urban-planning and criminal law than in terms of taxes.

CONSTRUCTION CONTRACT

It is very important to sign a contract for the works to be carried out with the builder. The construction contract will mainly evidence which is the construction company that performs the works, the type of works to be carried out, their estimated cost and the location where they will take place.

INVOICES AND PROOF OF PAYMENT

Without a doubt, in terms of taxation, this is the most important requirement for the Treasury to recognise this improvement or renovation.

We often find homeowners who have spent a lot of money on improving their properties but who have no invoices issued by the builder or proof of payment for these works. It is essential to prove to the Tax Agency that these amounts have been paid by bank transfer or personal cheques made out to the construction company. If you have no way to prove these payments, it will be impossible for you to include these improvements in the purchase price of the property. You must always request an invoice and keep proof of payment.

The costs of the improvements will be added to the purchase price because of which you will pay less Capital Gain tax. The Capital Gain tax of this moment is 19% over the profit between the purchase and sales price minus the deductions.

WORKS WITHOUT A PERMIT THAT CANNOT BE LEGALIZED

It is possible that, for the works you intend to carry out in your home, it is not possible to obtain a building permit, for instance in works to enlarge a home in non-urban land –rural land–, increasing the surface area beyond the development potential –such as when enclosing a balcony– or building to a height higher than that allowed. The first thing you should take into account is that, as the owner, you will assume the legal liability that may arise if legal proceedings are brought in connection with these works without a permit.

If you will be carrying out such works, it is important for you to sign a construction contract with the builder, for you to obtain an invoice for each payment and for payments to be made by bank transfer or cheque. Even if you do not have a permit, it would be possible for these improvements to be taken into account when selling the property.

The Tax Agency cannot reject improvement works for not having a building permit –inspecting urban planning law is outside their jurisdiction–, for which reason it is important for you to be able to evidence the works that were effectively carried out, what their cost was and submit payment documents.

In these cases, it would not be a bad idea to have a technician draw up some type of report –not a project– explaining how the property was before and the works that have been performed, providing photographs and documentation from the owner. This is an additional document that can be used to prove improvement works.

NEW CONSTRUCTION DEED

The New Construction Deed is a document signed before a Notary Public to register a building in the Property Register in Spain. Even when the construction does not have a building permit, it is possible for it to access the Property Register in Spain –which does not mean it is legal– provided that a series of requirements are met.

If you have built a pool, garage, storeroom, etc. in Andalusia without a licence, it is possible for you to get an architect to issue a certificate of age six years after completion, to evidence the new construction and its age. This certificate can be used to sign a Deed of Declaration of New Construction before a Notary Public and register the construction in the Property Register. In some cases, it would not be possible to register it in the Register, such as when the land is especially protected.

VALUE OF THE CONSTRUCTION DECLARED IN THE DEED

The value of New Construction assigned in the Deed cannot in itself be used to prove to the Treasury how much was spent on the property at the moment of selling.

For instance, if you declare, in the Deed, that you have spent 50,000 euros on the pool and garage you built, unless you have proof of payment and invoices from the construction company, the Treasury will reject this expense. This is so because what you do before the notary is nothing more than a statement, which means that the Notary does not check if you really spent that amount or if it was more or less –and isn’t required to do so–.

In my opinion, if you are going to do a Declaration of New Construction for works without a licence, you should include a copy of the invoices and/or proof of payment to the constructor in the Deed, as this would evidence the value you declared and make it easier for the Treasury to accept it when selling the property.

Lastly, if you are thinking about doing any work on your property, I wish you all the luck in the world and, most of all, lots of patience; I almost ran out of it myself when I renovated mine…

Author: Gustavo Calero Monereo, lawyer at C&D Solicitors Torrox (Málaga, Andalusia)