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FAQs
FREQUENTLY ASKED QUESTIONS (please note that these questions are answered on the basis of Spanish Law).
1.- What is a Power of Attorney? Why do I need one?
A Power of Attorney is a document by which the grantor (the person who grants the Power of Attorney) grants to another person named the Attorney a series of faculties so that the latter can act on behalf of the former. In this manner, it is understood that when the attorney carries out any act, he/she acts as the grantor would if he/she was present. The Power of Attorney can either be general or limited to one or more specific faculties.
For the Power of Attorney to have effects with regard to third parties, it must be granted before a Notary or civil servant who has sufficient capacities to authorize the document in accordance with their position. A Power of Attorney is necessary for the granting of certain documents such as the transmission of property or for the constitution of rights against property.
At the same time, a Power of Attorney is necessary for the filing of actions in the Courts unless the grantor appears himself/herself before the Court to expressly indicate who he/she wishes to represent his/her interests.
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2.- What is the The Hague Apostille?
The Treaty of the Hague, amongst others, came into being as an attempt
to do away with the requirement of the respective Consules having to
legalize foreign Public Documents.
In principle a foreign document doesn’t have any effects in Spain unless it has been duly legalized. However, the Treaty provides a procedure which gives the said foreign public documents legal effects in Spain by certifying their authenticity. This procedure consists in the signature of the civil servant being authenticated along with his position, the identity of the stamp which certifies the document and the standard model in accordance with which it is formalized.
The Apostille is not necessary if the document in question is granted by a foreign diplomat or consular official or if it has been stamped by a customs officer.
For the dispositions of the Treaty to be applicable with regard to the document in question, the country that has emitted the said document must have signed the Treaty. Up till 1996 these countries were Antigua and Barbuda, Argentina, Armenia, Australia, Austria, Bahamas, Belgium, Belize, Byelorussia, Bosnia Herzegovina, Botswana, Brunei Darussalam, Croatia, Cyprus, Germany, Fiji, Finland, Yugoslavia, France ,Greece, Hungary, Israel, Italy, Japan, Holland, Lesotho, Liechtenstein, Luxemburg, Malawi, Malta, Marshall Islands, Mauritius, Mexico, Norway, Panama, Portugal, Russia, Saint Kitts and Nevis, Seychelles, Slovenia, South Africa, Spain, Surinam, Swaziland, Switzerland, Tonga, Turkey, UK and Northern Ireland, USA and El Salvador.
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3.- How can I obtain the Apostille for a document?
The POA document, has to be granted and signed before a Notary Public in the UK. Once granted, this document will need to be forwarded to the Foreign Office in London in order to be affixed with an Apostille in accordance with the Hague Convention of 1961. Your Notary will have full details of this procedure.
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4.- What is the Land Registry Office? What purpose does it serve?
The Land Registry Office serves the purpose of registered all those acts and contracts with regard to the ownership and other rights that could be constituted against real estate. The said registration of acts and rights are made in the Land Registry Office of the area in which the actual property is situated.
For legal effects, it is presumed that all those rights that are registered in the Land Registry exist and belong to the owner in the manner determined by the content of the respective registration. At the same time, it is presumed that the persons who have the ownership registered in their favour also have the possession of the property or rights that are registered in their name.
Therefore, we could say that the Land Registry Office is a public office whose content is presumed to be known to all third parties and which has a fundamental importance as it is the registry where are all those rights of ownership and other rights that can be registered against a property are documented as long as these have been formalized in a public document or by virtue of any other document that is susceptible to be registered in the Land Registry.
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5.- What is a Public Notary?
Notaries exercise fully what is called “public
faith” with
regard to all those legal relationships arising from Private Law that
are constituted or declared without the necessity of judicial intervention.
The Notary gives “faith” by virtue of his intervention authorizing
the document and with regard to third parties, of the content of the
document and the date upon which it is granted. Any public deeds authorized
by a
Public Notary are then susceptible to be registered in the Land Registry.
The Notary, as a organ of what is called voluntary jurisdiction, cannot
act without the previous petition of an interested party except in
a few cases established by law.
Normally, individuals have the option to chose the Notary they wish
to use with the exception of those cases in which the State, a Province,
a Municipality or other entities that have a dependant relationship
with
these by Law are a party to the contract.
The jurisdiction of each Notary is limited to the Notarial District
within which the Notary’s Office is situated.
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6.- What is the so-called tax Form 211?
This form is a document which contains all the details regarding the fiscal
retention that is enforced against the price of sale that is received
upon the sale of a property and when the vendor of the property is not
a fiscal resident in Spain. From the 12st January 2007, the retention
to be made when a vendor is a non resident amounts to 3% of the total
value of the property. Prior to the 1st January 2007, the said retention
amounted to 5% of the price of sale of the property.
The retention made must be paid to the tax office within ONE MONTH from the date of the sale of the property. The form is equivalent to a receipt for the retention made and paid into the Tax Office on account of the non residents potential obligations for capital gains tax arising from the sale and later must be presented along with form 212.
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7.- What is Tax Form 212?
This form reflects the declaration of the capital gain arising from the
sale of property. In the form, all the details of the purchasers and
vendors are listed as well as the details of the account that the reimbursement
of any surplus tax is to be paid into, if any, and the actual calculations
of the capital gain itself.
This document must be presented along with form 211 or an equivalent receipt documenting the payment of the retention to the Tax Office, within a period of three months from the expiry of the period within which form 211 must be presented.
Form 212 reflects the possible capital gains tax arising from the sale of property and can reflect the necessity of making a payment to the Tax Office (if the retention does not cover the total liability for capital gains tax) or the right that the vendor has to a reimbursement from the Tax Office (if the retention is more than the ultimate capital gains tax liability).
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8.- What is capital gains tax?
This is not a local tax but a state imposed obligation that taxes those alterations of wealth that are produced as a consequence of the transmission of an asset, in this case the transmission of a property. When the person or entity that transmits the property is non resident in Spain and is resident in a country that has a Treaty subscribed with Spain relating to this subject, one has to follow the dispositions of the Treaty.
By sale, one can understand the effective transmission of the asset by sale, exchange, expropriation, donation etc... Because of this, for example, an accounting revaluation within a company would not constitute an increase of wealth.
As we have said, this tax is regulated by the State and is therefore totally different to those taxes explained above, such as the Plusvalía, that only tax the increase of value of the land.
This tax is calculated on the basis of the difference between the value of acquisition plus those expenditures such as improvements and deductible costs, and the value of sale. These values depend on the price agreed between the parties and it is the personal income of the person obliged to make payment that is taxed. In the case of a non resident the effective rate of tax is from the 1st January 2007, 18% (before then was 35%) of the profit although residents in Spain have a more favourable rate depending on the period of time that the property has been owned, the consideration of habitual residence or not of the property transmitted, and the benefits of reinvestment in another habitual residence.
For the calculation of the Capital Gain the period of ownership is taken into account as this determines which of the various coefficients are applied to the value of acquisition to “compensate” inflation from the time of the purchase.
As one can see, the owner of a property that is going to be sold has the obligation to pay the I.B.I. even in the year that he sells (although it is usual to agree a proportionate payment between vendor and purchaser), the Tax on the Increase of the Value of the Land (Plusvalía) if this exists in the municipality in which the land is situated, and also has to pay the tax that arises from the capital gain produced as a consequence of the sale of the property.
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9.- What is Impuesto sobre Bienes Inmuebles (General Rates)
This is a tax that is both direct and real (it is a tax on the property as such) attributed to the local Town Halls that taxes the property. The justification of the payment of the tax arises from the mere ownership of immovable assets that can be urban, rustic or of any other nature, as for example administrative concessions.
The consideration of immovable urban assets includes land even if it is classified as urbanisable land awaiting a development program, urban constructions, private buildings etc... Within the classification of rustic assets we can consider land that is not classified as urban land and those constructions that are built upon it.
The persons who are obliged to make the payment of the tax are those persons who are the owners of the rights upon the property. However, the property (whether it be the land or the house) is subject to the payment of the tax in the case of a transmission if the previous owner has not paid the tax due within the conditions laid down by law. Because of this, it is always advisable to ask the vendor for proof of payment of the last receipt of I.B.I. and check that the property is up to date in the payments for previous bills that as we have said come from the Town Hall, although in this area often paid through the company SUMA. The tax becomes due on the first day of the calendar year with independence of the fact that the property has been the object of a transmission and is paid annually.
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10.- What it is the Tax on the Increase of the Value of the Land (commonly known as Plusvalía).
This tax is again a direct tax of a non periodic nature whose rate is determined by the different Town Halls.
Although it is what is called a direct tax charged by the Town Hall, it differs from the I.B.I. in that it does not become due periodically.
The tax is charged on the increase of the value of those lands of an urban nature and becomes due as a consequence of a transmission of any title on the land (whether it be a sale, donation, inheritance etc…) or because of the constitution or transmission of real or limitative rights on the property.
This tax is only due when the assets are transmitted or sold, and the persons obliged to make payment are the following:
- In the case of a gratuitous transmission, for example, through donation or inheritance, the obligation falls on the person who acquires the asset.
- In the case of an onerous transmission, as for example a sale, the obligation falls on the vendor. If the vendor is a person or entity who does not hold residency in Spain, there is a subsidiary obligation with regard to the person who acquires the property in the case of the vendor not making payment. Because of this, it is always convenient in those cases in which the vendor is non resident to make sure that the effective payment of the tax is made, as if not, the Town Hall can eventually take action against the new owner to secure the payment of the tax.
The basis for the calculation of the tax consists of the increase of the value of urban land as a consequence of its transmission and can only be paid on the basis of a maximum period of twenty years. The actual value of acquisition and sale is determined by the Town Hall on the basis of the catastral value and therefore these values are independent to the values declared in the deed that documents the transmission, whether it be a deed of sale, of inheritance or of donation. The period within which payment has to be made is 30 days in the case of those transmissions between living persons and of six months that could be postponed for up to a year in the case of those acquisitions made by virtue of the death of the previous owner.
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11.- Driving License.
It has been approved a Royal Decree which introduces a new format of driving licence, which substitutes the current format that dates back to 1965. The new licence, similar to a credit card and with a size of 9 x 6 centimetres, will be progressively introduced, firstly to those new licences issued and to those that are renewed, although they will not be issued in case of loss or robbery. The first traffic departments to use this new format will be those of Córdoba and Asturias from the 2nd November 2004 and from the 10th January 2005 they will be issued in all the rest of the Autonomous Communities.
What should one do to renew a driving licence issued by a country member of the European Union?
Those driving licences issued by states that are members of the European Union, in accordance with the common applicable legislation, will be valid in Spain with the sole exception that the age required is that applicable in Spain for the licence in question. In the case of a normal car, that is 18 years of age.
Once the holder of a driving licence issued by a European Union member state has decided to take up residence in Spain, they are then able to ask for the corresponding Spanish licence if they submit the following paperwork;
- The corresponding form supplied by the provincial traffic authorities.
- A photocopy of their passport, N.I.E. number or Residence Card and the
original for the authorities to take an authorized copy.
- Two photographs measuring 35 x 25 mm.
- A declaration stating that they have not been judicially banned from
driving cars or motorcycles or had their original licence suspended.
- A declaration stating that they do not hold a similar driving licence
issued by any other country in the European Union or issued already in
Spain.
- The actual driving licence that one intends to change or a copy or photocopy
of the said document.
- Pay the established administrative fee of 16’60 euros.
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12.- Registration ( “Empadronamiento”)on the Municipal Census.
By “empadronamiento” we refer to one registering on the census of the Town Hall in which one has taken up permanent residence. This is an important aspect of everyday life and has a relevance regarding the payment of taxes, the right to vote in the local elections and for children’s education.
To actually register on the census, one must go to the corresponding Town Hall and ask for the inscription in the registry. To do so, one must present a copy of a rental contract, a title deed to a property or even a electricity contract along with a valid residence card or a passport in the case of nationals of a member of the European Union and a copy of the corresponding N.I.E number.
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13.- The concepts of inheritance and donation. The rules of International Law. The regulation of the territorial question. Wills
The concepts concerning
inheritance and donation are determined by the Spanish Civil Code in
accordance with which a donation is fundamentally
an act by which somebody gratuitously transmits something in favour of
another person. It is an act of transmission between two living persons
in which the receipt of the donated object does not imply any type of
payment in return.
Secondly, inheritance is the transmission of assets in favour of one
or more persons due to the death of the owner. This transmission of assets
by means of inheritance can be governed by the express wish of the deceased
in a Will or, in the absence of specific wishes stipulated by the deceased,
by legal dispositions. This leads to a distinction between what is called
testamentary inheritance and what is called forced or intestate inheritance.
The inheritance is comprised of all the assets, rights and obligations
of a person that are not extinguished by the death. Anybody can grant
a Will as long as the law does not expressly forbid them to do so. Therefore
and in accordance with Spanish law, neither children under the age of
14,
nor those persons who happen to be temporarily or permanently incapable
of granting a valid Will.
However, and despite what we have just said, the first thing that must
be done when one considers the question of inheritance is to ascertain
which is the correctly applicable legislation as to know the laws concerning
Spanish inheritance is not, in our opinion of great help to those persons
who do not hold Spanish nationality. Spanish Law is not relevant to their
rights and obligations and is solely applicable to the fiscal aspects
of those dispositions that could be made in a Will, or that could be
applicable
to those legal obligations imposed by the law applied in absence of a
Will.
The Spanish Civil Code in its article 9 establishes that the “personal” law
that governs each person is the legislation of the nationality that they
hold. By personal law one must understand the law that regulates the legal
capacity and the civil status of a person, the rights and obligations that
arise from the family unit and those questions regarding inheritance.
This means that the question of inheritance, as the transmission of the
assets of the deceased, whatever their nature and wherever they are situated,
is governed by the law of the nationality of the deceased at the moment
of their death.
However, those dispositions made in a Will or those testamentary agreements established in accordance with the national law of the person who granted the Will or the person who was the holder of the assets at the time of death will retain their validity even if another legislation is applicable to the actual succession although the forced inheritance will be governed by the latter.
In the case of a person holding double nationality one must consider those International Treaties that could be applicable and if nothing was determined by these the legislation of the country in which the deceased remained in permanent residence would be preferably applied.
From the point of view of Spanish Law, the determination of the applicable law is made in accordance with Spanish Law. Therefore when, for example, a situation is referred to a foreign legislation (whether it be to the English, French, American or German legislation etc…), it must be made to the material law applicable, that is the legislation that governs the situation in question in the relevant country without taking into consideration those rules known as rules of conflict that establish a deferment to another legislation that is not Spanish legislation.
This principle is of great importance as we take for granted that in the case of there being a valid Will in existence the testamentary dispositions are valid with regard to wherever the asset is situated and whichever nature that is has as long as they do not contradict those rules governing the rights arising from the forced inheritance.
To clarify what has been said above let us consider the following example:
Let’s suppose that a holder of German nationality who is the owner
of assets in Spain dies without granting a Will and, having lived in Spain,
had gone to live in France seven years ago. In principle, if this happened,
Spanish legislation would initially refer to the current German legislation
due to it being the personal law of the deceased. If the German legislation
referred the situation to the French legislation, then Spanish law would
not accept this, as it would only accept a deferment back to Spanish Law
if this was established in the German legislation. This principle is applicable
to all such cases whatever the nationality of the deceased. One further
point of interest with regard to these situations is that a Spanish Judge
does not have an obligation to be familiar with foreign legislations and
therefore the applicable legislation must be proved by the person who invokes
it.
Due to the above, it is clear that in the case of an inheritance, the applicable law is that of the nationality of the deceased, unless this legislation expressly defers its application in favour of the Spanish legislation. Accordingly, to give a detailed explanation of Spanish Inheritance Law would be of little interest to a foreign national as especially in the case of an English citizen, the applicable legislation would be English legislation whether they were residents in Spain or not, and whether or not the death occurred in Spanish territory or not. Although all the above is valid with regard to the material aspect of the law (that is those laws that govern the actual dispositions of a Will or the dispositions made by common law in the absence of a Will) the fiscal legislation applicable to the cases of the death of a person who held property in Spain will always be Spanish Fiscal Law with the sole exceptions of Greece, France and Sweden who signed Treaties with regard to these situations on the 6th March 1919, the 8th January 1963 and the 25th April 1963 respectively.
With exclusive regard to the payment of taxes, the first differentiation that must be made is based on the question of residency of the person liable to pay the tax. Those persons who are resident in Spain will pay tax on all the assets and rights that they acquire whether these are situated within or outside Spanish territory although in this last case there would be an allowance applicable to avoid situations of double taxation which will be studied in later articles.
A non resident in Spain will pay tax only on all those assets and rights that are situated within, or that could be executed within, Spanish territory.
Lastly, and with independence of the residency of the beneficiary, the
following acts will be taxed in Spain:
1.- The lucrative acquisition of assets situated in Spanish territory or
rights that can be executed in Spanish territory. Assets are considered
to be situated in Spanish territory in the following cases:
- Immovable assets and those movable assets that are permanently subject
to houses, rural properties and business’ situated in Spain even
if the movable assets are outside of Spain on a momentary or temporary
basis.
2.- The receipt of payments arising from a life insurance policy when
- The contract had been signed in Spain with any insurance company or
- When the insurance company was Spanish even if the contract was signed
outside of Spain.
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14.- Law applicable for spouses of different nationality
Upon the granting of the title deeds, which is the only instrument which can be registered in the Land Registry Office the Notary must ask for a information from the Land Registry Office so that he is aware of the ownership and situation of charges of the property. The same goes for the bank that grants the mortgage.
In this case, everything comes down to the matter of the civil status of the vendor and the applicable marital regime. This marital regime determines for example if a Swede, British national, German or any other foreign national would be able to sell real estate on their own, jointly with their spouse or with or without the consent of the spouse, the consideration that assets bought prior to the celebration of the marriage have, that is whether they are considered to be owned jointly or privately by the spouse who owned them prior to the marriage.
The answer to these questions, and to that of your query, is determined by the applicable marital regime in these circumstances. In accordance with the Spanish Civil Code the effects of a marriage are governed by:
1.- By the Common Personal Law of the spouses at the moment of the celebration
of the marriage vows.
2.- In the absence of a common personal law, by the personal law of either
of the spouses or by the personal law of the country in which they have
taken residence indicated by a Public Document granted prior to the celebration
of the marriage.
3.- In the absence of either of the first two indications, by the personal
law of their country of residence immediately after the celebration of
the marriage. By habitual residence it is understood the place in which
they live as a family with independence of whether they are registered
on a census or not.
4.- Finally, and in the case of not having a common residence, by the personal
law of the country in which the marriage was celebrated.
One interesting point is that when one purchases an asset, the Notary could solely reflect the marital regime that the grantors of the deed state that they are married in accordance with. The problem arises when the deed arrives in the Land Registry Office as it is the registrar who ultimately is responsible for the proper qualification of the deed and therefore it is the Land Registry who would ask for clarification of this question if it was thought necessary.
To resolve your problem, if the vendor is Swedish and his wife is also Swedish, one would have to consult Swedish Law to determine what is established with regard to assets owned by one of the subsequent spouses prior to the marriage. The Notary when he grants the deed, solely gives what in Spanish Law is called Public Faith, however it is the Registrar who actually authorizes the registration of the title and from what you say in your letter it would seem that Swedish Law would require the consent of the vendor’s wife for him to legally complete the transaction and for the deed to be registered in the Land Registry. If this was the case it would seem that you would need to file a legal action against the vendor if he was not willing to rectify the deed granted in your favour, or you could consider trying to ascertain a personal liability from those other professionals who intervened in the transaction. At the same time, the Bank is faced with a problem as until the deed of purchase is registered the Registrar will not proceed to register the mortgage.
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15.- New rules regarding Inheritance and Donation
Tax for the Valencian Community.
Due to the importance of the matter referred to above, we would like to
take this opportunity to look at some of the modifications introduced
by Law 10/2006 26th December which is applicable exclusively within the
Valencian Community.
In accordance with article 16 of the aforementioned Law:
“The following cases will be eligible to obtain an exemption of 99% tax bill for Inheritance and Donation Tax:
- Those “mortis causa” acquisitions made by relatives of the deceased who belong to groups I and II of article 20 of Law 29/87 that regulates Inheritance and Donation Tax, WHO ARE RESIDENT IN THE VALENCIAN COMMUNITY AT THE TIME AT WHICH THE TAX BECOMES DUE.
Groups I and II referred to in the said Law include descendants and adopted descendants, spouses, ascendants and adoptive parents of all ages.
- Those “mortis causa” acquisitions made by physical or sensorial impaired persons who have a rate of incapacity of more than 65% or by mentally impaired persons who have a rate of incapacity of 33% or more.
- With a limit of 420.000 euros, those “inter vivos” acquisitions (donations) made by children, adopted children, parents and adoptive parents of the donor who have a pre-existing patrimony of up to 2.000.000 euros and WHO ARE RESIDENT IN THE VALENCIAN COMMUNITY AT THE TIME AT WHICH THE TAX BECOMES DUE.
With regard to the limit of the exemption, all those donations made by
the donor during the five years immediately before the date of payment
of the tax will be taken into account. By date of payment of the tax,
it is understood the realization of the act by which tax becomes due,
that is either the date of the death of the deceased or the date upon
which the donation was made.
However having said the above, the exemption will not be applicable in the following cases:
“When the person who transmits the assets had had the right to the exemption in the transmission of the same assets or others up to an equivalent value, on the same day or during a ten year period prior to the payment of tax.”
For the purpose of calculating the aforesaid equivalent value in the donation of different assets, and the value of each individual asset donated, all those donations made in favour of one beneficiary during the period of ten years will be take into account.
In the case of various donations made by virtue of one individual legal act, it is understood that the following rules will be used to determine which asset was transferred first:
i.- In the case of transmissions made vertically between descendants and
ascendants, the donation made in favour of the descendants.
ii.- In the case that the transmissions where solely made vertically in
favour of descendants, the transmission made in favour of the oldest beneficiary
of the donation. iii.- In the case that the transmission was made in favour
of ascendants, the transmission in favour of the youngest beneficiary of
the donation.
To these effects, it is understood that the parents or adoptive parents, with independence of their actual age, belong to an older generation than their children or adopted children and in this manner successively in both ascendant and descendant lines.
For the application of the exemption, it is necessary that the acquisition is made by virtue of a public document (deed granted before a Public Notary).
Finally, those acquisitions by donation made in favour of physically or sensorially impaired persons with a rate of incapacity of 65% or more or in favour of mentally impaired persons with a rate of incapacity of 33% or more and that are children, adopted children, parents or adoptive parents of the donor will also be eligible for the same exemption.
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16.- When is the payment of V.A.T. due?
As a general rule the payment of V.A.T. is due;
a) In the case of the sale of goods or assets, upon their effective receipt
by the purchaser or in accordance with the specific legislation applicable.
b) In the case of services, when the said service is either carried out
or executed or upon the completion of the taxable operation.
Which different rates of V.A.T. exist?
From the 1st January 1995, the following rates of V.A.T. are applicable:
I.- 16% General Rate of V.A.T.: This is applicable to all those operations that are not specifically taxed at a different rate.
II.- 7% : This the so called reduced rate of V.A.T. which is applicable to, amongst others, the following operations;
i.- The purchase of new buildings or parts of these which are susceptible to be used as dwellings including parking spaces (up to a maximum of two) and other parts of the building as long as these are transmitted jointly along with the dwelling. However, the transmission of commercial premises would be taxed at a rate of 16% V.A.T. even if they are transmitted jointly along with buildings or parts of buildings that are used for residential purposes.
ii.- The building or rehabilitation of buildings or parts of buildings including attached premises, garages, installations and complementary services as long as the following requirements are fulfilled:
a) That the operation entails the execution of a building with or without
the supplying of materials.
b) That the construction work is a consequence of a contract between the
developer and the contractor.
c) That the construction is to be used with a primordially residential
use.
iii.-) Minor building work which fulfils the following requirements;
a) That the work is carried out on properties used by individuals who
are not acting as professionals.
b) That the completion of the property or the refurbishment of the property
was finalized at least two years prior to the subsequent building work.
c) That the person who actually carries out the building work does not
provide the materials or that, in the case that these are provided, their
cost does not exceed 20% of the total cost of the operation.
III.- 4% Super-reduced Rate : The following operations are worth noting;
- The sale by the developer of properties classified as “Properties of Special Protection” (housing built with the first time purchaser in mind …) or those that have been publicly promoted (by the authorities) as well as a maximum of two parking spaces or garages and those complementary parts of the building that are transmitted at the same time.
Another important point is that there is a legal incompatibility between
transmission tax and V.A.T. Therefore, those properties that have been
taxed with V.A.T. cannot also be taxed with Transmission Tax as a transaction
cannot be taxed twice. However, having said the above, if a transaction
is exempt from taxation under the V.A.T. legislation, it can be taxed
by Transmission Tax. An example of this is the common case of the resale
of properties between individuals.
Who is obliged to pay the V.A.T. ?
Upon the transmission of assets and rights or all nature, the purchaser
is obliged to pay the V.A.T.
Upon the constitution of a lease the tenant, although exceptionally if
the first payment of rent has been paid and the tenant has not paid the
tax the landlord can have a subsidiary liability.
Upon the constitution of a pension the beneficiary of the pension and upon
the constitution of an administrative concession the beneficiary of the
concession.
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17.- The New ValencianPlanning Law
On the 1st February 2006 the new Valencian Planning Law (Ley 16/2005 30th December) came into force substituting the much criticized LRAU. The new law has been drafted with the supposed intention of rectifying the many defects of the previous legislation although in a broad sense in our opinion there has not been a great deal of change.
One of the most obvious changes is the volume of legislation that is contained in the new Law and due to this it would be practically impossible to comment on the whole law in one article. However we will try to explain some of the fundamental differences of content between the new legislation and the previous legislation that it has substituted.
In first place we will explain the different types of land that are regulated in the new legislation as, in accordance with the classification of the land, the actual owners will have a different set of rights and obligations. The law established three different types of land which are the following;
Urban Land:
On this class of land the owner has the right to build due to the fact that it has been developed. The law differentiates between the following;
1.- “Solares”/ Urban Plots: A “solar” is a plot of land that has been legally divided and developed in accordance with the criteria established by the local planning bye-laws. For a plot to considered as a “solar” it must at least fulfil the following requirements:
- It must be accessible by a asphalted road which must be open to public
use in adequate conditions with regard to all the roads that is it accessed
from.
- It must have a supply of drinking water and electricity sufficient to
provide an adequate supply of the said utilities for the volume of building
that is foreseen.
- It must have a sewerage network connected to the mains unless the local
planning bye-laws make provision exceptionally for other systems such as
septic tanks.
- It must have pedestrian access with pavements and street lighting from
at least one of the streets that give access to the plot.
2.- Urban Nucleus’ : Those areas that, although they cannot be considered as “solares” do have at least an access, a supply of water and electricity and a sewerage network sufficient for the use that is foreseen.
Urbanizable Land
The land classified as urbanizable land is considered as suitable to be developed (and thus would give the right to the owners to build upon it). The classification of land as urbanizable by the Local Planning Bye-Laws of each Town Hall merely means that the land is suitable to be built on once it has been developed. The development of these plots is carried out by virtue of development projects contemplating more than two plots simultaneously by which the land giving the land a connection to the existing mains networks.
The development of land that is classified as urbanizable also implies for the owner the obligation to cede in favour of the Town Hall land for public services and the payment of the corresponding costs of urbanization in proportion to the ultimate “benefit” (how much one can build) that each owner stands to gain from the development of the land. This obligation, previously established in the old legislation, has provided the main source of the criticism levelled at the old LRAU.
In response to this, the new Law has a specific chapter referring to matters
of valuation although it does refer largely to the existing national legislation.
The owner of land that does not wish to contribute to the costs of development
can chose to renounce the benefits that the proposed development would
entail, insisting at the same time to be compensated for the rights that
would have corresponded to their property at the time of the start of the
procedure. The amount of compensation must be established by the local
Administration prior to a technical valuation based on objective criteria
suitable to determine the real value of the property. The owner at the
same time can also make a proposal with regard to the valuation.
Non Urbanizable Land
This type of land is governed by its own specific legislation dating back to December 2004 which reserves this land from the possibility of being developed.