IBI – IMPUESTO SOBRE BIENES INMUEBLES.

This is an annual municipal tax that everyone is required to pay, regardless of whether they are residents or not. The amount of tax varies depending on the value of the property. It is calculated based on the assessed value of the home. In the province of Alicante, IBI is paid through a company called SUMA. It is common to pay IBI via direct debit in the bank (Domiciliación bancaria).

TAX FOR NON-RESIDENT PROPERTY OWNERS

Read more HERE

RECOGIDA DE RESIDUOS SÓLIDOS – Municipal waste collection fee for rubbish

As the name suggests, this is a fee for the removal of rubbish. The amount of the fee and the payment deadline vary from municipality to municipality.

COMUNIDAD – COMMON EXPENSES

When you live in a co-ownership in an urbanisation or in a block of flats, you must pay your share of the common expenses. The amount of the fee varies depending on which services are included in the joint ownership’s responsibilities. The fee is calculated based on the square metres of each property, as well as each property’s percentage share of the common area.

INSURANCE

There are countless insurance companies in Spain. Not all of them have case managers who speak languages other than Spanish. Our advice is to use an insurance agent with whom you can communicate. You should read the insurance terms and conditions to see what is covered and what is excluded. Some companies require you to notify them if your home is unoccupied for more than 30 days or if it is rented out. If you have items that are individually high in value, most companies require that this be specified in the policy in order for it to be covered. Be careful not to be underinsured. If you have stated too low a value, the compensation will be correspondingly low in the event of damage. If you own a property in a co-ownership, please note that the co-ownership’s insurance does not cover damage within your walls. Your insurance must cover your liability to third parties, for example if a water leak damages your neighbour’s apartment. When taking out insurance, the agent and the company are just as important, if not more so, than the price itself.

When you sell a property and are not resident in Spain for tax purposes, the buyer is required by law to withhold 3% of the sale price and pay this to the Spanish tax authorities as an advance on the seller’s capital gains tax. This is a guarantee for the tax authorities that the tax will be paid.

If you sell at a loss, you can apply to have the amount refunded. The deadline for such an application is 3 months after the tax has been paid. However, if you have sold at a profit, you are obliged to settle with the tax authorities after the sale.

What can you deduct?

The gain is calculated on the basis of what the property cost when you bought it and how much you sold it for. You can deduct costs in connection with the purchase (e.g. tax, notary and property registry fees) and costs associated with the sale (e.g. estate agent’s fees and lawyer). You can also deduct some costs for upgrading the property. Note that original invoices issued in the seller’s name must be presented.

If the sale does not result in any gain, or if the gain is less than 3% of the sales price, the seller can apply for a refund of the amount paid. The requirement is that the seller has complied with their tax obligations to Spain.

It is everyone’s duty to familiarize themselves with the legal rules that apply where they have bought a property. You can’t use as an excuse that you’re a foreigner and didn’t know what rules applied as an excuse.

PLUSVALIA

In addition to the capital gains tax, the seller is obliged to pay a municipal tax on the increase in value of the property. This tax is known as “plusvalia” and varies from municipality to municipality.

It is the municipality that calculates this tax, but the estate agent will be able to estimate it for you if he has all the necessary information.

Good luck with your sale. If you need help – contact us.

Owning a property in Spain entails a series of expenses that go beyond the purchase price. These include taxes, notary fees, registry fees, gestoría, and possible mortgage and maintenance costs. Total costs can vary significantly depending on the location, the type of property (new or used) and the value of the property.

IBI (Real Estate Tax).

Real Estate Tax is a direct tax of a real nature levied on the value of real estate, the taxable event of which is constituted by the ownership of rustic, urban or special real estate located in the respective municipal district, of an administrative concession on the real estate itself or on the public services to which it is attached, or of a surface right, or of a real right of usufruct, or of the right of ownership.
*** Translated with www.DeepL.com/Translator (free version) ***

In the province of Alicante, IBI is paid through SUMA.

Es habitual pagar el IBI mediante domiciliación bancaria.

If you do not have a direct debit bill and you have received an IBI payment notice by post, you can pay by card on the SUMA website. You can also visit your nearest SUMA office and pay by card.

Municipal solid waste tax

As the name suggests, this is a fee for the removal of waste. The amount and deadline for payment vary from municipality to municipality.

The tax rate will consist of a fixed amount, per unit of premises or per building use, which will be determined according to the nature and purpose of the properties.

Tax for non-resident owners

Click HERE for more information.

Community of owners

A community of owners, also known as a community of neighbours, is the legal entity that groups together the owners of dwellings or premises in a building or residential complex. Its main function is to manage and maintain the common areas, such as staircases, lifts, gardens, etc. This community is governed by the Horizontal Property Law and, in some cases, by its own statutes.

Owners are obliged to contribute to the maintenance and upkeep of the common areas, according to their share of ownership. They must also respect the established rules of coexistence and allow access to their dwellings to carry out necessary works in the common areas.

Home insurance

There are countless insurance companies in Spain. We recommend that you contact an insurance agent who speaks your language and with whom you can communicate.

Read the general conditions of the insurance to see what is covered and what is excluded. Some companies require notification if the home is unoccupied for more than 30 days or if it is rented. If you have items that individually have a high value, most require this to be specified in the policy to be covered.

It is crucial to ensure that the value for which an asset is insured is equal to or greater than its actual value. Underinsurance occurs when the value declared in the policy is lower than the actual value of the insured property, which can lead to underinsurance in the event of a claim.

When taking out insurance, the agent and the company are as important, if not more important, than the price itself.

Current expenditure

Price of electricity:

The price of electricity in the regulated market (PVPC) varies according to supply and demand, and is set by the hour. You can check the price of electricity per hour on sites such as Naturgy. You can also find information about the cheapest electricity companies on sites such as Papernest.

Water:

You should contact the local council to find out who the water supplier is: whether it is the local council itself, or a public or private water management company.

Gas:

For further details on gas distribution in Spain, please refer to the following link: How to find out who my gas supplier is – Nedgia. Compare and choose the gas tariff that best suits your needs.

The tax is paid annually, and the deadline is 31 December. It can be reported at any time during the calendar year. If you have not owned the property for the entire year, or if the property has been rented out for part of the year, the tax is calculated based on the number of days.

If you rent out your property in Spain, you are obliged to pay tax on the rental income.

It is your own responsibility

There are no procedures for sending reminders to non-resident homeowners, and you will not necessarily receive a notice that you owe tax, as it is your own responsibility to ensure that all taxes are paid.
If you haven’t paid this tax, you may receive a claim from the tax office demanding the tax and penalty tax for overdue years.

Please note that all outstanding taxes must be settled before you sell property in Spain.
On the day of sale, 3% of the sale price must be paid to the tax office as capital gains tax. If you have sold at a loss, you can apply for a refund. Refunds are subject to you having fulfilled your tax obligations to Spain.

Filing your tax return in Spain does not have to be difficult. We do it for you and sign the tax return electronically. The tax will then be debited from your account automatically by the tax office (Hacienda) at the end of the year. You will receive a receipt and a copy by email.

We can help you with your taxes – contact us.

Simple and straightforward.

There will be a bit more than 10% in costs on top of the price the buyer has to pay. Take this into account when setting your budget.

The price stated on the property is not what it will cost you. If you’re buying a second-hand property, expect to pay just over 10% of the cost on top. If it’s a brand new property, it will cost you a little more.

ITP

Property Transfer Tax. For the transfer of used homes, the tax is 10%.

IVA

If you buy a brand new home, the government will charge 10% VAT (IVA) on the purchase.

AJD

Impuesto de Actos Juridicos Documentados. This is a document duty paid on transactions subject to VAT, such as new homes. The duty is 1.5%.

Notary fees and property registration fees

The fee varies depending on the price of the property you are purchasing.

What expenses will I incur as a homeowner?

IBI

This is an annual municipal property tax. Rates vary between municipalities.

Home insurance

Don’t focus solely on the prize. Having an agent you can talk to is invaluable and can make a big difference when something happens.

Tax for non-residents

If you own a property in Spain, you are required to submit a tax return for non-residents. One tax return must be submitted per owner and per property – every year. The deadline for submitting the tax return is 31 December of the year following the tax year. You will not receive a bill or notification that it must be paid. It is your responsibility to follow up and ensure that this is done.

And, of course, ongoing expenses for electricity, water, possibly gas and internet.

Not only do they have national holidays, but also regional and local celebrations. Shops and public offices close, and decorations are put up. Spaniards take their fiestas very seriously, and there may be parades and fireworks, music and dancing. It is well worth experiencing a fiesta when you are in Spain.

But what are they actually celebrating?

January 6th is Three Kings Day, celebrated with parades and gifts for children. The celebration of this day in Alcoy is considered the oldest in the world.

In the Valencia region, they celebrate St. Joseph’s Day on 19 March.

The day is in honour of Jesus’ adoptive father, Joseph, who was a carpenter by trade and is considered the patron saint of carpenters.

This day has been celebrated in Catholic countries since the Middle Ages, and is possibly the precursor to Father’s Day. Joseph is the patron saint of fathers and is seen as a role model for a good father.

St. Joseph’s Day also marks the end of Las Fallas in Valencia. It is believed that Las Fallas originated when carpenters cleared their workshops of scrap wood and waste, which they set alight on the night before St. Joseph’s Day.

On 15 August, the Assumption of the Virgin Mary is celebrated.

This day was also marked in the Nordic countries during the Catholic era with a special symbol on the primstav, which is a framed cross. On this day, people prayed to the Virgin Mary that there would be no bad harvest. The day was called the Assumption of Mary.

On 9 October

celebrates the reconquest of the Valencia region from the Moors in 1238. King Jaime I founded the Kingdom of Valencia, which today comprises the Comunidad Valenciana (Alicante, Castellón and Valencia).

The day is celebrated with large processions and parades, where people dress up as Christians and Moors.

12 October – Hispanic Heritage Day

is the day on which Christopher Columbus is believed to have landed on the island of Hispaniola, and in 1987 Spain declared this a national holiday.

In Madrid, the day is usually celebrated with a military parade attended by the king and representatives from the government.

1 November

The Spanish commemorate their dead and decorate their graves with flowers. It is a typical day when families gather together.

On 6 December, Spain celebrates its Constitution Day.

After the death of dictator Francisco Franco in 1978, the current constitution was drafted and approved.

For Spaniards, this is the very symbol of the divide between nearly 40 years of totalitarian rule and a government based on freedom and democracy.

After the National Assembly had approved a draft constitution, a referendum was held on 6 December, and the constitution was approved.

There is no big celebration of the day where people dress up in national costumes and hang up flags. For most people, this is just a welcome day off.

On 8 December, we celebrate the Immaculate Conception.

This is a dogma of the Catholic Church that was decided in 1854, claiming that the Virgin Mary was free from original sin.

The history is actually much older, dating back to 1476 when the day off was introduced by Pope Sixtus IV.

In the current Catholic calendar, this day is called “The Immaculate Conception of the Virgin Mary” and is a mandatory holiday for all Catholics.

The birth of Jesus is celebrated on 25 December.

History tells us that Emperor Constantine the Great set the celebration of Jesus’ birth on this day, which coincided with the Romans’ celebration of Sol Invictus.

The birth of Jesus is celebrated close to the shortest day of the year, while the birth of John the Baptist is celebrated on 24 June, close to the longest day of the year.

After Jesus’ birth, the days become longer and longer, while after John the Baptist’s birth, the days become shorter and shorter in anticipation of Jesus’ birth.

When a normal working day falls between two days off or public holidays, many Spaniards take this day off. This is called a “puente”.

“Felices Fiestas”

[Photo: © pixabay and internet]

We constantly hear about people who say they took their car to a garage to have it scrapped, but still find themselves being charged road tax. To the owner’s despair, it turns out that the car has not been scrapped. Or that they have sold the car cheaply to a neighbour and continue to receive road tax bills, or even worse – receive fines. It turns out that the buyer has not registered the car in their name.

Scrapping – documentation

Spain has a good system of approved scrap dealers (CATV – Centros Autorizados de Tratamientos de Vehículos), who take care of scrapping and deregistration.

If the car is not in running condition, they will pick it up with a tow truck.

You must be in possession of the car’s original documents, as well as a copy of your NIE and passport.

The paperwork for deregistration is signed on site, or electronically if they collect the car from you.

Important documents

The authorised centre must provide you with proof that the car has been scrapped and deregistered. With these documents, you can prove that you no longer own or are responsible for the car.

The municipality will not charge you road tax the following year, but if an error occurs, you can present the proof from the authorised scrap dealer. The same applies if the insurance company tries to charge you the premium after your car has been scrapped.

In some cases, the scrap dealer may pay you for the wreck.

The insurance

Don’t forget to cancel your insurance.

Insurance companies do not usually refund anything for the period during which you do not need insurance if you scrap your car. However, if you insure a new car with the same company, they may compensate you for the amount you are owed.

Contact us if you have an old car you want to scrap – we can help you.

The will is registered immediately after signing at the Notary. The testator is only given an unsigned copy. The signed copy is placed in the Notary Public’s archive and is released upon application to the will registry upon submission of the testator’s death certificate.

If you wish to draw up a will, please contact us.

If you are not a tax resident, 3% of the deed value will be withheld and paid to the tax office. If you have sold at a loss and complied with your tax obligations, you can apply to have this refunded. However, if you have made a profit, the capital gains tax in the Valencia region is 19%, and any difference must be paid.

If you are a tax resident over the age of 65 and have lived in the property as your permanent residence for more than three years, different rules apply. We recommend that you contact a professional advisor and tax expert to protect your interests.
If you have a mortgage on your property, check with your bank to find out how much it will cost to pay off the loan and delete it from the property register.

Finally, the seller must present a valid energy certificate (and in some places an updated occupancy certificate is required) before going to the notary to transfer ownership.

So, the seller must pay:

• Real estate agencies fee
• Tax to the municipality
• Capital gains tax
• Cancellation of loans and deletion of encumbrances in the property register (if there is a loan)
• 3% withholding tax if the seller is not a tax resident
• Energy certification
• Valid occupancy certificate (not required everywhere)

Regardless of whether you are selling privately or using a real estate agent, we recommend that you use a lawyer with insight into Spanish property and tax law to protect your interests. The cost is low compared to the price of the property, and it is an insurance to avoid problems after the change of ownership.

Many people dream of a life in Spain, not only pensioners, but also younger families who want to live in a warmer climate.

The first thing you need to decide is whether to rent or buy. If you only intend to stay in Spain for a year, it is not profitable to buy because the costs are relatively high. In the Valencia region, the transfer tax is 10% of the purchase price. In addition to this, there are notary fees and registration fees.

Spain is divided into 17 regions with autonomy in many areas. Please note that tax rates vary between regions.

The buying process in Spain differs from the UK in several respects.

In Spain, the same property may be listed for sale by several estate agents.

Once you have found a property that meets all your requirements, you should first check that the legal and financial conditions are in order. A “nota simple” from the property register will tell you who owns the property. It will also provide information about the property’s boundaries and any encumbrances.

Not all encumbrances appear on the “nota imple”, for example unpaid property tax or shared costs for joint ownership.

If the property is part of a co-ownership, we recommend that you request the statutes of association and minutes from the last general meeting, which will include the co-ownership’s budget. Before the title is transferred, the co-ownership’s manager must provide confirmation that the property is up to date with its shared expenses and provide information about any planned major repairs.

Before signing the reservation contract or purchase contract, a registration “nota simple” should be available.

Usually, you first sign a reservation contract where the buyer pays a deposit of €3,000 to take the property off the market. The next step is to sign the actual purchase contract. You then pay the difference so that you have paid a total of 10% of the purchase price.

All contracts are in Spanish and governed by Spanish law, even if you have a translation.

We recommend to use a lawyer when buying property in Spain. Very few buyers are in a position to assess the risks and problems that may arise in connection with the purchase of real estate in Spain.

Buying a property in Spain is different from buying a property in UK. In addition, questions often arise regarding taxes, inheritance and other legal matters.

With the right advisors and helpers, everything related to buying a home will be safe and easy.

Read more about the costs here

If you have any questions or require assistance, please call +47 46517901 or + 34 646435700. If you prefer to contact us by email, please write to: marit@dinhjelper.com