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Transfer Tax Update 2013
27/08/2013 09:39 AM

Thank you again to Juan Carlos Marhuenda at TLA Corp lawyers for producing this article for our clients regarding the update in the transfer tax in August 2013. For further information on all tax and legal aspects please visit their website at www.tlacorp.es

 

On the 2 - INHERITANCE TAX

WE ARE COMENTING IN THIS ARTICLE THE MAIN ASPECTS AFFECTING PURCHASE/SALES

VAT on NEW PROPERTIES (properties acquired directly from builders), from 8% up to  This modification, initially,  was not affecting RESALES (properties acquired from a particular), which are not subjected to VAT. Resales are taxed with another tax called “Transfer Tax” (Impuesto sobre Transmisiones Patrimoniales)  . So, resales, in Valencia region was at 8 %, also in other regions as in Murcia.

nd of August 2013,  buyers will pay the 10 % on properties based in Valencia Region (Alicante, Valencia, Castellon), and in Catalonia (Barcelona, Lérida, Tarragona, Gerona).

Stamp Duty,  has been increased up to  - In New Properties, together with 10 % VAT

- When there is an update of the deeds declaring a new construction, or extension, etc.

- ACQUISITION OF NEW PROPERTIES in Spain (Valencia, Catalonia, Murcia, Andalusia), pays 10 % VAT + 1,5 % Stamp duty.

- In Catalonia+Valencia Region: Pays 10 % Transfer Tax

- UPDATE OF DEEDS in Murcia, Valencia, and Catalonia: 1,5 % Stamp Duty

 

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Inheritance tax update
27/08/2013 09:35 AM

Thanks to our friends at TLA Corp in Albatera. They have produced an article for our clients to explain the recent changes to the inheritanace tax law in the Valencian region. For more information please contact TLA directly via their website www.tlacorp.es

 

MODIFICATION IN TAX REGULATIONS – AUGUST 2013-08-26

On the 2nd of August 2013, Valencian Government has modified determinate regulation in relation to:

- INHERITANCE TAX

- PURCHASE OF PROPERTIES

WE ARE COMENTING IN THIS ARTICLE THE MAIN ASPECTS AFFECTING INHERITANCE TAX

As explained in various articles on this site, there is a difference in Spanish Inheritance Tax for SPANISH TAX RESIDENTS, and for SPANISH NON RESIDENTS

This new regulation is AFFECTING ONLY to SPANISH TAX RESIDENTS WITH DOMICILE IN VALENCIA REGION (Alicante, Valencia and Castellon). So, this new regulation is NOT AFFECTING to those who are NON SPANISH RESIDENTS.

For Spanish Tax Residents, with domicile in Valencia Region, the new changes are the following:

REDUCTION ON THE TAX BASE

- Descendants, or adopted younger than 21 years old: 100.000 – 156.000 EUR
  • Before, the reduction on the tax base was from 40.000 to 96.000 EUR, depending on the age of the inheritor.
  •  Now, the reduction on the tax base is from 100.000 – 156.000 EUR, depending on the age of the inheritor

- Descendants, or adopted older than 21 years old,  surviving spouses, and ascendants: 100.000 EUR

  •  Before, the reduction on the tax base was of 40.000 EUR
  •  Now, the reduction on the tax base is of 100.000 EUR

- IN CASE OF PERMANENT RESIDENCE: REDUCTION 95 %

In case that the property inherited was the permanent residence of deceased, there will be a reduction on the tax base of the 95 %, with a maximum of 150.000 EUR, subjected to the following conditions:

  • Only when inheritors are descendants, ascendants, surviving spouse, or correlatives older than 65 years old (living with the family at least 2 years before the decease).
  •  The property must be used as the permanent residence of the inheritors DURING, AT LEAST, 5 YEARS.

REDUCTION ON THE TAX RATE

Once the Tax base is calculated (in consideration with the eventual reductions obtained), then, the Tax base resultant will have also a reduction, when the inheritors are descendants, ascendants, or surviving spouse:

  •  Before, the reduction on the tax rate was of  95 %
  •  Now, the reduction on the tax rate is of 75 %

 So, for example:

EXAMPLE 1: A+B own a property in Torrevieja (Alicante), Spain 50 % each for a tax value of 250.000 EUR.  Both of them are Spanish Tax Residents. Both of them have “mirror wills” passing one each other the property in case of death.  They are using the property as permanent residence.

A passes away, and B inherits the 50 % of the A part.

So, the Gross Tax Base from the A part to be inherited by B is : 125.000 EUR (50 % from 250.000 EUR).

- If B wants to be using the property as permanent residence with a minimum of 5 years, then, a reduction of the 95 % of the tax base can be obtained (with a maximum of 150.000 EUR). So, the Net Tax Base of the tax will be of 6.250 EUR.

Following the scale of the tax (not explained here), the tax rate to pay for a tax base of 6.250 EUR is around 478 EUR. This is the Gross Tax Rate.

Then, as B is surviving spouse from A, then, obtains a reduction of the 75 % of the Gross rate, so, the final Net Tax Rate to pay will be of around 120 EUR.

- If B does not want to use the property anymore, and wants to sell it, as surviving spouse,  it can be obtained a reduction on the Gross Tax Base of 100.000 EUR. So, the Net Tax Base will be of 125.000 – 100.000 = 25.000 EUR.

Then, the Gross Tax Rate for 25.000 EUR will be of 2.200 EUR (following a scale). And, being the surviving spouse, B would have a reduction on the Gross Tax Rate of the 75 %. So, the final and Net Tax Rate to pay will be of 550 EUR.

EXAMPLE 2 : A+B have 2 sons: SON 1 and SON 2 older of 21 years old. They are also Spanish Tax Residents.

A passes away and leaves the property in Spain to B, SON 1 and SON 2 in equal parts:

So, from the A part inherited (125.000 EUR) here there is the Gross Tax Base received from the 3 inheritors:

 B part: 83.333 EUR /   SON 1 : 83.333 EUR / SON 2 : 83.333 EUR

 - If  the THREE of them want to be using the property as permanent residence with a minimum of 5 years, then:

Starting from B, as surviving spouse, it can be obtained a reduction on the 95 % of the Gross Tax Base. So, the Net Tax Base of the tax for B will be of around 4.160 EUR.

Also, for SON 1 and SON 2. They are A descendants so, they can obtain also a reduction on their Gross Tax Base of 95 %- So, they will have 4.160 EUR each.

Following the scale of the tax (not explained here), the tax rate to pay for a tax base of 4.160 EUR is of around 318 EUR. This is the Gross Tax Rate that each of the inheritors have to pay.

Then, as B is surviving spouse from A, and SON 1 and SON 2 are descendants, they obtain a reduction of the 75 % of the Gross rate, so, the final Net Tax Rate to pay will be of around 80 EUR each.

- If they do not want to use the property anymore, and want to sell it, as surviving spouse, and descendants, they can obtain a reduction on the Gross Tax Base of 100.000 EUR. So, the Net Tax Base will be of 83.333 – 100.000 = 0 EUR. As the result is “0”, no more reductions can be used in this case. So, in this case, the tax rate to be paid by each one of the inheritors will be “0”.

CONCLUSION:

FOR AN AVERAGE OF PROPERTIES WITH A TAX VALUE 250.000 EUR OR LESS, THE SPANISH INHERITANCE TAX MAY BE VERY LOW, OR EVEN “0”, IF:

- THE INHERITORS ARE LIVING PERMANENTLY IN SPAIN-VALENCIA REGION- AS SPANISH TAX RESIDENTS

- THE INHERITORS ARE SURVINING SPOUSES, OR ASCENDANTS, OR DESCENDANTS

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What is a Nota Simple
24/07/2013 09:48 AM
Clients often ask us about the array of paperwork required when purchasing or selling a property, so hopefully this article will prove useful.
 
A Nota Simple is an official extract report that contains a full property description and can be obtained from the local property title registry office or, by subscribers, over the Internet. This is a very important document in Spain, as it contains information about the legal status of a property. If you intend to buy a property of any kind, it is very important to know who is the registered owner, what is the registered description and what legal charges or restrictions are registered against the property.
 
The information contained in the Nota Simple includes:
 
*The current owner(s), their relationships and when they bought it;
*Any debts secured on it that must be paid before its ownership can be transferred e.g. mortgages, unpaid taxes, community debts, private debts, etc.;
*The boundaries of the property, though these are often hazily described as just the land owned by their neighbour;
*The total square metres of the land and the gross overwall area of all built structures;
*The use of the property (whether residential, agricultural, etc);
*The rights that others may have on the property e.g. public paths and rights of way, roads, water, sewage, etc.;
*The share of the costs of the community of owners in which it lies;
*And if you are really fortunate, the Catastral reference. (Described in another article)
 
Before you request a Nota Simple, you will need to provide the following information:
 
*The full name of the individual owner or owning company. Ideally, but not essentially, you should also have the NIE, CIF or passport number.
Or
*The Property Registry data, which can be either the Finca number or the unique identification number: IDUFIR.
 
With either of these sets of information you can carry out a search of the whole of Spain and obtain details on all the property owned by an individual or company. As there can be many owners with similar names, it’s best if you can restrict the search ideally to the minimum of which registry office the property is registered in.
 
You can obtain a Nota Simple in Spanish, from the land registry and this can be requested in person at any registry office. Alternatively, go online where requests are usually obtained within 24-48 hours. In both methods there is a small charge. Alternatively, ask somebody with a subscription to obtain information for you.
 
Document fileAs stated above, the Nota Simple will contain information as to whether there are debts associated with the property. It is possible for debts of an individual to be attached to the property he owns although they may have no other link to the property itself. Be aware that if there are debts attached to the property, then it is essential that they are cleared before the ownership is passed over to the buyer, otherwise they will remain and become the responsibility of the new owner.
 
Inaccuracies
You may find, on receipt of the Nota Simple that its description is not the same as the actual property. An error in the description of either accommodation or the floor area is important and should be rectified by the seller prior to the sale. It may be that improvements have been carried out on the property and their absence on the document is sometimes an indication that work has been carried out without permission.
 
Inaccuracies may also mean that a mortgage valuer working for a Spanish lender or insurer could have to value on a reduced basis, as they are obliged by law to use the lesser of the actual area and that recorded in the title, whenever there is a difference between the two. Outbuildings such as garages, stores and even swimming pools should be recorded too, as this all affects the value of a property. However, unless you have an excellent grip of Spanish or are adept at dealing with Spanish bureaucracy, it is recommended that the Nota Simple is discussed with a legal expert or property professional, to make sure that all is in order and the property meets your requirements.
 
Assistance
If you would like more information about the Nota Simple and how it could affect you, the team at Survey Spain Network is available to offer informed help and advice. We have the advantage of carrying out Acquisition Surveys of the building and being able to compare the actual property with the Nota Simple and the Catastral description (see other article) and thus make sure that differences are caught prior to purchase, so that correcting them remains the responsibility of the seller and is not transferred to the buyer, at his or her future cost.
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Parliamo Italiano / We speak Italian
02/06/2013 11:06 AM

We have pleasure in announcing a new member to our team at HvH.

Pierre joins us from Belgium but is actually Italian and will now be handling the Italian side of the business. With many years in International real estate sales and marketing Pierre is already proving invaluable when dealing with customers from Italy. Pierre also lives in the Hondon Valley in the small village of Macisvenda. 

Welcome.... or should I say BENVENUTO !

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New rules for UK passport holders in Spain
08/05/2013 02:27 PM

 

New Passport Rules for UK Nationals in Spain

 

You may remember that Cyprus expats were recently told that they need to get their passports via the UK. The British Embassy said they would tell us if the rules for Spain changed. Well… as of this coming Monday they will.

Press release: 7 May 2013

CHANGE TO PASSPORT SERVICE FOR BRITISH NATIONALS

British nationals in Spain wanting to apply for a new passport are advised of an important change in the way they will need to make applications. From Monday 13 May, all applications will need to be sent directly to the Identity & Passport Service (IPS) in Belfast in the United Kingdom, instead of the regional passport processing hub in Madrid.

All the necessary information about the new passport application process, including a new IPS overseas application form, can be found at www.gov.uk/overseas-passports.

Andy Hamilton, head of the regional passport processing centre in Madrid, says: “In real terms, all that this means is that British nationals living in Spain now need to send their applications to a different address.”

“Current passport processing times remain the same. If you are renewing your passport, you should allow at least four weeks from the date the fee is taken and all the correct documentation has been received.”

“If you are applying for the first time or you are replacing a lost or stolen passport, you should allow at least six weeks.”

The only other change is that the current passport helpline call charges are being removed. Instead of paying for a premium rate phone line, customers will now only have to pay for the cost of a call to the UK.

British nationals who lack internet access or want advice are able to call the IPS Customer Service Centre on +44 (0) 300 222 0000.

People who need to travel urgently but whose normal passport is unavailable should contact their nearest British Consulate via 902 109 356 or email info.consulate@fco.gov.uk . Your local Consulate may be able to issue an Emergency Travel Document to help you travel.

Note:

Fees charged for overseas passport applications are based on the cost of providing the service. Because the number of overseas applications is smaller and efficiency gains are harder to achieve, the issuing of all British passports is being repatriated. Once this has been completed worldwide in 2014, IPS will seek to more closely align overseas and UK passport fees.



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Certificate of Energy Efficiency
12/04/2013 04:12 PM

 

On 1st June 2013 a new law will be introduced that makes it compulsory for property owners to obtain a Certificado de Eficiencia Energética (CEE) in order to sell or rent a property. Basically, selling or renting your home will be no different than buying a fridge freezer, certified information must be provided to the prospective buyer or renter about how energy efficient the property is. All flats and houses built after November 2007 should already have a certificate stating how efficient they are in terms of energy use. However, for those built before that date it will be necessary to contract the services of a professional company that will carry out the study and produce the certificate.

 

This certificate presents the information graphically via a colour-coded scale from A to G, similar to the labels that you can find on electrical appliances in stores. The certificate will be valid for a period of 10 years, however a homeowner can voluntarily decide to request a new certificate before the 10-year period expires. If you want to sell or rent your home then you’ll be requested to provide the certificate. Your home won’t be required to meet a certain standard (there is no fail level , just different grades).

 

We have interviewed several companies and our recommendation is Mayka Mira the Architect who is based in Frailes. She speaks English, is local, she is known to many of our customers and her prices are better than the other quotes received. The average cost is expected to be approximately 250€ plus IVA.

 

She can be contacted on

 

Mayka Mira Architect: Tel: 667 429 419

email: myk100@hotmail.com

 

(You are of course free to use which ever company you wish to and we will pass you details of other approved companies should you wish).

 

The survey takes about one hour to conduct and includes the full measurement of the property, orientation of the property and the measurement of all windows, construction qualities and heating and cooling systems. This information is then entered into a government system which awards you a grading between A and G. There is no fail grade. The report will also include assistance in raising your grade by two levels if possible.

 

A CEE must be obtained before a property is marketed and the information must be included in all advertising and agents websites . The certificate must also be produced at the signing of the contract of sale at the Notary. No property built before 2007 can be sold without this certificate.  Rentals, including holiday lets, must make a certificate available to tenants. Agents cannot legally offer properties for rent or sale without a certificate.

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Fiscal requirements 2013
12/03/2013 09:58 AM

 

The following information has been provided by our accountants for the purpose of informing our clients regarding their fiscal responsibilities if resident in Spain. If you require more information, please let us know and we will put you in touch with our accountants directly.

 

As of the 2012 financial year and in accordance with Law 7/2012 and Royal Decree 1558/2012, legal entities or individuals residing in Spain will be obliged to submit a yearly statement of any of the following assets held overseas:

1.- Bank accounts, savings accounts, bonds, credit accounts and any other financial accounts or deposits, even if they provide no income. Any account from which it is possible to make a withdrawl as the account owner or under the owner’s authority must be declared.

2.- Securities or rights representing shares in any type of company. Securities representing the transfer of equity to third parties. Securities submitted to any legal entity for their management or administration.

3.-Property or property rights

 

This statement must be submitted when the total assets of each of the previous groups has a joint value greater than 50,000 euros. In subsecuent years it will only be complusory to submit this statement when there has been an increase of over 20,000 euros on the last yearly statement submitted. It must always be submitted when ownership of the asset is terminated, either through sale, cancelation, or any other reason.

 

The fine for failing to submit this statement will be 5,000 euros for each unsubmitted data (minimum fine 10,000 euros). Fine for late submission of the statement will be 100 euros for each data submitted late (minimum fine 1,500 euros).

 

The following information must be provided for each group of assets:

1.– Accounts held in financial institutions.

 

Name and address of financial institution.

Full account number.

Date the account was opened or cancelled, or the date of authorization was transferred or revoked.

Balance at 31 December and average balance during the last quarter.

2.- Securities, rights, insurance and income.

Name and address of legal entity.

Balance of securities and rights at 31 December. Type and value of securities.

Net asset value of shares in companies at 31 December.

Surrender value of life and disability insurance policies.

Capitalization value of temporary or life annuities.

3.- Property and property rights

Identification of the property and its location

Date and cost of acquisition

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Facebook Page
11/03/2013 03:18 PM

We now have a Facebook page......

This is an easy format for us to load albums of images, videos and of course a selection of great properties.

You will find links to our Facebook page on the top right and bottom right of each page.

I hope you like it.... If so please like it.......

 

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Spring blossom in the Hondon Valley
03/02/2013 06:45 PM

Whilst the trees in Northern Europe are bowning under the weight of snow, the Almond trees in the valley are covered in pretty blossom. 24'C at the end of January !

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The Hondon Valley in January
16/01/2013 02:11 PM

A view of the Hondon Valley in January looking North east to the Sierra Algayat mountains and Elda and Sax ranges in the distance.

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