The current financial crisis in Spain, dwindling property values, and the desperation felt by many as they try to sell their homes before they are repossessed has created a buyers market for those with cash or approved funding. It seems prudent therefore to be aware of the legalities of buying or selling Spanish property, and thankfully Perez Legal Group in Marbella have created a freely downloadable ebook that runs through almost everything you should know.
Raquel Perez created Perez Legal Group with the objective of being different from other legal offices in Spain, and with her offices in Marbella, she and her team are very accessible to expat residents in Malaga province. Her group is the first to offer a weekly free legal clinic, and has created a book entitled “Spanish Legal Property Information” that can be downloaded free from the firm’s website.
“Spanish Legal Property Information” is a mini format ebook, that if printed on paper would be about the size of a typical language phrase book, and is 55 pages of legal advice that aims to give English speaking people a solid introduction to the basics of buying and selling property, property taxes, resident status, Spanish wills and inheritance taxes, and bank accounts.
The first thing to realise is that any transaction of property needs to be completed correctly in accordance with Spanish law, and the laws here in Spain are not the same as the UK, Ireland, or the USA. As well, Spanish law when followed correctly offers all of the protections expats expect back home, but in Spain many have lost a lot of money through incorrect application of the law. In many cases this has been due to unscrupulous sales agents, but the majority of cases might have been avoided if local laws had been better understood.
This is where “Spanish Legal Property Information” steps in. The guide briefly and succinctly explains how property ownership is registered, who has to pay the taxes, what your lawyer (abogado) has to check to make sure your rights are protected, and defines the various values that can be attached to property.
Specific vocabulary that is mentioned and explained includes plusvalia, IBI, escritura publica, catastro, hacienda, fiscal representative, NIE, incremento de patrimonio, padrón, usufruct. Whilst the guide is short (only 55 pages), this type of vocabulary is essential if you wish to understand the jargon used in property transactions, and without which you may misunderstand something important.
As an expat writer in Spain I find the majority of property owners will quickly learn about the legalities of owning property, but often never take the time to understand wills and inheritance, and as a consequence blindly ignore what Spaniards know in the mistaken belief that their foreign will protects them, or that they can register a foreign company to own their assets in Spain and never worry about inheritance tax.
This is dangerous thinking and has led to many dependants losing far more of their inheritance than they needed to, simply because the relative was too bloody minded to research their options for leaving assets to spouses and children before they passed away. In fact a family trust in the form of a Spanish company is possible, but only with foresight and the writing of a Spanish will. Chapters 7 and 8 of “Spanish Legal Property Information” should be considered a mandatory read.
Furthermore, the authors explain that it is possible under existing Spanish law to mitigate upto 95% of the inheritance tax payable upto the 120,000 euros if you were resident in Spain prior to dying. Given today’s depressed property values this amounts to a significant saving.
Whilst “Spanish Legal Property Information” should not be considered an exhaustive guide to property ownership, it is a worthwhile read for anyone considering or already owning property in Spain. It as also small enough that most readers will take on board the essentials in a very short time.
The ebook can be downloaded free from the Perez Legal Group website.