Big refunds could be on the way for home sellers over “Wrong tax charge” in Spain

Many people have paid a ‘plusvalía’ levy when selling their property, even if its value has dropped, but this might be declared unconstitutional.

After the scandal over the misleading sale of preferential shares in savings banks and the upcoming big payouts to homeowners for ‘floor clause’ interest rate over payments, the next wave of mass financial lawsuits and possible refunds is already on the horizon.

An increasing number of property owners are taking legal action

An increasing number of property owners are taking legal action against local councils over the forced payment of ‘plusvalía’ (increased value) tax when they sell up. Town halls are continuing to charge the seller this tax even if the property is being sold at less or at the same price than the price they originally paid for it. Also, there are cases involving properties in which the sales price was slightly superior to the purchase price but once all the expenses were deducted, there is no gain actually.

The loophole arises as the value of the home that the council uses for it calculation is its ‘valor cadastral’, (official taxable value). Following the pre-crisis property boom, real market values rose well above this official valuation and councils can still therefore keep collecting the money, which is an important source of revenue, even if the seller is losing money.

Legal actions are taken

An increasing number of people are taking legal action against councils. In December, a case was filed against Fuengirola town hall, after a woman who had bought a flat for 220,000 euros and sold for 70,000 euros less still had to pay 5,000 euros of this increased value tax. Our Law firm won this case.

Campaigners against the charges, who are increasing in number, argue that the charge violates article 31 of the Spanish constitution which covers taxpayers’ rights.

In order to study a possible claim, the following documents are necessary:

• title deed of the purchase
• title deed of the sale
• and the proof of value added tax payment.

Hoping this information will be of your interest, I am available for any other information you may need.

Do you want to check the profile of Caroline and get in touch with her, our legal partner in Andalusia?

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Caroline

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What is the short term rental regulation in Andalusia?

Our local partner, Caroline, is working at the biggest law office in Andalusia and gives us an update on short term or tourist rental regulation in Andalusia.

The 2^nd February 2016, the Government Board approved decree 28/2016 which regulates the properties with touristic purposes. It intends to facilitate the coexistence of all the different accommodation types.

Entrance in force

Three months after the Decree publication in the official Bulletin of the Junta of Andalusia.

Object

The object of this decree is to regulate the properties that offer touristic accommodation service in order to establish a set of minimum quality guarantees and security for tourism users.

Application area

It is understood as properties with touristic purposes all the properties located on land for residential use which will offer, for a price, an accommodation service in the area of the Autonomous Community of Andalusia, on a regular basis and with touristic purposes.

It is presumed that there is a regular basis and a touristic purpose when the property is marketed or promoted by means of touristic supply channel.

The touristic supply channels are: travel agencies, companies that intervene or organize touristic services and channels that include the possibility of reserving accommodation.

The following are excluded from the application area of the rule:

1. Properties that, for vacation or touristic purposes, are lent without a financial consideration.
2. Properties rented for a longer period than two months used continuously by the same person.
3. Properties located in rural areas.
4. Complexes composed of three or more properties by the same holder or exploiter that are located in the same property or group of properties, adjacent.

Types of properties with touristic purposes

1. Complete, when the property is provided completely
2. By rooms, where the owner lives in the same.

The maximum capacity of these will be limited as provided by the Occupation License. When the property is complete, it cannot be more than 15 positions, and in the case that it is rooms, it cannot be more than 6 positions. In both cases, it cannot exceed four positions per room.

What are the obligations of the owner or person exploiting the property?

1. Registration in the Tourism Registry in Andalusia

At the beginning of the provision of accommodation services of the property with touristic purposes and to market the property, the corresponding declaration responsible before the relevant tourism board will have to be formalized.

Once the property has been registered, the registration code obtained will have to be indicated in all the publicity or promotion carried out by any mean.

The registration is free.

2. Formalization of the contract

All the users at the moment of the reception will be provided with a contract which includes at least the following information:

– The name of the person or the exploiting entity of the property

– The alphanumeric code of the registration in the Tourism Registry in Andalusia.

– The number of people that are going to occupy the property

– The entrance and leaving dates

– The total price of the stay

– A telephone number where they can be attended immediately.

3. House conditioning (Compliance of the touristic property requirements: see the full list at the bottom of this article).

4. Identification of the user of the property with effects of completing the corresponding entrance forms in accordance to the regulation in force.

5. Provision of the proof of payments of the services and down payments, made, if applicable.

6. Penalty System

When an owner has initiated a touristic activity without presenting the declaration, this will be considered as clandestine activity, being categorized the said activity as serious infringement by article 71.1 of Law 13/2011.

According to Law 13/2011, the infringements classified as serious will be punished with a fine from 2001 to 18000 euros. As an accessory fine, they can impose the suspension of the touristic services or the temporary closing of the establishment, if necessary, for less than 6 months.

What are the requirements for the House?

Requirements for properties with touristic purposes

Properties with touristic purposes must comply with the following requirements:

1. Have a First Occupancy Licence and comply at all times with the technical and quality conditions demanded for the properties.
2. The bedrooms will have sufficient direct ventilation to the exterior or to patios and a system of darkening of windows.
3. Being sufficiently furnished and fitted with the equipment and fixtures necessary for the immediate use and in accordance to the number of spaces available.
4. Air conditioning systems in bedrooms and living room for the period between May and September, both included. And for the period between October and April it must have heating.
5. First aid kit
6. Provide tourism information, physical or electronic media, of the area, leisure areas, restaurants and cafes, shops and supermarkets, car parks near the property, existing medical services in the area, urban transport, plan of the area and entertainment guide.
7. All the properties will have a Complain and Claims Form at the disposal of the users, and a sign informing of the same in a visible place within the property.
8. Cleaning of the property and the entry and leaving of new clients.
9. Bed linen, household items in general, depending on the occupation of the property and a replacement set.
10. Provide the users a telephone number to attend and resolve queries immediately, any consultation or incidence related to the property.
11. Have at the disposal of the users, information and instructions of the electric appliances or other devices that require the same for the correct use.
12. Inform users of the internal rules related to the use of the installations, rooms and equipment in the property as well as the admission and existence of pets in the property, restrictions for smoking as well as the restricted areas.

Source: INFORMATION NOTE: DECREE 28/2016, OF THE 2^ND FEBRUARY, CONCERNING PROPERTIES WITH TOURISTIC PURPOSES AND MODIFICATION OF DECREE 194/2010 OF THE 20^TH APRIL, CONCERNING THE ESTABLISHMENT OF TOURISTIC APARTMENTS

Check the full profile of Caroline and her team and get in touch with her, our legal partner in Andalusia?

Caroline

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Almería, one of the Andalusian pearls

Almería, located to the east of Andalusia, is one of the most beautiful provinces of Spain. The Natural Park of Cabo de Gata is one of the most beautiful in Europe with its virgin beaches that were not touched by the real estate unrest that lived the Iberian country at the end of the last century.

But Almeria is not just Cabo de Gata. The province offers other great places such as the beaches of the Dead or the Genoveses, as well as monuments such as the Cathedral of Almeria or the Plaza de Toros de Vera. As a curiosity, between 60 and 70 Almeria was “set” of spaghetti western movies, and today you can still visit the facilities, known as Oasys MiniHollywood.

Why Almería?

Apart from the previous reasons, this province enjoys mild temperatures throughout the year. For example, Almeria, the capital, has an average temperature of 20 degrees and more than 3,000 hours of sunshine a year. If you want to escape the rain this is the perfect place, since it does not rain more than 20 days a year.

In addition, you can do water sports throughout the year. The sea water is 17 degrees during the winter. But if in winter you want to enjoy the mountain and see the snow, in the same province there are the Sierra de Gádor, Sierra Alhamilla and part of the Cordillera Penibética.

How is the real estate market in Almería?

The average price of the province of the square meter is 950 €, being one of the cheapest in Spain. In the capital, Almeria, the price stands at € 1,100. Although it is superior to the provincial average, it is still far below if compared to other provincial capitals of the country.

Check this chart of Almería vs National averages.

The forecast is that the real estate market will continue to recover. For example, by the end of 2016 housing sales increased by more than 15%.

As for the foreigners, according to Steve of Spirit Invest Spain “English, Germans and Scandinavians are the biggest buyers.” In addition “the people of Northern Europe see Spain as a good opportunity to invest again in the real estate sector because of their prices.”

Where to live in the province of Almeria?

Of course, one of the best options is Almería, the capital. Its situation next to the sea makes it possible to go to the beach much of the year. In addition, its nearly 200,000 inhabitants make the city have all basic services covered, as well as hospitals, schools, shopping centers, etc.

If you want to live in a smaller place, but with beaches within a five minute walk, Roquetas de Mar and Mojácar are the best options. In addition, as Steve (Spirit Invest Spain) points out, “foreigners are investing in these two places.”

But if what you want is to enjoy the tranquility, interior and rural areas of Almería offer is a choice, with beaches and mountains nearby, so it is easy to make day trips to the area you prefer.

Read our article on the Costa de Almería: Everything you ever wanted to know about the Costa de Almería

Know everything on the Costa Almeria: its Airports, its AVE stations, its Cities and villages, its shopping places: Traditional & Flea markets, Outlets and shopping malls. What should you visit? The Unesco sites, the parks for kids, the green parks, the golf courses, the universities and last but not least the top beaches. Check out our infographic.

Find all our other detailed maps on all the Spanish Costas and the Costa de Almería

Getting around in Almeria

The network of roads makes it possible to reach any corner of the province easily. There are motorways that connect the city of Almería with the other provincial capitals of Andalusia, as well as the surrounding autonomous communities. Almería has an airport that offers flights to the main cities of Spain like Madrid and Barcelona.

If you want to invest in the Spanish real estate market in Spain, don’t hesitate to read our special report with the 10+ reasons why you should have a look at the Spanish property market.

Have a look at the yearly weather statistics of Almería and of the 18 biggest cities in Spain.

Have a look at our ePostcards before planning your next holidays in Spain.

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Looking for an expert in Spain? Ask us directly!

Raimon

Senior Journalist and writer at HTBIS

Check the full HTBIS team here

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After your reading, don’t forget to read our most updated article of December 2017 on the same topic: The top 10 Spanish cities where foreigners love to buy properties!

Check our full Quarterly Report updated as of December 2017 on the foreign Real Estate activity in Spain.

Full analysis for Spain, for the Costas & Islands and for the different cities

Spain Analysis

During the last year up to September 2016, Foreigners bought 17,4% of all properties sold in Spain according to the “Ministerio de Fomento”.

This is half a percent more than one year ago. Foreigners bought 77 451 properties vs 67436 last year: i.e. a 14,9% Increase. At the same time, the number of transactions in Spain increased from 398 631 to 443 997 last year: i.e. an 11,4% increase.

Real estate analysis for the Costas & Islands: Foreigners buy Sun and beaches!

In our infographic studying second home buying in Europe, one of the top attributes for the ideal property is being near to the sea!

It’s the third attribute after being close to an airport and having a “Scenic Location“. Other attributes are getting a good value, have a good resale potential, have the possibility for renting, have the ideal number of bedrooms, have a minimum size of 100 square meters and of course a hot climate. Check our full infographic below.

So you won’t be surprised by the following statistic: 85% of properties bought are in regions close to the sea: either on a “Costa” or on the Balearic or Canary Islands! If you subtract the sales for Madrid, which enjoy its own international reputation, you get the even more impressive number of 92%!

For sure, Foreigners come for the sunny beaches of Spain. Please check our Infographic for the many reasons why people want to buy a house in Spain.

The “Costa Blanca” is the first “Costa” with 23,4% of transactions, the “Costa del Sol” is the second with 14,2% of transactions and the “Costa Dorada” is the last one with 10,7% of the transactions. All those three regions continue to benefit from strong interests of foreigners. Interesting to note, the “Costa Calida” has a Year on Year growth of twice the average of growth of properties bought by Spain with 30%!

Remember, if you want to buy a property in Spain, you need a NIE, check our paper on that: Your ultimate guide to your Spanish NIE number.

Table 1 Activity by Costas & Islands analysis: Last year up to September 2016.

Real estate analysis for the Spanish Autonomous Regions

No surprise to see that the “Comunitat Valenciana” is the biggest Autonomous Region in term of transactions with close to 30% of the transactions. Andalucia and Catalonia are second and third with 20% and 15%. Check our infographic on this:

Table 2 Autonomous Regions analysis: Last year up to September 2016.

Real Estate analysis for the Spanish Cities

The first city region to be blowing is Alicante with 23% of the transactions done last year! That means that more than 18 thousand properties were bought there.

Malaga is the Second one with 14% of the properties sold and Barcelona is third with 8%. The Growth is impressive and above 10% for all the top 8 Cities. The two strong growth areas in the top 10, in terms of transactions, are Santa Cruz de Tenerife with a 26% growth. The region of Murcia grew by 30%. In the less traded markets, the region of Cantabria, Huesca and Jaen all noticed growth higher than 45% versus the same period of last year.

Table 3 Cities analysis: Last year up to September 2016.

Read our update of December 2017 on the same topic: The top 10 Spanish cities where foreigners love to buy properties!

Check our full Quarterly Report on the foreign Real Estate activity in Spain.

Source: Ministerio de Fomento. Data updated up to September 2016.

Looking for an expert in Spain? Ask us directly!

Stéphane

Senior analyst and strategist at HTBIS

Check the full HTBIS team here

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