Before reforming a home, you need to be clear about your budget and the type of work that you are going to be doing. A general distinction is made between a superficial change and a structural change.
A technical architect would be required for major renovations; our architects from the I-VEO team can ensure compliance with the applicable regulations and the required type of permit depending on the scope of the renovation. These building permits are requested from the municipality and, depending on the type of reform, various documents must be collected and submitted.
The different types of permits are:
- The notified repair: minor repairs
- The minor building permit: works that do not affect the structure of the house.
- The major building permit: permit for works that may affect the structure and that require a technical project.
If a work permit is not requested at the time of a reform, the city council opens an administrative act that can lead to various sanctions such as the cessation of work, an economic sanction and, in extreme cases, the abandonment of the work carried out in a manner illegal.
The building, installation and works tax (ICIO), “impuesto sobre construcciones, instalaciones y obras”, is usually added to the permit. It is an optional tax that corresponds to the municipality; the realization within the municipality of construction, installation or work for which a building or town planning permit is required is taxable, usually they fluctuate around 4% of the total budget of reforms.
Deductions of up to 60% for home renovation
The Spanish government's plan de recuperación y resiliencia (plan de recuperación y resiliencia) contains a number of tax measures to encourage the implementation of housing renovation measures. Up to 60% of the income tax (IRPF) is deducted when renovating a home if it helps improve the energy efficiency of ordinary homes. The deductions are as follows:
- 20% when carrying out certain work that reduces at least 7% of the heating and cooling needs of the house.
- 40% to those who reduce the consumption of non-renewable primary energy by 30%, creditable through the energy certificate.
- Receive 60% for renovation work that contributes to improving the energy efficiency of residential buildings, provided that the consumption of non-renewable primary energy is reduced by at least 30% or the energy efficiency of the building is improved to an energy class A or B.
Our I-VEO experts will be happy to answer any further questions you may have.
The Spanish government passed a law in 2013 to encourage foreigners to invest in Spain for residential purposes. This visa, called "Golden Visa", is open to anyone who invests more than € 500,000 in real estate in Spain. It gives you the right to reside, work and travel within the European Schengen area in Spain.
What are the requirements to get a GOLDEN VISA through a real estate investment?
- The investment must be made in full (without financing for the first € 500,000.00)
- Can include several properties and can be rented
- Investors buy a property and only then apply for a residence permit.
- The visa enables you to work in Spain
- Benefit from Spanish residence and the freedom to travel to other Schengen countries (90 days out of 180)
- During this time, properties can be bought and sold as long as the investment is preserved.
- There is no entitlement to public health care, the holder must provide evidence of private health insurance
- Have no criminal record
- There is no obligation to spend a minimum of time in Spain to maintain and renew the visa
The period of validity of the visa is:
- 365 days if the purchase has already been formalized.
- 6 months if the purchase has not yet been formalized but a preliminary contract with a guarantee of its fulfillment has been formalized by a deposit or otherwise in a public deed
The supporting documentation is:
A) When the purchase has been formalized
- Certification with continuous indication of the domain and fees from the real estate register that correspond to the property or properties.
- If the acquisition of the property is in the entry in the land register at the time of the visa application, it is sufficient to present the aforementioned certificate in which the entry is valid for the submission of the purchase document. This also includes proof of payment of the relevant taxes.
- The applicant must prove that he has a fee-free and encumbered investment in a property in the amount of 500,000 euros.
- You can apply for permanent residence after five years and Spanish citizenship after 10 years if you actually lived in Spain during this period (after obtaining permanent residence, it is no longer necessary to keep the investment amount)
B) If the purchase has not yet been formalized
- Pre-guarantee contract together with a certificate from a financial institution based in Spain confirming that the applicant has an unavailable bank deposit in the amount necessary to acquire the property or properties indicated in it in order to fulfill the promised contract , including fees and taxes.
-> The spouse accompanying the main applicant or a close person with a similar affective relationship must submit an independent application for a visa for the family stay of an entrepreneur and the notarized marriage certificate translated with the "Hague Apostille".
-> The children accompanying the main applicant must submit a separate application for a visa for the family stay of an entrepreneur and the certified birth certificate with the "Hague Apostille".
For further information please contact us, our I-VEO real estate consultants will be happy to assist you.
A) THE HERITAGE
Without going into the details of the inheritance law regulated in the Civil Code in Book III, we are interested in what happens when a property in Spain is inherited.
First of all, a distinction must be made between the division and acceptance of an inheritance:
- ACCEPTING AN INHERITANCE is a free and voluntary act by which a person called to inheritance expresses his willingness to accept an inheritance.
- THE GRANT OF AN INHERITANCE is the act by which the heirs who have accepted the inheritance divide the property by acquiring their property.
If the matter is clear and easy to distribute, the corresponding taxes are settled in Spain and the changes are made in the land registry for a property.
B) SELLING A PROPERTY WITH CO-OWNERSHIP
If an indivisible property is inherited between several heirs, it is not uncommon for conflicts to arise in the division of assets.
In the event that money or other assets are present, compensation for the transfer of the property could be sought. If not, in order to be able to sell a property with multiple owners, the consent of all is required, otherwise the sale is valid.
Thus, a property cannot be sold if one of the heirs does not agree to it.
If co-ownership of the property cannot be avoided and one of the heirs wants to sell the property, you can do the following:
- Sell your part of the property to the remaining heirs or to third parties. The other heirs have a privilege to this undivided participation by paying the sales price. If you would like more information on the subject, we will present it to you in another article on the right of first refusal.
- All heirs agree that you can consult a mediator before the judicial process to find an appropriate solution for all interests.
- If the heirs do not agree, the judicial process remains at the end and you can request the termination of the co-ownership of the inheritance and the public auction of the property in accordance with Spanish Law 15/2015. An appraisal of the property is requested and then it is auctioned.
The other co-owners can take part in the auction in order to bid on it. The disadvantage is that if the property is auctioned together, the hammer price can be below the market price.
In summary, it can be said that in these inheritance cases, an agreement is always made between the heirs in order to avoid bad times and costs (lawyer, appraiser, court proceedings, ...). In addition, it should be noted that the sale of a property through public auctions is usually at a lower price than it would be sold on the market.
C) INHERITANCE FROM NON RESIDENTS IN SPAIN
If a property is inherited in Spain and the inheritance is not resident in Spain, these inheritances are regulated by the European Regulation 650/2012 on inheritance and the creation of the European Certificate of Inheritance. A non-resident foreigner inheriting a property in Spain must keep in mind that they will have to pay inheritance tax in Spain and local capital gains tax. Please note that it is only taxed on goods in Spain, not on foreign goods.
The applicable regulations vary depending on where you live:
- Residents within the European Union: The rules of the Autonomous Community, in which the deceased has the most assets, apply.
- Residents of other countries: the applicable regulation is the state one.
For further information, our I-VEO lawyers can advise you on the handling of your inheritance.
Hidden vices, "vicios ocultos", are defects that are not perceived with the naked eye and you are not aware of them until a while after the purchase. According to the Pan-Hispanic Dictionary of Legal Spanish, Hidden defects of the thing existing at the time of acquisition that make it inappropriate for use by that it is intended or that they diminish this use in such a way that, if the buyer had known about it, he would not have acquired it or would have given a lower price for it “Defectos ocultos de la cosa existentes al tiempo de la adquisición que la hacen impropia para el uso a que se la destina o que disminuyen de tal modo este uso que, de haberlos conocido el comprador, no la habría adquirido o habría dado menos precio por ella”. This is also interpreted by the Civil Code in its article 1484.
In other words, the acquired home is not in the conditions that the seller had informed the buyer before making the purchase: there are a series of defects of such severity that they prevent the use or full use of an asset, in such a way To know its existence, the buyer would not have acquired the good.
They could be, for example, leaks, dampness, cracks, fissures, faulty finishes, etc. defects that exist before the sale with a certain severity and that are not easily detectable by the buyer with the naked eye. But the courts have on numerous occasions dismissed the hidden defects action when the buyer had experience in the "real estate" or construction world.
In summary: 1) That the defect is serious, 2) Be of sufficient importance so that if the home buyer had known about it, they would not have bought the property or would have paid a lower price for it, 3) That the defect is pre-existing to the sale.
It may happen that the defects that the property presents are of such an entity that they suppose the delivery of a different thing. In this case, through the action derived from the delivery of "one thing for another", the buyer can terminate the contract of sale and also demand the corresponding compensation for damages. The term to exercise the action is five years.
How can hidden defects be claimed?
According to article 1846 of the Civil Code, the buyer will have two options:
1. The redhibitory action: The resolution of the contract that allows for breach of the seller. The seller is obliged to reimburse the buyer for the expenses incurred. In this case, if the seller knew of the existence of hidden defects, the buyer will be compensated for damages.
2. The quanti minoris action: A proportional reduction due to the defects of the property. In this way, the buyer will be able to modify the content of the contract, in relation to the price paid, as a consequence of the loss of a certain value of the good acquired.
What is the deadline to claim?
The term to carry out, in second-hand homes, any of these two actions is six months from the date on which the property was delivered. For new homes the term is two years.
What has to be done?
The procedure to follow will be as follows:
1. Assess the nature of the damage and discern if the cause is a construction defect or if, instead, it is due to improper use attributable to the buyer. For this, it is necessary to request a report from a qualified technician, either an architect or technical architect.
2. The seller must be notified in writing of the situation detected and the damage caused. In this writing, the date of the contract and the term established to solve them must be indicated.
3. If the seller accepts the claim, the solution will be simple and fast. However, on many occasions the seller objects. In this case, it is best to go to the mediation office, that is, to the Official College of Surveyors and Architects, which may mediate between both parties, in order to avoid trial.
If a satisfactory solution has not been achieved in the previous steps, a judicial process must be initiated, so that the Courts decide who will be responsible for the pertinent reparation. At this time it is essential, in order to be successful in the claim, to have gathered evidence that reliably proves that the hidden defect existed before the purchase of the property.
In the event that hidden defects appear after the end of the period established by the Civil Code to be able to claim, there is the possibility of a civil liability policy that makes the difference between the structural elements, installations and finishes.
For any questions, our I-VEO real estate experts will be at your disposal.
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