law firm profile law and tax information contact

Home Imprint

information

What to do when someone does not want o pay their dues [26 KB]
Making the wrong decision costs you energy, time and money

Questions about property rights

You’ve found the piece of land or the house that you’ve always wanted, but do you have the right to build on the property? What should you watch out for when you buy a house on Ibiza? And what happens if you and your partner separate later on down the line and each of you owns half?
These are just a few of the questions answered here.

Question: To what extent does the tax office check whether the value given for the calculation of the property acquisition tax following a transfer of property was correct?

Answer: The sales price is certified by a notary but is subject to verification by the tax office. The basis for taxation is always the real value of the property. If in doubt, the tax office has the right to carry out an independent survey to value the property and increase tax demands as required. This usually only happens if the tax office has some specific reason to believe that the certified value is too low: for example, if the property has been bought with a mortgage. The tax office knows that Spanish banks will only agree to finance two thirds of a property if the buyer is a non-resident foreigner. So if, for example, a mortgage of 400.000 euros is granted, but the stated purchase price is just 350.000 euros, it is likely that the tax office will have a survey carried out to check on the real value of the property. If the second evaluation puts the value at 480.000 euros, the tax office will demand that the buyer pays additional tax of 7 percent, i.e. about 10,000 euros plus default interest and a late payment fine.

Question: When planning to build on a piece of land, how can you find out whether planning permission has been given and what type of property must be built there?

Answer: Each community administration office has a town planning division, known in Spanish as Urbanismo. You can go there to consult the status of the piece of land in question and to enquire about the building norms, or normas urbanísticas, which contain precise details about which pieces of land within the community can be built upon. Most communities have a zoning plan according to which the community is divided into urbanizable and non-urbanizable zones. The area that can be built on according to the zoning plan can be specified through a community plan known as the Plan Parcial de Ordenación. This more specific pre-construction plan describes in detail the form and type of construction that can be carried out. This is also a means of ensuring that the planned construction has made enough provision for green areas as well as residential and business zones. If the property is part of a plan parcial, it can be difficult to find out what can be built upon it due to the fact that this can change from one piece of land to another. So although it is easy to gain access to and view the normas urbanísticas, it can be much more difficult to check the building norms if a piece of land is included in a plan parcial, especially if the process to grant planning permission is still ongoing. By the way, entries in the land registry, such as “building land”, for example, are no guarantee that you will be able to use the land for construction: these terms are non-binding and do not prevent the community administration office from declaring these “building plots” to be green areas.

Question: What happens if a foreign couple living in Spain separate and a property is listed in both their names at the land registry?

Answer: This is a complex issue that is addressed here very generally and without taking into account any foreign laws that may apply. If both partners contributed an equal amount to purchase the property, it is simple to come to an agreement if the couple see eye to eye on how their possessions are to be divided: one of them can agree to transfer his or her part of the property to the other. If the partners are unable to agree on this, a divestiture auction can be held to sell off the property. In order for this auction to be held, a document is required, which is normally acquired by filing a divestiture claim (demanda de disolución del condominio). The divestiture claim implements the right of every co-owner of a property in Spain to have free access at any time to his or her part of the property. However, only the full property can be auctioned off.
The situation is more complicated if one of the partners bought the property on his or her own. The Spanish supreme court has in the past decided that the separation did not entitle partners who financed the purchase to demand that their share be transferred to them by their partner. The court argued that the other partner had in a way contributed their share to the acquisition of the property through co-habitation. In this case, a clear agreement, e.g. in the form of a loan contract, should be made before the property is purchased.

Watch out for the term joint property [21 KB]