ASPECTS TO CONSIDER:
In our previous article, we made a brief mention of the problems that could occur when buying real estate.
We know that during the lives of almost the vast majority of people, buying a home is usually the most important decision in quantitative terms.
Additionally, if we are thinking of investing to obtain a profitability, we must consider many other factors that can have a very negative impact on our valuation project or expected rate of return.
Let's start from the assumption of a buyer who is a "non-resident", who wants to buy a home to spend their holidays in Spain.
It is evident that the language barrier and knowledge of national laws demonstrate the need to hire the services of a good advisor. Even more so when we are talking about a self-promotion project, which requires the almost constant presence of the interested party to be able to “audit” the evolution of the works.
And it is advisable to choose a good or good professional precisely to avoid buying in poor condition without taking into account factors such as taxation (subsidiary tax liability, annual taxes, future capital gains and inheritance or donation), urban incidents or problems with the law. real property.
Taxes that a buyer must face when acquiring their home:
-Value added tax (VAT): this tax is levied on the transmission operations of the property in the first of the transmissions carried out by professionals or businessmen, that is, the one that occurs when the property is basically new.
The tax rate is reduced and amounts to 10% (4% if it is an Officially Protected Housing) and includes parking spaces and annexes to the home (a storage room for example).
Also the VAT is present in the purchase of land considered buildable, that is, those suitable for construction.
The VAT is an indirect tax that falls on consumption and whose scope of application is the national territory with the exception of: Canary Islands, provinces of Ceuta and Melilla, the Basque Country and Navarra.
That is, if we buy a new construction house in Benidorm, an additional 10% will have to be added to the purchase price for indirect taxes.
-Tax on Patrimonial Transmissions (ITP): it is the tax levied on second and subsequent transfers made between individuals and its tax rate depends on where the property is located, since this tax was transferred to the Autonomous Communities in 2009.
What does this imply?
Well, basically, if you want to buy a house in the Valencian Community, we will pay an additional 10% as a Property Transfer Tax to the sale price agreed between the parties; On the other hand, if we buy the same property in, for example, Andalusia or Madrid, the tax rate will be different.
-Tax on Documented Legal Acts: this is a tax levied on notarial deeds, minutes and notarial testimonies.
This tax is compatible with the application of VAT as well as ITP.
That is, regardless of whether VAT or ITP is paid, you will also have to face the payment of this tax, by raising the purchase of the home before a notary public.
The Tax on Documented Legal Acts is made up of a fixed fee (0.15 euros per page) and a variable fee, which will depend on the declared value, which amounts to 0.5%.
In addition, the fees of the Notary will have to be added, so in general practice, what is done is to request from the corresponding Notary Public a written estimate of all these expenses in order to know in advance the total expenses.
PROPERTY REGISTRATION
Registering your home in the Registry is an administrative act of vital importance, since it entails the protection of the rights granted by the Registrar, by being recorded in the Registry, as the legitimate owner of a real right against third parties. For example, if there are several buyers of the same real estate, the right of the person who has registered their right in the first instance in the registry will prevail before the courts (principles of priority and unenforceability).
That is, if you are not registered in the registry, you are not officially the owner of full ownership of a property and therefore, third parties could claim ownership due to the lack of proper registration legitimacy.
The right takes effect as soon as the Registrar has made the registration entry. The term established to make this entry is 15 days from the presentation of the title (purchase deed) that grants ownership of the asset.
The best way to know the current ownership of a real estate is through the request for a certification or simple note in the registry where the property is located.
The Certification is an official document that attests to the content of the registry entries and is considered a public document unlike the Simple Note, which is merely informative.
In addition, the information contained in the registry entries is in the public domain, which means that anyone can request information about the registered rights and the patrimonial affectations and the latter is very important when buying a house.
What types of patrimonial affectations can exist in a Real Estate?
When we buy a home, the first thing to do is find out if there are debts or property limitations.
To be effective, these debts or limitations must be registered in the property registry and appear when we request a certification or simple note.
Thus we have the so-called charges or encumbrances, which are real rights that fall on the real estate.
For example, limitations such as usufruct, right of use and habitation, right of easement, emphyteusis, mortgage, pledge and antichresis may appear in these certifications.
But preventive annotations may also appear that indicate the existence of embargoes decreed by the judicial authority.
Likewise, it should be verified if there are other types of debts, which would not appear registered and which are in force at the time of purchase, such as debts derived from local taxes and expenses of the community of owners, if applicable.
-Real Estate Tax:
This is a local tribute that is regulated in RDL 2/2204 and its management is in the hands of the City Councils. It is a tax that is levied on the ownership of real estate (both rustic and urban) and its tax base is the cadastral value.
The ownership of other types of real rights, such as surface rights, usufruct or an administrative concession is also taxed.
The tax rate depends on each municipality but it cannot be less than 0.3% -0.4% or higher than 0.9% -1.1% (depending on whether it is a rustic or urban real estate.
In addition, each year the city council will accrue a fee for the management of urban solid waste.
In the Province of Alicante, the Office that is in charge of collecting this tax and rate is SUMA, so we must also go to their Offices to be able to process the change of ownership of the property, otherwise, the continuous non-payment of this Tax may ultimately lead to the execution of the lien and the sale of the property to satisfy the outstanding debt.
-National direct taxes:
The possession of a Real Property by a Non-resident entails being subject to multiple taxable events that are often ignored by the owners, and may lead to the imposition of penalties and interest, but this topic will be the subject of another article.
In summary, as a professional, I advise you to have a company like Abahana Villas, which can not only offer you a wide range of villas suited to your needs, but also with extensive experience in conveyancing and tax planning services.
