New comprehensive Advisory Service for Property Owners

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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A legal change improves the position of buyers of inherited real estate

On this blog, we have commented in the past on the risks of purchasing from a seller who acquired a property by inheritance from a non-immediate family member. Buyers were often not aware of this situation, which entailed legal risks that fortunately have been removed.

The most typical example of this type of inheritance is a single person or widow with no children who, via a will or by law, ends up leaving their estate to a non-immediate family member (under Spanish law: a sibling, nephew/niece, cousin, etc.) or even someone with no family ties. When these heirs accept the inheritance and become the owners of the property of the deceased they, logically, often want to sell it. To sell the property, they first have to register their ownership of it in the real estate register. Until now, this registration recorded with it a charge in the form of a restriction on the owner’s power to sell the property for two years. This restriction existed to protect the rights of any heir with a preferential right to inherit who appears later on (e.g., a child that had not previously been acknowledged).

The buyer, who was unaware of how the seller acquired the property, may have committed to purchasing it via an earnest money agreement, only to later find out that the banks will not finance the purchase owing to the restriction on the property. The legal provision providing for this restriction has recently been repealed with retroactive effect. This means that property buyers can rest a little easier from now on.

However, we still recommend seeking the assistance of a lawyer when purchasing a property to obtain the proper legal advice and avoid the other risks that buying real estate entails.

Carlos Prieto Cid – Your legal adviser in Spain

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Doing business abroad via a representative

When we have interests in a foreign country we aren’t residing in, we usually manage them by distance. To do this, we normally grant power of attorney to someone we trust. Given the important legal implications in giving someone power of attorney, the process is subject to strict formalities.

These formalities are even stricter if the document empowering our representative is to be used for managing business interests in a country different from where it is issued. At our law firm, we come across cases like these every day. For example, an Englishman wanting to purchase a property in Spain and have a Spanish legal professional represent him in the sale. Or a Russian on holiday in Spain who realises she needs to take care of something at a Swiss bank and wants to give someone in that country power of attorney for representing her at the Swiss bank. Or a German resident in Spain who needs to settle an inheritance in Germany and wants someone he trusts to handle it for him. In situations like these, the document granting the power of attorney to our representative, which will be issued in one country and used in another, must be legalised.

Documents granting powers of attorney that can be used internationally must be officially authorised to be valid. This means that an authenticating official (normally a notary public or a public servant) must certify the document. This authenticating official attests that the person signing the document is who they say they are and is of sound mind (or at least states they are). This certification converts the power of attorney into a notarial instrument. However, for this document to be recognised in other countries, the person who officially certifies it must be recognised by another authority in the same country that is in turn recognised by the authorities of the country in which the document is going to be used. For example, a power of attorney granted before a Spanish notary public to be used in Germany must be recognised as an authentic notarial instrument by the German authorities. In most European countries, this international recognition of the local official is done via an Apostille stamp. In the above example, the power of attorney granted by the Spanish notary must bear an Apostille stamp from the Spanish Association of Notaries Public, which is the body recognised by the German authorities for authorising the signature of a Spanish notary public.

Carlos Prieto Cid – Lawyer

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The recognition of notarial documents overseas

Expats with financial or family interests in their home countries often have to go to local notaries to sign powers of attorney and other formal documents to handle legal matters in their home countries. Differences between the legal systems mean that these types of formalities generate more complications than we’d imagine possible.

The main problem arises when the law requires that a particular document be executed as a “public” notarial instrument for it to be valid. In Spain, for instance, legal transactions such as granting powers of attorney and transferring real estate are only valid if they are executed via a notarially-recorded “public document”. But there are countries, e.g., most common-law jurisdictions, where this type of “public document” does not exist.

What makes a document “public” in countries where this type of instrument does exist depends on the law in each country. In Spain, notarial documents are public documents, which guarantees that the facts stated in these documents are true in accordance with what the notary public has personally verified, and that, from a legal point of view, the statements of intent made in these instruments are authentic. Basically, all these characteristics give such documents privileged probative force.

We can only be sure that a notarial instrument will be recognised as such and, therefore, as a public document in the country where it is to be used, if the notary public who authorises it confirms in the document itself that all the legal requirements have been met, both in the jurisdiction it was executed and where it is to be used. In these cases, as a complement and guarantee to the service provided by the local notary, it is advisable to seek the advice of a lawyer who knows both legal systems.

Carlos Prieto Cid – Lawyer

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The red tape involved in letting a holiday home in Catalonia

Renting out a coastal property to holidaymakers in summer has become quite complicated, although most foreigners are unaware of the many obligations involved.

In recent years, the Catalan regulations on letting tourist accommodation has become particularly strict. The main political reason for this toughening up of the legislation is a cracking down on tax evasion as many letters of holiday accommodation do not declare their rental earnings in Spain (which is required by law, regardless of whether the owner of the property is a resident in Spain for tax purposes).

However, there is an even more compelling reason for the Catalan government to want to control access to the holiday accommodation market. On the coast and in the old parts of the larger cities, particularly Barcelona, tourist flats have become a social problem, owing to the not always civil behaviour of the holidaymakers (who change from week to week), and also an economic problem, owing to the unfair competition such accommodation represents to the hotel sector.

Before you can let your property to tourists, you must register it in the local council’s register of tourist accommodation. Not doing so makes you liable for some very stiff fines (even for just advertising the accommodation online without anyone actually coming to stay). To be listed in the register, you need to certify that the dwelling complies with certain conditions of habitability and energy efficiency. You also need to register the property with the tax authorities so the corresponding tourist tax (paid per night by each tourist) and income tax can be collected.

Registering a property as tourist accommodation can result in unexpected complications (which may even make it impossible to let the property). If you have a flat or house you want to let to tourists, we offer services to assist you in registering the property with the local council, drafting the letting agreements and ensuring compliance with all the official and tax obligations for total peace of mind.

Carlos Prieto Cid – Lawyer

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New Comprehensive Advisory Service for Property Owners

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 your property is fully protected legally?

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

Tarraco Iuris global management

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Acquisition of property by non-residents: important issues that must be considered

We take a lot of risks when deciding to buy a property in Spain. If
the seller is a non-resident owner, there are specific risks that are usually not taken into account by investors.

A big part of the real estate on the Spanish coast belongs to owners who do not reside in our country and it is usually a house or apartment for holiday. If we buy this real estate to owners who are not residents, we must not forget the need to
be cautious to avoid later unexpected problems with the administrations.

The most common risk is the obligation to pay the council tax on the increase in value of urban land (the so-called “plusvalía municipal”). The law provides that this tax should be paid by the seller, and so, the buyer does not usually care about this expense when calculating the total cost of the investment transaction. However, when the seller is not a resident, the law obliges to pay this council tax to the buyer as a substitute of the seller, the one who should be actually required to pay it. This exception to the rule has its own logic, as it tries to avoid that the administration has to prosecute abroad the non-resident sellers who did not pay their taxes voluntarily, because when they sell their property in Spain, they very often do not retain any other property in the country, and, therefore, they are technically insolvent. In this case, the municipality requires the payment of the tax to the party who is closer and this is the buyer.

That is why during the registration of the purchase contract we should require the seller the corresponding provision of funds (or withhold the foreseen amount of the tax from the money that is still owed ​​to the seller for the property). If this exception to the general rule is not considered and no precautions are taken, in the case that the municipality requests that we as buyers pay the tax on the increase in land value because the seller did not pay this tax freely, we will have no choice but to undertake this payment, because, before the Spanish administration, we would be the only one who is obliged to pay. Another thing is that we can claim ourselves afterwards from the seller what we have paid to the municipality, through a civil action against him.

Carlos Prieto Cid – Lawyer

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Planning your succession by setting up a company

One of the most important legal topics for owners of apartments or houses in Spain is how to transfer this property to their heirs with minimal tax and handling cost. An interesting option is to set up a trading company (or other type of legal entity) and transfer the property to it

The following pattern is very often repeated in many families, who spend their holidays every year in Spain: a couple buys a property by the sea to come here every summer with their children; the children grow up, create their own family and continue spending the holidays with their own children in the house of the parents. The grandparents, often pensioners, keep the property in stand and handle all related processes, while the children spend with the grandchildren their holidays there. This situation persists without any problems until the moment where the grandparents can no longer take care of the property for reasons of age. From this point on, and especially after the death of grandparents, the new co-owners have to face, if no precautions have been taken, apart from the usual problems of handling an inheritance, the problems of the management of the property, which is alternately used by the heirs. In addition, the summer residence of the family is often not used exclusively, and the time periods in which the family does not use it personally, is rentes to tourists, thus creating rental income from property.

One way to simplify the procedure of inheritance and, above all, to allow easy control of the house and the income it can generate, is to create a commercial company, which eventually becomes the owner of the property. It would be ideal to set up the company before the acquisition of the property takes place. In this case, the company would already would be the owner of the property from the beginning and the cost of the transfer of the property from the previous owners (the grandparents in the above example) to the company does not arise. But even if this is not the case, the tax costs of this transfer are lower than that of the transfer to the children through inheritance or gift. Shareholders of the company may change over time (you can include other children and even their spouses) without change of ownership, which would imply costs and taxes on the transfer of property.

Carlos Prieto Cid – Lawyer

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Under the new Entrepreneurs’ Law, a residence permit can be obtained by purchasing a property in Spain

In enabling this, the Spanish government is attempting to reinvigorate the property market by attracting foreigners from outside the European Union with the granting of a residence permit for investing in Spain, which brings the added benefit of being able to move virtually freely around various member states under the Schengen Agreement.  

Here, too, there is a danger that an investor will view the purchase of a property as an opportunity to do business in Europe.  This can mean that they fail to check sufficiently thoroughly as to whether the purchase of the property is safe and reputable, as they want to take advantage of the opportunity to gain legal residency in Spain.  The risk is the same as for the tourist who wants to enjoy their holiday rather than attending meetings with lawyers.  In this case, too, the investment is a means, not an end, for just as the tourist sees the acquisition of a property as a means that secures them their holiday in Spain, the entrepreneur sees their opportunity to obtain a residence permit by purchasing a property, which then enables them to move freely around the Schengen area.  Both view getting adequate protection for their purchase as unnecessary.  If any problems subsequently arise, they find themselves compelled to find a lawyer to solve the problems arising from their failure to seek independent, professional advice.  However, by then it is often too late, and if there is a solution, it will involve much higher costs than if they had sought advice at the right time.  Well-advised investors can avoid making such mistakes.

Carlos Prieto Cid – Lawyer

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Purchasing property in Spain as an investor, not as a tourist

Each year, many of the millions of tourists who spend their holiday in Spain decide to buy a property in their destination country.  However, when investing their savings in Spain, they often act whilst still in a holiday mood, and make major decisions without due care and attention.

In almost any language, the term ‘tourist’ leaves a slight aftertaste in the mouth.  Airlines offer their cheapest tickets under the heading ‘tourist class’, while in every country that survives on tourism – and Spain is no exception – tourists are seen as easy prey who are only in town for a short period of time and can easily be taken for a ride.  This image of the typical tourist, whom it is easy to hoodwink and escape unpunished, is largely down to their poor language skills and lack of knowledge of the local customs, but also because tourists are on holiday, of course, and want to enjoy their short time away from home and are therefore relaxed and less vigilant.  As a result, they do not act with the same amount of care as they might in a similar situation at home.

Purchasing a property always involves a large outlay.  In many cases, sums are invested which represent many years of saving.  Such a decision should be given the appropriate degree of protection and made with as much information as possible on the potential legal and financial risks.  Sadly, as lawyers, every day we see how foreigners are conned when purchasing a property and lose their money as a result of failing to seek advice.  Often, people think they don’t need any advice, but then comes a rude awakening.  The cost of an independent consultation is minimal compared to the often hidden dangers when signing a contract of sale for a property; and such advice can only be independent if it has no connection with any other professionals involved in the sales contract.

Carlos Prieto Cid – Lawyer

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