Let’s take one particularly disturbing example of what can happen. Mrs Jones is a non-resident who used to own a property in Spain. In July, unknown to her, it went to property auction and was sold to a third party for a price of less than half its value. The reason? She had failed to pay her I.B.I (council tax) bill and combined with fines and interest she owed €1,700. What was perhaps even more worrying was that Mrs. Jones hadn’t a clue what was happening as she had not been in Spain to receive her mail and there was no one available to check her post box. The other means of informing her of her debt also passed her by. The Boletín official del estado is a list of debts and other … [Read more...] about Avoiding the risk of Spanish property embargoes
spanish real estate
Buying a home in Spain: Dealing with new property defects
The builder or developer has to take full responsibility for any defects, hidden or visible. The finished product is down to them whether it’s an electrical, plumbing or structural fault, though the claim period does vary depending on the extent and severity of the problem. For example, simple defects related to the finishing, such as doors and floor tiles are covered for one year, while structural defects relating to the safety, integrity and inhabitability of the property are covered for up to 10. It is important that you make your claim as soon as you can after spotting the defect. For structural claims your builder is required to take out insurance and may also have taken out … [Read more...] about Buying a home in Spain: Dealing with new property defects
The myths about renting property in Spain
However, for some, there is an alternative. Renting is now the new buying. It seems like everyone is doing it and whether you want to upgrade, downgrade or just try a new area, it can be the solution to a sluggish market. It can also be a worry. Stories of terrible tenants and unlucky landlords bounce around the forums. It seems that everyone knows someone with a cautionary tale to tell. Of course, what you don’t hear as often are the success stories where it all came together with a happy ending. For those considering the renting option, let’s dispel a few myths first. Here are some of the snippets of conversation you might here at your local: Myth: ‘Tenants have all the rights in … [Read more...] about The myths about renting property in Spain
Calculating complimentary tax on Spanish property
Of course, more research might have unearthed the possibility of this tax. But many purchasers expect the information to be given to them. Unfortunately, those keen to sell property are not always as keen to inform you of the taxes you can expect to pay. Ironically, this lack of transparency is one of the reasons so many possible purchasers are anxious about buying in the first place. However, complimentary tax need not be a skeleton in the closet, provided you prepare for it. This tax, levied on purchases up to five years after the purchase date, consists of 7% of the difference between what you declared you paid and what the Tax Authority claim it is worth. Plus interest, of course. It … [Read more...] about Calculating complimentary tax on Spanish property
Wave of complimentary tax hits home buyers
What is complimentary tax? During the property boom in Spain purchasers and sellers sometimes came to an agreement to pay some of the purchase price ‘unofficially.’ This meant that the amount declared was below what had actually been paid. The idea was that by doing this purchaser and seller could avoid higher capital gains tax and Spanish transfer tax payments. The Tax Authority wised up to this and as a result began to check the amount the property had been sold at against their own valuation. Complimentary tax represents the difference between what tax they considered should have been paid and what actually was. Unfortunately the drop in the market value of most property sold today … [Read more...] about Wave of complimentary tax hits home buyers