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The Spanish Lawyer Online
The Spanish Lawyer Online

Antonio Flores’ Blog

Thoughts about laws and regulations which affect foreigners in Spain


Archive for May, 2011

Spanish Tax Office Perverts Truth to Raise More Taxes on Property Transactions

May 28th, 2011

About to wind down for the weekend, yesterday evening I received an email from Alexandra Goss, personal finance reporter for the Sunday Times, in relation to a few enquiries sent by Spanish property buyers, and sellers, that were unexpectedly receiving letters from the Spanish tax office challenging the prices at which they had bought, and sold, their properties in Spain, respectively.

Indeed, one thing came to her mind considering the state the Socialist Government has left Spain in: the Spanish Tax Office (AEAT) is desperate for revenue and are finding avenues to levy extra demands for transfer tax from property buyers, and so, if the Spanish property market was not an already depressed sector of Spanish economy, they now come, as real predators, to make it even harder for people to buy, and sell.

This is the real paradox of it all: the Spanish Interior Minister flies out to England to do his silly property-selling road show, and in Spain, those buyers get shafted by the Inland Revenue his Government controls. The good thing? That courts are, mostly, not contaminated with the wrong ideology and will employ reasoning and logic to counteract this property-buying prevention scheme, and will mostly, again, throw out of court these extra tax demands.

What should one do if one receives one of these letters, after of course all the understandable cursing and imprecating? Well, go get a lawyer that knows his stuff and appeal within the stipulated timeframe, by choosing one of the 2 legally available avenues:

  1. Challenge the “unreasoned”, “standardized” valuations made by the tax office that happen to be nothing else than some formulas being applied on unknown coefficients by a computer program that pumps out wholly impossible valuations (a 2-bedroom flat on a 200-unit empty development in Manilva worth €280,000?). The funny thing about this is that University graduates sign off these valuations, knowing that they are essentially wrong and untrue (land registrars in most of Andalusia are in charge of the Transfer Tax collection, and/or “arquitectos tecnicos” employed by the Andalusian Government, the same graduates that think that the property is twice as expensive!).This is what the courts in Spain think about these predatory extra tax demands:
    • Supreme Court 14th December 1998: The valuation carried out by the architect for the Tax Office is a standardized printed form full of scant references that have the weight of an opinion rather than that of a property valuation, and therefore one cannot assume it has any reasoning or justifiable criteria, losing its legally binding effect.
    • Economical Administrative Tribunal 20-06-1995: The legal mandate granted to the Tax Office to raise supplementary tax demand fails due to the Tax Office not following a logical process when arriving at property values but rather by using abstract figures when calculating these. Also, the Tax Office fails to properly provide a valuation when they simply perform arithmetical calculations on the basis of a unitary basic module, without reasoning or justification, and certainly can never comply with the law when to this value or figure, a stereotyped all-purpose text is added on as reasoning. (Tantamount to calling the “arquitecto tecnico” a dumbass).
  2. Carry out a proper valuation by a proper “arquitecto técnico”, or as they don’t like to be called, “aparejador”, who will surely determine that the property’s real value is either the price you paid for or sold it for, or perhaps less, and submit it, hoping that the “arquitecto tecnico” working for the Tax Office will abide by the norms of ethics of their profession and admit to being wrong. Because the funny thing here is that, depending on whether these university graduates work for you, or the Tax Office, their opinion of what the quoted property is worth will be €140,000 or €280,000, respectively. It´s funny, certainly, but it is also very worrying.

This subject matter is very very interesting, and so expect some interesting, and surprising, developments very soon, including a legal suit against the Andalusian Tax Office.

Anyhow, check tomorrow the Money Section in the Sunday Times, I am quoted there.

Property, Taxes , ,

Getting Divorced in Spain Discussed on Talk Radio’s Life At Five with Allan Tee

May 18th, 2011

For those of you interested, I will be today around 4.20 PM on the Life At Five with Allan Tee Show on Talk Radio Europe, to explain the ins and outs of the divorce procedure in Spain.

You can tune in directly through their website (internet stream), or through the FM frequency assigned in your area.


Family Law

Zapatero: Fool Me Once, Shame on You; Fool me Twice, Shame on Me!

May 17th, 2011

Spanish Minister Jose Blanco, “Pepiño” as he is known to his closer aides, has made a right fool of himself, again, by traveling to the United Kingdom with a bag full of unsold substandard properties that are unlikely to find buyers in the next 5 years, unless, of course, prices are slashed by at least half.

What he was not expecting the outrage among representatives of thousands of people who have not had their properties built (and deposits returned), or have had licenses on new properties revoked, demolition orders passed (in a number of cases, well-deserved), supplementary tax requests filed by the regional tax offices and a few other property-buying prevention measures applied by the Socialist authorities.

The only good thing, I suppose, is that thanks to the suffering inflicted on thousands of Brits (and Spaniards, French etc.) who bought a few years ago, we can say that one can safely trod through the Spanish property-legality minefield because all explosive artifacts have been identified and defused.

There still seem to be doubts in respect of the bona fide buyer, or good-faith-third-party buyer that buys a property, and the license of subsequently declared illegal. Well, according to the Spanish Supreme Court, in a recent ruling (December 2010) that quotes similar resolutions, anyone buying a property that has its original license revoked, is not protected by the reliance placed on the records of the land registry.

The reason is, according to the Magistrates, that the protection dispensed by the registry is only applicable to rights acquired in good faith and with good title, even if the previous one is declared void, and it is not therefore applicable to vices or defects appertaining to the object being transferred, so that if a license has to be declared null and void by application of the laws, then the new buyer “subrogates” the position of the prior owner and will be obliged to sustain the consequence the law envisages (and we all think about demolition here). Luckily though, most real estate professionals now know full well what is kosher and is meant to stay like that, or being legal could be potentially declared illegal (rural properties, mostly).

And so, what is the recourse for anyone caught up in the above situation then? The Supreme Court leaves the door open to file an action requesting compensation, from the Spanish State, if it was proved that the owner was a victim of a defective application of administrative decisions (typically, the grant of a license declared illegal later).

And what about the missing bank guarantees on failed developments? This is probably the hottest of topics (or potatoes), alongside the stupid retrospective coastal laws approved by our Socialist Business-Killer Government (soon to be ousted, thank God!). In relation to this topic, I have to admit that, even though I do not agree with some of Keith Rule’s antics, particularly the blind endorsement of a particular law firm, he has demonstrated that there is substance behind his proposal.


Justice Finally Done on Timeshare Resale Scam

May 10th, 2011

Acting on behalf of over 160 claimants (of a total of 290), Lawbird, in conjunction with the Prosecutor and other accusing lawyers, has secured prison sentences for 10 individuals acussed of masterminding the largest timeshare resale scam ever to hit the Costa del Sol. A further 8 are on the run and a ninth passed away.

The agreement was almost inevitable given the particulars of a complex case that, lasting more than 10 years, would have been downplayed due to the mitigating effect of the abnormal judicial delay in administering justice. In the end, all of the accused individuals have agreed to prison sentences that, due to an pre-agreed reduction (under 2 years) , will not see them spend time as an Alhaurin prison immate for illicit association and swindle by theft.

W. Prinsloo, a man of frail appearance deemed the gang´s ideological beacon, was absent due to having died some years earlier. He had also been accused possessing an unlicensed gun, a .22 rimfire pistol, that would have made him not eligible for a suspended sentence. Being familiar with handguns as a licensed owner (I too have a .22, and a 9 mm., plus a .357), we have better places to store them rather than, well, in his “office” desk drawer, as Prinsloo did…

The ruling also obliges the convicted conmen to repay over half a million Euros, as civil liability compensation, within a period of 2 years.

And what about Argentinian conman Fabian Marcelo Ramirez, a man who is still cold-calling hundreds in spite of having being arrested 4 times? I do hope that he now sees that his moment is coming.


Litigation, Property, Scams , , , , , ,

Supreme Court Wants More Equality in Spanish Divorces

May 9th, 2011

It has left us all wondering how come a ruling clearly favouring men has not been used, as a political weapon, by the sectarian feminist brigade and in fact, has gone almost unnoticed. The reason? Because the deciding magistrate was a woman.

I am talking about the latest Supreme Court decision that rules that divorcees will both pay the mortgage on the existing home in proportion to their share of ownership. So, whereas before the mortgage was deemed to be part of the monthly payment the better off divorcee (or separated spouse) had to pay the worst off, thereby being shared in accordance to their earnings (the appealing ex-husband was paying 80 per cent), it is now considered to be a debt generated by the spousal financial agreement, signed prior to marriage, and thus shared equally.

Most opinions I’ve listened to coincide in one thing: this new trend will help ease off the strain recent case law has created in couples in respect to the perceived advantages women got when divorcing, in a seemingly endless gender struggle. This subject, always susceptible to being interpreted by male extremists as  the price to pay for living in a country famed for domestic abuse/violence (one would be surprised though to know what statistics published in other countries say) will no doubt be debated thoroughly in the months to come, if new similar rulings see the light, in particular one seen as the “war of sexes time bomb”: the shared children custody.

Family Law, Litigation , , , , ,