New Obligations for Tourist Accommodation Owners

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Last year, tourist accommodation owners in Spain were required to obtain a Unique Rental Registration Number (NRUA) if they wanted to advertise their properties online. Now, to maintain this registration, they must comply with a series of reporting requirements.

Owners of properties intended for short-term rentals must submit an information return detailing the activity carried out during the previous year in these properties, specifying each category and type of rental that took place there. This declaration consists of an anonymized list of rentals made by hosts or landlords who provide short-term accommodation rental services through online platforms.

This information declaration for short-term rentals must be submitted during the month of February each year, with information on the rentals established in the previous year. One separate information return must be submitted for each property, ship, vessel, or naval craft intended for short-term rental. For each NRUA (Unique Rental Registration Number), it will be indicated whether the purpose of the rental was on vacation or tourism, work, studies, medical reasons requiring relocation, or any other reason. If there are well-founded doubts about the declared purpose, the property registrar may request additional supporting documentation.

Failure to fulfil these requirements will result in the withdrawal of the rental registration number.

Carlos Prieto Cid

Lawyer

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Who will inherit your property after you death?

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You may think you know the answer to this question. But the law, when applied, can lead to some surprising and unexpected outcomes. Because regardless of whether you make a will, your inheritance will be subject to the law.

I’m sure you know that the law fills the gap when someone doesn’t make a will. But even if you make a will, the law is applied to determine its validity, scope and any limitations.

What happens if the heir you appoint dies before you do? What happens if they die after you but before they formally accept the will, in other words, they die without having been declared your heir? What happens if you appoint a non-family member or a legal person (e.g., a foundation or association) as your heir and leave nothing to your children? What happens if somebody has an interest in invalidating your will?

All these questions are subject to the law. But here is where the doubts just begin. What law? The law where you live, your country of origin or where your property is located?

For instance, the inheritance of a Swiss national resident in Spain is governed by Swiss law. However, Swiss law can end up making Spanish law applicable. Whereas the inheritance of a German national resident in Spain is governed by Spanish law except where otherwise stated in the will.

And then there’s the fact that the applicable Spanish law differs depending on whether you live in Benidorm or Salou. The applicable tax will also differ. Even the formalities that your heirs must observe to take possession of your property won’t be the same.

So care must be taken when setting out your inheritance in a will. You must think about the formalities that the beneficiary you designate will have to go through, the costs that they will have to bear, and any difficulties they might face with other possible beneficiaries, the authorities, your creditors, etc.

So if you have property in your name, we urge you to seek professional advice and make a will as soon as possible. Your heirs will be glad you did.

Carlos Prieto Cid – Lawyer

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Property acquisition tax increases in Catalonia

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On March 25 of this year, the Catalan government adopted a series of new tax regulations, that affect those intending to acquire real estate in this territory.

The background of these measures is the serious political and social problem of housing prices. Purchase or rental prices for flats or houses are once again skyrocketing, as they have been at previous times in our recent history.

In a country where almost 14% of the Gross Domestic Product is driven by tourism, the local population is being displaced in historic city centres, replacing family homes with tourist flats or hotels. Furthermore, investment in real estate in the centres of global cities like Barcelona is attractive to international investment funds, which resell the properties to foreign investors who will not reside there but rather keep them as an asset in the form of a holiday home.

These trends in the dwelling market generate great social tension because most of the Catalan society find it almost impossible to access housing: impossible to buy and increasingly difficult to afford to pay the rent in the centre of major towns or tourist areas.

For this reason, the Catalan socialist government has decided to increase tax revenue from the purchase of luxury homes (priced over €600,000), also applying increased rates of 20% for buyers who already own more than 10 residential properties (or more than 1,500 square meters). This increased rate can also be applied to owners of only five residential buildings if the area in which they are located is considered particularly affected by the rise of prices.

However, there are many exceptions to the rule that are worth knowing, so once again we recommend that investors interested in purchasing homes in Catalonia seek advice from a tax expert.

Carlos Prieto Cid

Lawyer

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New increase in the tourist tax rate for stays in tourist establishments in Catalonia starting in the summer of 2025

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If we rent our vacation home in Catalonia to tourists, our guests must pay the tourist tax (IEET), per person and per stay unit, with a maximum of seven consecutive nights in the same accommodation. Rates vary depending on the type of accommodation, its category, and whether it is in the city of Barcelona or anywhere else in Catalonia.

This tax will increase again in 2025, as the Catalan regional government has decided to double the tax rates. In addition to this significant increase in the regional tax, all Catalan municipalities also have the option of adding a municipal surcharge to the Catalan regional tax, something that until now had only been applied in the city of Barcelona. Therefore, the amount per night may vary, even outside of Barcelona, ​​from one municipality to another, as it will be up to the city councils to decide whether or not to apply these surcharges. However, in any case, municipal surcharges cannot exceed a maximum of €4 per night. Therefore, the maximum amount that can be charged outside of Barcelona for the occupancy of a tourist accommodation will be €6.

Filing the periodic return for this regional tax on stays in dwellings for tourist use, as well as any applicable municipal surcharges, must be done electronically. This tax may also be part of the tax base for calculating VAT, depending on the circumstances. Furthermore, tourist rentals always accrue income tax, regardless of the owner of the rented property being resident in Spain or abroad. Therefore, it is better to seek advice from tax experts when renting your vacation home.

Carlos Prieto Cid – Lawyer

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Further increase in the final costs of the transfer of ownership in Spain

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The costs associated with the transfer of ownership may affect the decision finally taken by the buyer and the seller, as the net price that the seller receives after deducting expenses and taxes may be much less than imagined, and the final price to be paid by the buyer, adding costs and taxes, may be much higher than previously thought.

The parties in a contract for the transfer of property (usually a contract of sale) have freedom to decide about these aspects. What we analyse now is what law prescribes, unless the parties agree among themselves on their own.

The council tax for the increase of the value of the property sold is one of the costs to be borne by the sellers. This tax is a percentage of the difference between the value of the land at the time of its acquisition by the seller and the estimated value of the property at the time of sale to the buyer.

The seller must also pay the income tax on the increase in value as well. But if the seller is non-resident, the buyer must submit a deposit (3% of the buy price) as a down payment directly to the tax office. This amount is usually subtracted from the purchase price.

The tax on the transfer of property is the buyer’s responsibility. The tax in Catalonia is a 10 % of the selling price.

The invoice for the authorising notary is paid by the buyer, unless the parties agree otherwise. The role of the notary in Spain (unlike other countries) is only the formalization of the final contract as a public document. This contract has been issued in advance by the parties with the assistance of a lawyer. Notarization of the contract of sale is necessary as a purchase contract that is not contained in a public document, can not be registered in the registry of property. And such registration of the document the ownership is changed with is not only a guarantee for the buyer, but also a prerequisite when the buyer has to finance the purchase with a mortgage.

The costs of preparing the documents to be submitted along with the case, is to be paid by the seller (these documents are normally processed or checked by lawyers). The cost of a lawyer could be also common to both parties, if the lawyer provides the following services:
To provide consulting and legal assistance during the whole process of transfer of ownership.
To translate the will of the parties to the legal and technical language.
To make a final agreement of sale and prepare it to be notarized by a notary.
To foresee the tax consequences of the transaction for both parties, and to prepare and submit formally and in time the tax returns in the most convenient manner.
But it is always better for the parties to agree in advance (even in an oral form) the main terms and conditions of the contract, so that the lawyer is able to represent the interests of both parties without any kind of conflict, simply because he develops the sales agreement already adopted by the parties.

Carlos Prieto Cid – Lawyer

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Inheriting in Spain

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The death of a loved one is always traumatic. Even more so if, as well as having to deal with the loss, you are the heir and have to go through a lot of complicated administrative procedures. Such red tape, a challenge everywhere, becomes an even bigger one when you live in a different country to where the estate of the deceased is located, or when their countries of residence and nationality are different.

In Europe, to initiate the transfer of ownership of the deceased’s property to your name, the first thing you need is a death certificate officially certifying the death. You get this certificate from the civil registry. For this certificate to be recognised in another country (e.g., for when a foreign national dies outside of Spain while owning property in Spain), it needs to be valid internationally, which can be attained with an official Apostille stamp.

In Spain, as well as certifying the death, you also have to certify the existence or absence of any wills executed in Spain. To do this, when you have the death certificate, you need to request a certificate from the Ministry of Justice’s General Register of Wills. If a will was executed in Spain before a Spanish notary public, the General Register will inform you before which notary public and on what date the deceased signed the will in Spain. As it is easy to be unaware of the existence of a will, the General Register of Wills is a great help and a way of protecting our rights. It also serves to certify when no wills have been executed in Spain.

Carlos Prieto Cid – Lawyer

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New comprehensive Advisory Service for Property Owners

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Owning a real estate property is a big responsibility. To protect your rights as an owner, your property must meet all current legal and technical requirements. To give you the peace of mind that your real estate property does meet these requirements and is fully protected legally — both now and in the event of any change in the law — Tarraco Iuris law firm would like to offer you its comprehensive advisory service for property owners.

Based in Tarragona, our specialist team of lawyers and technical experts are ready to handle all your properly-related legal and administrative needs, including the handling of any mediation process and other procedures and the drafting and lodging of documents for the Spanish authorities (local councils, provincial and regional governments, the cadastral register, the Land Registry, notaries public, the courts, etc.) or any third parties (adjoining property owners, neighbour associations, the community of owners, entities involved in expropriation processes, etc.).
To legally protect your property in Spain, we offer a complete range of technical and legal services that includes:

1. Helping you obtain a NIE (foreigner ID number required for tax purposes in Spain).
2. Drafting all property-related contracts, including preliminary, option-to-buy, purchase and sale, and lease agreements.
3. Verifying property charges with the Land Registry.
4. Verifying property zoning with the local council.
5. Verifying any debts owed by the seller to the Community of Owners.
6. Verifying that all tax due on a property has been paid (municipal property tax, tax on income from real estate property, etc.) and drafting and presenting any corresponding tax declarations.
7. Providing an estimate of taxes and expenses so you can budget for the cost of transferring a real estate property.
8. Verifying the applicable marital or inheritance law and advising you on the legal conditions for purchasing or transferring a property.
9. Drafting title deeds for executing property transactions.
10. Accompanying you to sign title deeds and any other notarial instruments, acting as advisers and/or translators.
11. Assisting your negotiations with the bank for using the property as loan security.
12. Registering title deeds with the Land Registry.
13. Informing the local council of a change of ownership for the purposes of local taxes and fees.
14. For sales by non-residents, preparing and presenting declarations on tax withheld for Spanish income tax and handling the collection of any refund.
15. Preparing/lodging applications for:
    a. Certificate of occupancy and energy efficiency certificate.
    b. Building technical assessment report.
    c. Certificate of structural soundness and certification of construction age.
16. Plans and topographical surveys.
17. Undertaking boundary demarcation and mediating in conflicts with neighbours.
18. Undertaking historical investigations on properties and updating the cadastral record for divided or joined plots.
19. Advising you on:
    a. Utility connection and the possible use of wells and springs.
    b. New construction, reform or landscaping projects.
    c. Business projects.
    d. Road and path refurbishment.
    e. Land and building assessment.

Are you sure that your property does not run any legal risk?

Do not hesitate to contact us for further information. Please contact us for any service you require that is not listed.

Carlos Prieto Cid – Your legal adviser in Spain

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The impact of real estate transfers on personal income tax

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It’s commonly known that real estate sales are subject to tax. Less widely known is that any property transfer can affect your income tax. To avoid unpleasant surprises months or even years after signing an agreement for conveyance, be sure to get legal advice on the consequences of the transaction.

Any change of ownership of real estate affects your personal income tax. This is clear for selling a house. The difference between what you paid for it and what you get when you sell is normally a gain that, logically, amounts to taxable income. Less obvious is that income tax is due even when there is no capital gain because the change of ownership does not occur via a sale. For example, when the property is transferred as a gift or in the dissolution of a joint ownership arrangement. Yes, that is correct! Even though if there is no capital gain in a transfer of ownership, you still have to pay income tax on it.

It is also not easy to understand why income tax is payable when you sell a house for less than market value or the difference between the purchase and sale price is exclusively owing to inflation. There are even many contradictory court decisions on these questions. Possibly, in the near future, tax rules like these that don’t make much common sense will be found to run against the Spanish Constitution or EU law. As occurred with municipal capital gains taxes. In the meantime, though, we must keep in mind that any change of ownership on our property may be subject to income tax, sometimes for a hefty sum. So we must enter any real estate transaction with our eyes wide open.

Carlos Prieto Cid – Your legal adviser in Spain

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Take advantage of your roof to save on your electricity bill

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Until 31 December 2023, public subsidies are available for installing renewable thermal energy systems in the residential sector and for using renewable energies for own consumption and storage.

As part of the EU funds for repairing the damage caused by the COVID-19 crisis and with the aim of building a more sustainable future via reforms and investment, a range of subsidies are on offer for adopting renewable energy own-consumption and storage systems and renewable thermal energy systems in the home.

Eligible for these subsidies are individuals and companies not selling goods or services and homeowners associations. In other words, the typical clients of our firm — private homeowners, the self-employed, foundations and asset-holding company — are eligible.

These subsidies are available for own-consumption using renewable energy, solar or wind power in the residential sector, with or without storage capacity, and home air-conditioning and hot-water systems using solar thermal, biomass, geothermal, hydrothermal or aerothermal technologies. The subsidies range from €550-€13,500 per dwelling. Subsidy applications are processed strictly on a first come, first served basis and only until the funds are used up. For individuals and companies running businesses, the subsidies can take into account the income of the business activity or the capital gains, depending on the aim of the subsidy. For individuals, the subsidies will not be included in the taxable base for personal income tax calculation.

If you’re interested in installing this type of system with the help of a subsidy, we can assist you. Please get in touch.

Carlos Prieto Cid – Your legal adviser in Spain

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Is it a good time to buy real estate in Spain?

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After a continued drop in prices and sales from 2006, the Spanish real estate market has been on the up and up since 2016. The current international climate might even encourage us to invest in property in Spain.

The energy crisis, inflation and the instability caused by the Russia-Ukraine war are causing a contraction of the economy and an ongoing devaluation of the euro, and all indicators suggest that this trend will continue. But there is an upside to this gloomy news. Whenever currencies devalue, smart investors seek to put their savings in safe assets, and the safest place to invest has always been real estate.

Spanish people have inherited from their parents and grandparents the idea that you should always own you home, no matter your age or stage in life. This conservative mentality has traditionally had a huge impact on the real estate market, creating a higher demand than would be expected given the economic climate. Added to this are the hundreds of thousands of foreign nationals looking to retire or spend their summer holidays in Spain who jump at the chance to buy property here. Spain is also number two in Europe for people owning a second residence, at nearly 15%, this further straining the real estate market.

All this takes us back to where we started: buying property in Spain is a safe investment. The major crises of recent years should not let us forget that, for decades now, property has been the best and safest way to invest in Spain. And the current crisis has put prices back at a reasonable level after they hit rock bottom in 2016.

Carlos Prieto Cid – Your legal adviser in Spain

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