We  see that you and your husband had a property in Spain, inside our area of influence, that you owned 50 % each.

 We see also that you husband did not have any Spanish or UK Will to cover the inheritance disposal of the Spanish assets.

 In this case, we have to inform you that  the following step now is to start the intestacy process in Spain, in order to complete the changes of the ownership on your name only. This process must be done in consideration of the calculation, declaration, and payment Spanish Inheritance Tax, and must be done and complete before 6 months after the date of the decease (although an extension can be applied if necessary). After 6 months penalties and interest of delay will be derived.

 Now, what you have to do is contracting the services of an specialist to guide you and advice  you in this process.

 For this, and before quoting you the expenses of the process, we can give you a more approximate overview of the case if you provide us with the following information:

 - Copy of the deeds of the Spanish property

- Copy of the last Council Tax bill

- Copy of the NIE from both of you

- Copy of the Padron (if the case)

- Copy of the Certificate of Residence (if the case)

- Copy of the death certificate

In addition to this, we need to know the following:

 - Did your husband had any other assets like cars, bank accounts, etc, in Spain?. If the last case, indicate the amounts in banks account.

- Do you have children?, How many?, How old are they?

- Was your husband got married with you as first marriage, or had he any other previous marriages?, please, indicate if he had other children from other marriages? (apologies for these personal questions, but I am sure you will understand we need this information to deal with the case).

- Were you and your husband living in Spain or in UK? .

 Once I receive the above mentioned information we will be in the position to have a better knowledge of the case, and I will send you an individualized report of the case, showing you the different alternatives and the right process to complete the Spanish inheritance of your husband.

But, what’s the real position of the agents by the Spanish laws?.

AN EXAMPLE:  When the buyer pull out the sale without “reasonable arguments”, the seller can cancel the contract, keeping the amounts already handed over by the buyer.

 This amount is considered, and must be used, as a “compensation” for the damages caused to the vendor for the breach of contract from the buyer.

 In this case, one of the expenses the vendor has to pay, is the agent’s commission. In Spain, the agents have rights to collect their fees in the moment in which buyer and seller agrees in written the terms of the sale, in the proper contract.

We can say, out of the general  that their function is to get the “legal agreement” between both parts, and they are not responsible of the “good end” of the transaction. They complete their commercial function in the moment in which they find a property for the buyer, and a buyer for the vendor.

 But, is quite common that the agents are not paid, or are not totally paid, till completion. This is a common practice, but the thing is that their rights are acquired in the same moment of the signing of the contracts.

 If there is a breach of the contract from the buyer or the vendor, then this must be out of the commercial responsibility of the agent, and, for this, out of his control. As result, his commission must be paid. The way in which they collect their services is with the amount obtained by one of the parts as compensation of damages from the other part’s breach.

Being buyer, or seller, try to keep this into account when contracting the services of an Spanish agent.

Example: 

- You bought the property 10 years ago, and there was an exisiting house of 100 m2.

- You have built an extra room in your property 7 years ago, of 15m2,  and you did not declared it in Catastro.

During the 10 years you have been using the property, the Council Tax is calculated with the exisiting database in Catastro, whcih is a house of 100 m2. For example, 300 EUR / year

But now, due to the fact that you have decided to update the Catastro with the existing room (usually by the process of Declaracion de Obra Nueva, and with architect plans and certifications), the Catastro can make revision of the Council Tax in this way:

- For a construction of 100 m2, you paid 300 EUR/year.

- For a construction of 115 m2 (100 m2 house+15 m2 extra room) you had to pay 450 EUR / year.

Catastro can be then charge you 150 EUR difference of this estimation till the last 4 years after the declaration of the room.

The extra payment to Catastro can be then: 150 EUR x 4 years = 600 EUR.

Usually, these kind of updates in Catastro use to appear when the property is being to be sold or bought. So, please, pay attention being the seller or the purchaser to this very important matter.

In selling of properties, sellers use to leave update of the properties till completion. It is really common that owners of properties do not update their property records each time they make an extension in the property, like a garage, an extra room, etc. They leave the declaration of such extensions to the same moment of completion. And this is right.

The problem here is that, the buyers, when seller is not resident,  must make a retention to  vendors to cover the  eventual updates and revisions the Council Tax office could make on the previous 4 years before completion.

Is really normal that buyers they do not retain to sellers for this concept when sellers present the Council Tax receipts showing the current year is paid. But, buyers should pay attention incase the vendor has updated the deeds on completion declaring previous extensions in the property. In these cases, even if the vendor presents the Council Tax payment for the current year, there will be high possibilities to recieve an extra payment for the difference of valuations as explained above in the future.

Ask your Solicitor to organize the proper retentions to the seller to avoid these situations.

 Answer: In order to give permission to your brother to deal with your mother intestate (no Will), your brother needs a Power of Attorney from you to legally act on your behalf in this way.

 This Power of Attorney (POA) is a legal document that can be signed in:

 -       Any of the Spanish Consulates in UK

-       An UK notary (Solicitor is not valid).

 In this last case, the POA:

4.- Once the document has the Apostile, must be translated into Spanish by an official translator.

 If the POA is obtained in the Spanish Consulate, it will not be necessary to translate it, neither to get the Apostile, since it would be redacted and formalized in a public Spanish institution.

Also, if you contract our services, we will make all the translation service, Apostile and others, saving you expenses in this process, and the time to get all these requirements sorted.

 In addition to this, please, pay attention in that you and your brother must have the NIE number to complete the inheritance. This is a number which identifies you to the Spanish Tax Authorities. Is issued by the National Police . The number is necessary for practically any transaction in Spain, such as paying taxes, opening a Bank Account, buying a property or car, or the arrangement of a mortgage, or, as in this case, to form part of an inheritance and pay the Spanish Inheritance Tax.

You can obtain this number in one of the following ways:

-       In any of the Spanish Consulates in UK

-       Directly, and in person (POA is not valid), in a National Police Station in which the inheritance is being developed.

 Click in the following link for more info: http://www.spanishsolicitors.com/what-is-a-n-i-e-number/

So, TLACORP has decided to resume the most Frequently Asked Questions to received from our clients:

From when the new VAT modification is in application?

The reduction of the VAT to the 4 % in new porperties is in application from the 20th of August 2011.

This reduction is not definitive, and will be valid only till the 1st of January 2012, when, if not extended, the VAT will return to the initial 8%.

Partial payments made before the reduction of the application. Is  necessary to modify the invoices?

No, invoices for partial payments on account of the final price made before the 20th of August 2011 must be kept on the 8 %. So, these invoices must not be modified.

Invoices dated on or after 20th of August must be include the reduction at 4% till this reduction is in force.

Will this reduction affect to re-sale properties?

Re-sales are not taxed with VAT. They are taxed with another different tax called ITP (Transfer Tax). So, the reduction does not affect resales, as general rule.

This reduction, affects only to permanent residences, or also to Holiday Homes?

This reduction is to ALL type of new properties, independently of the use from the purchasers. So, also acquisitions of holiday homes will be included in the reduction, and will be taxed at 4%. In fact, if in the acquisition of the property, are included garages, or parcking, it will be also taxed at 4%.

In other words: NIE number is required to apply for the mortgage, so, the process cannot start without it.

It was common in the past that buyers were obtaining their NIE just before completion. It was relatively comfortable because they could leave this step to be done at the end of the process, just organizing their visit to Spain a couple of  days before completion, in order to have enough time to get this document for the sale. Buyers could, meanwhile, applying and processing their mortgages, because NIE was not required from banks till completion.

But, now, as banks are requiring the NIE number to start the application of their mortgages, buyers who did not obtain this document in their previous visit to Spain, they must come expressly just to get this document.

Another option is to try to obtain the NIE in the Spanish Consulates placed in their countries of origin, but this way uses to take long time. So, these buyers are now forced to come to Spain just to obtain their NIE numbers to be able to apply for their mortgages.

TLA recommends buyers that, when coming to Spain to visit properties in which they could  be eventually interested, to make the best use of this visit to obtaining the NIE numbers. They could obtain assistance from the local agents, or from their lawyers, about how to get them, and to have this step sorted in this first visit. This will avoid problems in the forward steps of the process.

For more information, please, do not hesitate to contact us, we will be delighted to help you.

Banks like CAM bank, La Caixa, Solbank, Bankinter, BBVA, Santander, Popular, Caja Murcia, etc, are now the biggest real estate agents, and the owners of the majority of the properties in the Spanish market.

Due the current financial situation in the difficult Spanish property market, banks are forced now to sale the properties repossessed with very low and  interesting prices.

So, during the last year, the number of buyers interested in these kind of properties has increased drastically.

Properties coming from bank’s repossessions must be studied carefully, and with special attention in points that, usually, buyers do not pay attention, due to the fact that they think these properties have all the guaranties as coming from a bank. THIS IS NOT ALWAYS TRUE.

TLACORP lawyers, with more than 8 years in the Spanish market, and with 5 years in repossession activities with some of the most important banks, we have to say that these kind of transactions must be studied carefully, due to the fact that : BANKS DO NOT OFFER THEIR PROPERTIES WITH ALL THE LEGALITIES AND GUARANTIES.

Our services would start making a previous legal checking of the property, the land, and the construction of the property (checking the legal and the administrative situation of the estate). For this, we apply for the information about the property in the Town Hall where the property is placed, talking to architects and inspectors of the area. The reason of this is to obtain an exact legal situation of the property for construction, licenses, building permits, etc. With this, we will guaranty our clients that there will not be any actions, like fines, demolition applications, etc., in the public institutions regarding any eventual illegal construction, or work over the building.  

To make a complete study of the property is especially important in repossessed properties from banks.

 Purchase of a property is a very serious investment. In fact, one of the most important decisions in the life. It is compulsory then to know exactly the different aspects of the property, what we call: The History of the property. Knowing from the beginning  how the property was built, how it is considered now, and how it will be in the future with the eventual developments in the area will make secure the high efforts and the investments derived from the acquisition of the property. Only specialist in properties, with expertise acknowledge of the area, can confirm to you this information to give you completely peace of mind.

 We are a company expert in construction and real estate with more than 8 years experience in the area. Our clients, they have bought their properties and enjoyed them without problems for years.

Our TLACORP recomendation: DO NOT LEAVE THE BANK TO SELL YOU A REPOSSESSION WITHOUT THE LEGAL AND EXPERTISE ADVICE OF AN SPECIALIST.