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Reduction of VAT on purchases of properties directly from the developer (2011-2012)

In the second part of 2011 the previous socialist government of Spain decided to reduce the 8 % VAT to be paid as tax on the acquisition of a property DIRECTLY FROM THE DEVELOPER to only 4 %, in order to help selling the stock of ready built but not yet sold properties. This reduction has been extended by the new government of Spain (Partido Popular) for such purchases until the end of 2012. Therefore, and as explained in detail in our section "PROPERTY PURCHASE" under the menu "REAL ESTATE IN SPAIN" the one off initial purchase costs of newly built properties are at least 4 % less during this time than the ones for resale properties. Whether this economic measure of the Government will be extended after the end of 2012 is not known so far.

NIE numbers cannot be applied for by power of attorney any more (February 2012)

The identification number N.I.E.= Número de Identificación de Extranjeros, which is necessary to be able to purchase a property in Spain, pay taxes, etc., as explained under "PROPERTY PURCHASE" in the section "REAL ESTATE IN SPAIN" since approximately the beginning of February 2012 CANNOT BE APPLIED FOR any more through giving somebody POWER OF ATTORNEY to carry out the paperwork. The person who applies for it has to appear in front of the local Spanish National Police Station.

To carry this paperwork out by power of attorney and with a notarized copy of the passport was possible before, but is now not any more acceptable by the National Police. It is therefore very important that all parties involved in a purchase/sale of a property, have to come personally to Spain to apply for the N.I.E. number. We do not need more than one morning for this paperwork, yet the person has to appear at the Spanish National Police Station. The only exception they may accept is if somebody is extremely ill and cannot travel, but that needs to be proven. The N.I.E. number can also be applied for at the Spanish Embassy or Consulate of your Country, but as we were told by the Notary here in Spain, this procedure takes a long time and many more papers are requested than when applying for the number in Spain.

Please take into consideration that vendors have to have an N.I.E. number as well, even if it was not yet necessary when they purchased. In case they are married and do not expressively have the separation of goods, but community of goods, the wife / husband has to sign to allow for a sale as well, even if she/ he did not appear in the purchase deed. This means that this person also needs to apply for an N.I.E. number.

Revision of the Cadastral Values in different towns (2011-2012)

Please be aware that during 2011 and 2012 in several towns of the Costa del Sol the Cadastral Values of the properties have been revised and normally increased. This affects the urban rates receipt (IBI), as the IBI-Tax is paid as a percentage on the cadastral value, so that it can increase.

In addition the cadastral value also affects the fiscal value of the property (explained in the section "REAL ESTATE IN SPAIN" under " PROPERTY PURCHASE"). It is important that you take into consideration that when you purchase a property the acquisition tax is to be paid on the fiscal value, if it happens to be higher than the actual purchase price in the title deed.

Another way the new cadastral value affects is in the Spanish Income Tax Declaration for the Property (RENTA), as explained in the section " REAL ESTATE IN SPAIN" under the part of "PROPERTY PURCHASE" that explains the yearly running costs of a property. The tax is calculated on the basis of the cadastral value, therefore may experience increase if the cadastral value will be risen.

Owners will receive a letter informing them about the new cadastral value established for their property and having a certain time frame to protest against it, if they consider the change not to be fair or correct. We recommend property owners to make sure they have somebody looking periodically through their mail box, whether such important letters from the Town Hall may have arrived.

First letters of the Tax Ministry to property owners who have sold their property and who have not paid their RENTA-tax in the previous 5 years (beginning of 2012)

We have had notice of the first letters having been sent out by the Tax Ministry to Non-Residents who have sold their properties and where the Tax Ministry, has seen in their files that for those properties the RENTA-tax for NON-RESIDENTS has not been paid in the past years. The Tax Ministry grants the possibility to pay the pending tax now without any penalty yet, but we do not know how much more the control there will be in the future and whether penalties and interest rates may be charged for the amounts that were not declared in due time (explained under "REAL ESTATE IN SPAIN" in the section "PROPERTY PURCHASE" and the sub title "Yearly running costs of a property").

We know that many owners know about the obligation to have to pay this tax, nevertheless they do not do so, as the Tax Ministry up to now is not sending out any letters and has also not taken any steps to sanction and control the non-payment. But we always inform our clients about this obligation and would recommend paying the tax every year, in order not to get into problems if the Tax Ministry broadens the control of this payment. The above mentioned letters are a first step to stop the non-payment of this tax Non-Residents have to pay in their Spanish Tax Declaration once a year.

Aftersales service of Real Time Realty

Although we have not especially mentioned it yet under "ABOUT US" and in the description of our services, we would like to draw your attention to the fact that for us a sale of a property is naturally not "completed" once we have been at the Notary.

We are more than happy to help our customers in organizing the decoration and furnishing of their new property, in organizing any repair, painting or reform work they may want to carry out in their property. We have always been doing this since 1994 and therefore know trustworthy workmen, building companies, architects, etc., and competitive shops and stores where you can find very good value for money. We also work closely together with different interior design companies, all of them offering a great service, in the way that when you come back to Spain everything will be ready for you to relax and enjoy your new home under the sun.

Please never hesitate to contact us for any kind of necessity or wish you may have. We are always here for you and have been for our customers since 1994. You will never be "alone" on the Costa del Sol.