If you buy a property in Andalusia in the remainder of 2021, you will pay less tax as a buyer. Those who are in the process of buying a property at the moment, will see that taxes for property purchases have reduced. On Tuesday 27 April, the Junta de Andalusia unexpectedly and urgently approved a decree that reduces the ITP transfer tax and stamp duty (AJD) for the rest of the year 2021.
The aim of the regulation is to stimulate the real estate market for the purchase of homes in 2021, by reducing the fiscal costs for homebuyers in Andalusia. And by doing so boost the real estate sector, which has also been greatly affected by the pandemic caused by COVID-19.
What is the saving on taxes for property purchases (second-hand real estate)?
A fixed ITP transfer tax rate of 7% will be introduced instead of 8%. Likewise, the tax brackets of 9% and 10% will be abolished. These were applicable to purchases that exceeded EUR 400,000 and EUR 700,000 respectively. The 7% ITP becomes the fixed and only tax rate regardless of the purchase price.
In other words, purchases with a high price will have a larger tax saving, as the market of second-hand luxury homes benefits the most from this tax reduction in 2021.
What are the tax savings for new or off-plan purchases?
For these purchases, the reduction is much lower, as the purchase of a property off-plan is taxed through VAT (IVA) of 10% and through the stamp duty tax (AJD), with a tax rate of 1.5%. With the reform, the AJD goes from 1.5% to 1.2%, with buyers or investors of new homes benefiting the least from this reform.
This is important, as in areas of Andalusia such as Malaga and in general along the Costa del Sol, off-plan or new build property sales represent a very important part of the property market, especially amongst buyers from countries such as England, France, Belgium, Holland, Sweden…etc.
When does it come into effect and until when does it apply?
This reduction came into effect on Wednesday the 28th of April and all purchases made after this date will benefit from this tax reduction. But pay attention when buying, because this rule will only be in force until the 31st of December 2021. This means that on the 1st of January 2022 buyers will pay the same taxes as they paid before.
Recommendation for saving on taxes for property purchases in Andalusia
If you look for a property to buy in Andalusia or are in the process of buying a property in Andalusia, make sure to discuss the tax savings that can be made by completing the sale in 2021 with your lawyer or solicitor, in case you are interested in speeding up the process.
Author: Gustavo Calero Monereo, lawyer at C&D Solicitors, Torrox (Malaga)
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Spanish Inheritance tax (succession tax) in Andalusia
Are you a resident or homeowner in Spain and did you ever wonder about Spanish Inheritance Tax? Whether you maybe own a house and other assets or are thinking about buying property in Spain as an investment, this information could be useful to you.
I’m going to try to clear up some common doubts and make several example calculations so that you understand how this tax works in Spain and its current rates in Andalusia.
As a law firm specializing in providing legal and fiscal advice to foreigners in Andalusia, we’ve encountered certain unpleasant situations in inheritance processes with clients. These cases had a large financial impact from inheritance tax (succession rights) and some of them could have been avoided with the right fiscal advice and preparation.
1. Be careful with Spain! Every region has a different Spanish inheritance tax
The big difference in terms of paying more or less inheritance tax in Spain depends on the autonomous community where you reside, as they each have different regulations, with very different tax rates.
If you’re worried about how much inheritance tax an heir will pay, you need to know the benefits available in the autonomous community where you have your assets or where you’re thinking of buying a home.
2. Yes, that’s right. Non-residents in Spain pay the same Inheritance Tax as residents
There is an obligation to pay Inheritance Tax in Spain when a person inherits any asset located within Spanish territory, irrespective of whether they are resident in Spain. Since the judgments rendered in Spain in 2018, residents and non-residents, whether they are EU citizens or not, are subject to the same regulations in terms of Inheritance Tax in Spain.
In other words, if you’re an expat or reside in your country of origin, this will make no difference in terms of the tax to be paid compared to what someone resident in Spain would pay.
Be careful! You should not confuse Inheritance Tax payable in Spain with the law governing the Spanish inheritance process and the law of obligatory heirs in the Spanish Succession Law. If you want to know what this means, please watch C&D Solicitors´ video:
3. Who collects the Spanish Inheritance Tax for non-residents?
The only difference between residents and non-residents is the administrative body in charge of collecting the tax. If you’re resident in Spain, the administrative authority to collect this tax will be the autonomous community where you reside but, if you’re a non-resident, this will be the non-resident department of the central administrative Tax Office in Madrid.
However, even if you’re non-resident and inherit a property in Malaga, for instance, and you declare this tax to the Treasury in Madrid, you can still benefit from Andalusian tax regulations, which is why non-resident heirs in Spain pay the same as residents.
4. What is the most expensive Inheritance Tax region in Spain?
Andalusia is currently one of the regions in Spain where the lowest inheritance and gift tax rates for direct relatives of the deceased are applied, due to the tax bonuses and exemptions introduced in the last few years. Cantabria and Galicia are two other communities with the lowest Inheritance Tax rates in Spain, along with Madrid, Extremadura and Murcia. However, communities such as Asturias, Castilla y Leon and Valencia have very high rates of Succession Tax.
Nevertheless, these changes haven’t affected all groups of heirs and it continues to be a very expensive tax for some distant relatives, as well as for heirs with no official family relationship to the deceased.
So, if you for example are thinking of investing your money in buying a house for a tourist rental in Spain, in terms of succession tax the Costa del Sol (Andalusia) is much more attractive than the Costa Blanca (Alicante).
5. How is the succession tax calculated for a Spanish estate?
The rate of this tax is progressive, according to the value of the estate, i.e. the higher the value of the assets, the higher Inheritance Tax becomes.
Inheritance tax to pay in Spain by the heirs
Likewise, to the result obtained when applying the scale for this tax, multiplication coefficients are applied, which may increase the amount due under this tax. According to the degree of relationship and the pre-existing assets of the heirs, this coefficient may be higher or lower.
The lower the degree of relationship to the deceased and the greater the assets of the heir, the higher Inheritance Tax becomes.
Descendants or (adopted) children, as well as spouses and ascendants. This means that children, husbands/wives, grandchildren and parents pay the least inheritance tax in Spain. These are relatives classified into groups I and II under the Tax.
It should be noted that the tax benefits existing for direct relatives are very different depending on the autonomous community where the assets are located or where they live and reside, as each autonomous community has its own regulations. Differences in Inheritance Tax rates in Spain are enormous!
7. How much Spanish inheritance Tax is paid by close relatives in Andalusia?
This group of heirs is included in groups I and II and they can apply a reduction due to kinship of up to 1,000,000 euros per heir in Inheritance Tax. If each of them inherits less than that amount, no Inheritance Tax will be due.
For heirs to apply this reduction in Andalusia, their own assets prior to inheriting cannot exceed 1,000,000 euros either. Without a doubt, in Andalusia, widowed spouses and children pay much less Inheritance Tax than in other autonomous communities in Spain, which has resulted in an appreciable drop in tax collection from this tax in Andalusia.
8. Which heirs pay the most SuccessionTax in Spain?
Persons related collaterally in the 2nd and 3rd-degree family, such as siblings, nephews, nieces and brothers– and sisters-in-law, as well as other more distant relatives such as cousins, great-uncles, great-aunts and strangers.
Without a doubt, these are the heirs that pay the highest Inheritance Tax rates in Spain and they’re classified under groups III and IV of the Tax. In Andalusia and other Autonomous Communities, this group of heirs aren’t the exception and pay a very high rate of inheritance tax.
9. How much tax is due for inheriting the usual property in Andalusia?
If you’re in groups I and II, unless the home is worth over 1,000,000 euros, you would pay nothing. But if the heir is in group III, such as a sibling, uncle, aunt, nephew, niece, or in-law, living with the deceased for at least the two years prior to the death occurring, a bonus worth 95% to 100% of the value of the home is applied. In the latter case, the home must be kept for 3 years following the death.
There are other discounts in Andalusia, such as heirs with disabilities, the acquisition of a sole proprietorship and farms.
10. What is the deadline to pay Inheritance Tax?
The deadline is 6 months after the date of death and, if it remains unpaid, the tax administration may initiate proceedings to claim payment of the tax, with the ability to impose penalties. However, if there are justifiable reasons, it is possible to request an extension of 6 additional months and this application must be filed within 5 months of the death.
After four and a half years from the date of death, the government cannot require payment of this tax. In this case, the tax would be zero due to it being time-barred.
EXAMPLES: Spanish Inheritance tax calculator in Andalusia
Dutch siblings Frank and Mark inherit their father’s property in Almuñécar, appraised at 300,000 euros. In this case, the answer is clear, each of them would pay zero in Inheritance Tax.
Now siblings Frank and Mark inherit their older brother Jan’s property in Fuengirola, appraised at 300,000 euros. In this case, each would inherit 50% of the property, appraised at 150,000 euros. The only bonus that they may apply is for the first 7,993.46 euros, for which reason each of them would pay the Treasury an amount of €31,393.56
Lastly, siblings Frank and Mark inherit their friend Martin’s property in Marbella, appraised at 300,000 euros. In this case, each would inherit 50% of the property, appraised at 150,000 euros. No reduction can be applied in this case, for which reason they would pay taxes on the entire amount received, resulting in a payment of €42,523.07 from each.
Final note: How does the Spanish Inheritance and Gift Tax affect the property market?
If you’re thinking about buying a home in Spain and you’ve read everything we’ve explained above, you’ve probably realized that Inheritance and Gift Tax have a significant influence on the property market in Spain and the choice of the autonomous community to settle in.
Excessively high rates in some regions and extremely low rates in others condition the investment decisions of potential home buyers to these trends. Inheritance Tax (succession rights) in Spain has a direct impact on the financial behavior of buyers and the decision regarding where in Spain they wish to live or buy a property.
You can read interesting information about this subject on our webpage Inheritance Tax Andalusia. If you need a lawyer specializing in Inheritance and Gift Tax, just send us a message through the contact form below.
If you are interested in the subject of Spanish inheritances, you might also want to read our pages on:
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European Certificate of Succession
The European Certificate of Succession is a ´new´ standard for international inheritance procedures within the European Union (EU regulation number 650/2012 of the European Parliament). It is applicable to successions of persons who die with assets in different countries of the European Union from 17 August 2015. The European Certificate of Succession is a public document of a voluntary nature, which contains the essential information about inheritance, such as the details of the deceased, information about the last will, applicable inheritance law, details of the heirs and the assets allocated to each legal heir.
In certain cases the certificate can save the heirs costs because they f.e. can avoid the Spanish inheritance deeds. However, the regulation of the European Certificate of Succession does not apply to citizens of the United Kingdom (due to Brexit) and neither to Ireland and Denmark.
Increasement in international inheritances in Andalusia, Spain
This European Regulation is very important in some parts of Spain, such as Andalusia, Malaga and in particular in the Costa del Sol. The reason for this is that here are many foreign owners of assets and homes, both resident and non-resident in Spain. They normally bequeath their assets to their spouse or children through a will (testament), who usually live in the country of their nationality, such as the Netherlands, Belgium, Germany, England, Sweden, etc.
Unfortunately, with the coronavirus pandemic, many hereditary procedures are being highlighted in Spain, due to the unfortunate number of death, which has led to more succession procedures taking place than usual. This also results in longer waiting times at the central last will registry in Madrid (Registro de Ultimos Voluntades).
What is the main purpose of the European Certificate of Succession?
This certificate is an official document that allows for accrediting, in any country in the European Union, all the information about an inheritance distribution. This must be in accordance with the national law of the member state and is meant to make the international process easier and cheaper.
Who can request and who may issue this certificate?
FORM EUROPEAN CERTIFICATE OF SUCCESSION
The heirs, legatees having rights in the succession and executors of wills or administrators of the estate may request the issue of a European Certificate of Succession. This needs to happen by submitting form IV, included in annex 4 of Regulation (EU) no. 1329/2014, of 9 December, of the Commission.
This certificate by law may be issued by the court or notary of the country of which the inheritance law applies. This is either the country of residency or the country of which the law has been chosen in the Last Will.
This new international standard is intended for succession processes of European Union citizens, whose heirs have distributed the inheritance in their country of nationality, with the testator owning property in Spain or another country in the European Union. As said before, this regulation of the European Certificate of Succession does not apply to citizens of the United Kingdom, Ireland and Denmark.
For example: Let’s imagine that there are Belgian heirs, whose father signed a last will. In this Belgian or Spanish will or testament he chose the law of his nationality to apply and the heirs distribute their father’s estate in the city of Ghent. The deceased had purchased a homein Malaga and also had money in a Spanish bank. They can directly request a European Certificate of Succession from this Belgian notary, in order to submit it in Spain. This to be able to inscribe the assets owned by their father in Malaga according to the applicable rules in name of the legal heirs.
What are the benefits of this European Certificate of Succession?
The main advantage of this certificate is that it´s a standard document in English valid in every European country. This makes the inheritance process in Spain or other countries easier and avoids certain costs.
Firstly, the European Certificate of law doesn´t require (possible multiple) legal translations anymore, nor the international ´Apostille of The Hague´. (The Apostille or Apostle of The Hague is a small certificate from the court to proof to the foreign notary that it is an official notorial document). This doesn´t only save costs but also a good amount of time. The legal translation and Apostille until now were always needed for the national Declaration of Law that of course still exists.
Secondly, the European Certificate of Succession in certain, simple cases can be directly used to distribute the assets owned by the deceased. In these specific cases the considerable cost for the Spanish inheritance deeds can be spared.
What are the drawbacks?
One of the main drawbacks is that the certificate is only valid for six months from its date of issue. However, it is possible to request an extension.
Also, as said before, the certificate is not automatically valid for heirs to register the property purchased by their father, which they have inherited. This needs to be done in the Spanish Land Registry (Registro de la Propiedad) and this authority depending on the exact situation can still require the Spanish Inheritance Deeds of the notary. This is explained in more detail at the end of the article.
In any case it´s important that the heirs sign a wide notarial Power of Attorney to their Spanish lawyer. This always needs to include a clause for the potential signing of the Inheritance Deeds, in case still needed after all. Also the normal procedures as the tax declaration or representation before the bank need to be included.
Does this certificate have any impact on Inheritance Tax?
There is no impact onInheritance Tax or on the declaration procedure of this tax. Once the European Certificate of Succession is received in Spain, the tax form to pay the corresponding Inheritance Tax must be submitted to the Spanish tax office. This even if the payable amount is cero like in most cases in Andalusia for close family members as spouses, children, parents and grandchildren. The tax declaration needs to be done before being able to take the paperwork to the banking institution or the Land Registry, the Oficina de Liquidadora.
The height of inheritance tax depends on the:
relation to the deceased
(fiscal) value of the assets inherited in Spain
balance of the bank account(s) on the moment of death
official worth of a vehicle
It is important to know that inheritance tax must be declared within six months following the date of death. Likewise, if an urban property is inherited Plusvaliatax must be paid. The Plusvalia is local profit tax counted by years of ownership of a property.
Effects on the Land Registry record in Spain
As said, the Land Registry in Spain in certain cases does directly admit the European Certificate of Succession as a title of the hereditary succession. This exemption to register a property in the name of legal heir without the need for a notary inheritance deed or judgment is only possible in the following situation. Also, the Land Registry at all times preserves the right to require Spanish inheritance deeds or other additional legal documentation after all.
Requirements for (potentially) avoiding Spanish inheritance deeds:
Only one single heir
No interested parties, with the right to a reserved share (like or example children under Dutch or Belgian inheritance law)
No curator or authorized person to conduct the inheritance process
Required documentation for the Land Registry when inheritances deeds are not required:
International Death Certificate
Last will or testament (if not signed in Spain, then with legal translation and Apostille)
Certificate of the Spanish Last Will registry (Registro de Ultimos Voluntades)
Notary document signed by the sole heir explicitly requesting the inscription of the property in their name in the Land Registry. This document can be signed by the notary in their own country (in this case the legal translation and Apostille of The Hague are required). However, it can also be done by a Spanish notary.
Conclusion: legal advice for your Spanish inheritance process
The Spanish inheritance process unfortunately is complex, costly and surrounded by lots of bureaucracy, as you surely understand from this article. Are you involved in an inheritance process where the deceased owns a property in Andalusia? And are you in need of legal advice to save time and costs? Do not hesitate to contact C&D Solicitors and our lawyers will be happy to guide you. We are a law firm specializing in providing legal and tax advice to foreigners in Andalusia and we know how to help to make this process as easy as possible for heirs. You can contact us so we can provide the first free consultation or offer.
More information: You can read more about inheritance law and Spanish willsunder ´legal services´ where you can also watch our video of the overall process.
Author: Gustavo Calero Monereo, lawyer at C&D Solicitors, Málaga (Andalusia)
Due to the Brexit there are many tax consequences for British citizens in Spain
We are near the end of the transition period established within the BREXIT for British citizens resident in Spain, which ends on 31 December 2020. There are many tax consequences for British citizens in Spain but for now we are only going to focus on British citizens with assets in Spain. For example pensioners or owners of a second home. From the perspective of trade or the movement of British citizens in Spain for work reasons, the tax and bureaucratic consequences of Brexit are higher, even though we will not cover that in this article. However, we will also briefly address the process to obtain Spanish residency. This because during the past few months we have witnessed many police stations becoming overwhelmed and unable to meet the many requests for appointments for British citizens and their family members to obtain a residence permit in Spain. This procedure was approved as part of the transition period set to end on the 31st of December 2020.
Over the last few weeks of 2020, it has been impossible for many British citizens to make an appointment at the police station in the province where they live and this also applies to the province of Malaga in Andalusia. This has led many British citizens resident in Spain or about to move to Spain starting 2021 without a residence permit.
What will be the situation of British citizens resident in Spain after BREXIT?
Well, these British citizens will have to apply for a residence permit after the final Brexit on the 1st of January 2021, just like any other citizen from a third country outside the European Union. We recommend that first of all these citizens register with their city hall as soon as possible and also request a S1 form from the United Kingdom to prove that their healthcare costs in Spain will be covered by the United Kingdom. After this, the easiest thing to do is to contact a law firm or administration company that can advise you and help you with the process, as it will be complicated to do it on your own. It is very important not to delay and do this as soon as possible, even though it is true that there is currently a lot of uncertainty about the procedure in question, as the negotiations with the European Union remain open.
How will the status of British citizens change after 1 January?
British citizens will be able to travel to Spain and stay for up to 90 days within a 6-month period, consecutive or not, without having to obtain a visa. They could even be required to prove their financial capacity to cover their stay in Spain, as is the case with travellers from countries outside the European Union. If they wish to stay longer, it is very likely that they will have to apply for a visa or work permit, even though this has not been defined yet since the negotiations remain open.
What will happen with the British driving licence?
From 1 January 2021, the general regulations will apply and British driving licence will be valid to drive in Spain for six months counted from the owner’s entry in Spain or from the date that legal residence is obtained. They will need to exchange their British driving licence for a Spanish one to continue driving in Spain after those six months.
How will Inheritance Tax change after Brexit on the 1st of January 2021?
As we explained in detail in an earlier article about inheritance tax, fortunately, from 1 January 2019, citizens not resident in the European Union are able to obtain the same tax benefits and bonuses for Inheritance Tax as European citizens. Therefore, the application of Inheritance Tax and its consequences would not change for British citizens.
Potential future Inheritance Tax when buying a home in Spain
When considering the purchase of a home in Spain, as the regulations applicable to this tax depend on the autonomous community where the property is located, a very important matter is to consider which autonomous communities have a higher and a lower inheritance tax, before making such investment(s). For instance, British nationals are the main buyers of homes in Spain. Alicante (Valencian Community) and Malaga (Andalusia) are the two main locations for foreigners to buy a home in Spain but. However, when it comes to Inheritance Tax, there are big differences between one community and the other. The Valencian Community has the third highest Inheritance Tax in Spain, while Andalusia has the third lowest, according to the General Economists Council of Spain, in their taxation study for 2020. This means that, when thinking about that tax, Malaga has a much cheaper rate of Inheritance Tax than Alicante.
What happens to taxes on profits obtained from renting out my home in Spain?
If you bought a home in Malaga as an investment, for instance, and you use it forholiday rentals as a citizen of the European Union, the profit obtained from such rental would be taxed at 19% through their IRNR income tax for non-fiscal residents with a house in Spain. Many expenses can be deducted: mortgage interest, repair and maintenance costs for the property, electricity, insurance, etc. However, once you are considered a citizen not resident in the European Union, it will be taxed at 24% and no deduction for property expenses may be applied.
Estate Tax or Wealth Tax on my properties located in Spain
Estate Tax or Wealth tax also apply to assets and rights that non-residents have in Spain. As this tax has a minimum personal exemption threshold of 700,000 euros over the minimal fiscal value, all non-residents -in the EU or outside it- with assets of a lower value would pay nothing. The main difference in terms of EU and non-EU citizens lies in the fact that EU citizens can apply the regulations of the autonomous community where most of their assets are located. However, non-EU citizens would have to follow national regulations instead of those of the autonomous community where the assets are located. If we compare the tax rates in Andalusia to the national ones in terms of estate tax, the national rate of estate tax is somewhat lower. Therefore, applying national regulations does not always entail a greater tax liability.
The actual impact of that tax is non-existent for most non-residents due to the minimum fiscal value of 700,000 euros applied per person. This is why it is recommended that, if you are thinking about luxurious purchasing a property in for example Marbella on the Costa del Sol, it might be interesting to put the property in more than one name to profit from this exemption. Still, estate tax could have a high impact for those with high-value assets in Spain or considering the purchase of luxury properties.
How will Brexit affect the sale of my home in Spain?
The tax rate on capital gains obtained from selling the property would go from 19% to 24%. The withholding (down payment) of the Capital Gain Tax that a buyer must apply to a non-resident seller to pay the amount at the Tax Agency in Spain will continue to be 3% of the purchase price. This percentage is the same for EU citizens and non-EU citizens.
Will Brexit affect the ITP transfer tax on the purchase of a home in Spain?
No, it will not. The property ITP transfer tax paid in Spain for the purchaseof second-hand homes do not vary for EU citizens and non-EU citizens, for which reason, from 1 January 2021, it would not lead to greater expenses for British people. The same counts for the 21% VAT tax and documented legal acts (AJD tax) paid for new off-plan properties. The ITP tax depends on the autonomic region. For instance, in Andalucia a house buyer pays 8% ITP transfer tax over the purchase price up to € 400.000, until € 700.000 it´s 9% and after this the ITP will be 10%. To calculate the ITP tax on more expensive houses for a married couple it´s important to take into account if the couple is married in community or separation of goods.
Is the double-taxation agreement in force between Spain and the United Kingdom important?
Yes it is. The main purpose of this double-taxation agreement is for a British national living in Spain or a Spanish national living in the United Kingdom to be able to work and invest in those countries without having to pay twice for the same thing. This agreement will remain in force and is unaffected by the United Kingdom leaving the European Union. This agreement, which came into force on 12 June 2014, contains special clauses that exempt certain public pensions paid by the British government from taxation in Spain, as they can only be taxed in the United Kingdom. Likewise, this agreement protects residents national of either country from being taxed twice on income from capital gains and dividends. Income tax for non-residents, company tax, personal income tax and estate tax are covered by this agreement, for which reason these aspects should not be taxed twice in both countries.
Potential changes in the future for British house owners
Over the next few weeks, there will surely be changes affecting British nationals as it is very likely for the negotiations to change certain important aspects. However, on the date this article is posted (22 December 2020), little is known. We advise that, if you have any doubts, you contact and obtain legal or tax advice from a lawyeror company specialising in non-resident house owners.
Author: Gustavo Calero Monereo, lawyer at C&D Solicitors, Málaga
First Occupation Licence in Andalusia (LPO) and the RTA rental licences
Big news for Andalusian house owners that don´t have their First Occupation Licence (LPO) yet which is obliged to present when applying for the RTA rental licence of the Registro de Turismo de Andalucia. This was a problem because many houses don´t have this licence as it wasn´t a standard requirement for new build houses until the eighties.
On March 12, the Andalusian Government published in its Official bulletin (BOJA) a Law Decree which has as its main purpose to simplify the regulation of some procedures in Andalusia. This regulation has affected a multitude of procedures and among these the new article 169 bis of the Urban Planning Law of Andalusia (LOUA) of 2002 was approved, which affects the First Occupation Licence (Licencia de Primera Ocupacion or LPO in Spanish).
Likewise, article 169.3 of the LOUA has been modified with a second paragraph that establishes that those acts that are subject to a responsibility declaration do not require a licence. As a general statement, we can say that the new decree allows obtaining the right to occupy or use the majority of buildings located on consolidated urban land throughout Andalusia, by submitting the responsibility declaration together with the required legal documentation by the interested party.
In other words, it will no longer be necessary for these buildings to obtain the First Occupation Licence (LPO) from the city council since the new ´Declaration of occupation or use´ replaces the Occupation Licence. The responsibility declaration of occupation grants the owner the same rights that the First Occupation Licence granted from the day of its presentation.
What is a “responsibility declaration”?
The responsibility declaration is a document signed by the interested party in which he declares that he meets a series of requirements according to specific regulations and therefore allows him to acquire a right. From the date of presentation (also by a certified architect) the right that is intended to the interested party is recognized, so from the legal point of view it is equal and replaces the earlier First Occupation Licence (LPO) granted by the City Council.
This type of procedure is becoming more common in the Spanish administration. This is because from the presentation of said responsibility declaration the right is recognized and, therefore, it is possible to avoid the waiting time and delay of the administration which in the case of the First Occupation Licence was months.
Which buildings can present a responsibility declaration for their right of occupation?
Article 169 bis commented above, establishes in its section c that it can be obtained by responsibility declaration “the occupation or use of the works of the previous section, provided that the buildings and facilities are finished and their destination is in accordance with the regulations of application“. These works in section b) of article 169, whose occupancy rights would be obtained by means of a responsibility declaration, are: “Works in existing buildings and facilities, on consolidated urban land and in accordance with urban planning, that do not alter the occupation and height parameters, nor involve increases in buildability or the number of homes ”.
Therefore, in section c, existing buildings that have never had a First Occupation Licence are enabled so that they now can obtain their right of occupation, by filing a responsibility declaration. Section d includes the possibility of obtaining the first occupation or use, through a responsibility declaration for new buildings: “d) The first occupation and use of new buildings, provided they are finished and their destination is in accordance with the application regulations and with the works licence granted”.
It is important to say that this change does not affect dwellings on undeveloped land, rustic dwellings, since they cannot obtain the First Occupation Licence as they officially are not part of the urban planning.
What obligations does the responsibility declaration establish?
The interested party who signs a responsibility declaration to acquire the right to occupy a property is responsible for the fulfilment of the established requirements to be able to enjoy said right. Along with the aforementioned declaration, he must present the required technical and legal documentation that certifies compliance with the requirements. Likewise, it will undertake to maintain compliance with said requirements once the declaration is presented.
Therefore, it is evident that responsibility declarations for the occupation or use of a building should not be presented when the requirements demanded by the norm for their presentation are not complied with. It must previously be analysed whether the house in question can obtain this right. It should not be forgotten that the presentation of the responsible declaration supposes assuming a legal responsibility. Presenting said declaration with falsification of the data or documents provided or not attaching all the required legal documentation may suppose legal responsibility for the interested party by the administration.
How does this regulatory change affect tourist rental in Andalusia?
This regulatory change is evident that it will allow many homes, which up to this date do not have a First Occupation Licence for various reasons but still complied with the requirements. These can now obtain this legal recognition with the presentation of the responsibility declaration and required documentation. Since the Andalusian Government legislated tourist homes and forced their registration in theAndalusian Tourism Registry (RTA), requiring the First Occupation Licence, there are many homeowners in Andalusia: Malaga, Costa del Sol or Costa Tropical for example, who have applied for such a licence for their homes. Due to the slowness of the municipalities in granting the First Occupation Licences, many of the owners that have applied for said licence are still waiting for this to be resolved.
Many owners from towns such as Nerja, Málaga, Marbella, Vélez-Málaga, Benalmádena, Fuengirola, Almuñécar, Torrox … etc, and many other municipalities on the Costa del Sol and Costa Tropical will now be able to obtain their right of occupation through a responsibility declaration and hence comply with the requirement of the LPO. This way they can carry out the registration of their home in the RTA for the tourist rental of the property.
There are more than a few foreign clients of our office who have spent months or years „fighting“ with their City Council to obtain their First Occupation Licence and now they will be able to obtain said right with the responsibility declaration, easily and quickly. Of course, for these homes, this regulatory change has meant a very important and positive change since one of the main attractions for a foreigner who wants to buy a property in Andalusia is its profitability through tourist rental. With the current crisis of the coronavirus COVID-19, these types of changes help the economic activity.
How does this change affect the sale of second-hand properties?
Most of property purchases by foreigners in Andalusia are existing homes and some of these do not currently have an LPO. It is evident that the responsibility declaration will, from now on, facilitate the process of obtaining the right to occupy a property. This due to the fact that it is understood that the right of occupation or use has been acquired since the presentation of the responsible declaration. Well, from the buyer’s point of view it is very important that, when buying on urban land, carefully check whether the property can obtain said right of occupation or not if the occupancy rights have been acquired by the seller through the presentation of the responsibility declaration.
The potential buyer must request a copy of the technical documentation presented together with the declaration from the seller, so that his lawyer and / or architect can review it and confirm that said property meets the requirements to obtain the right of occupation or use. If the future buyer does not make this verification, there is a risk that the seller of the property, in order to make it appear that his home has the right of occupancy, presents or is going to present the responsibility declaration despite the fact that the property cannot obtain said right for not complying with the requirements.
In this scenario, the buyer and new owner of the property may encounter a problem. Obviously, the seller could be held responsible for this situation but in most cases of foreign sales, the sellers are non-resident, it would be expensive and complicated to initiate legal proceedings. Always check with your lawyer about the situation of the property you are going to buy.
As we have previously mentioned, also for this type of housing it is possible for the developer to obtain what was previously the First Occupation Licence (LPO), through the declaration of occupation or use. The Urban Planning Law of Andalusia (LOUA) with this regulatory change, establishes that an occupancy licence for new homes is not required in Andalusia, it is possible to present the responsibility declaration of occupation.
In other words, even if the developer wanted to he or she could no longer obtain the LPO from the City Council as a result of this regulatory change. This means that, even if it is stated in the signed private purchase contract that the developer is required to obtain the LPO it would now be sufficient for the developer with the responsibility declaration as it would prove that the new house has the right of first occupation. The promoter by means of the declaration fulfils the private contract of sale.
What happens if the developer has improperly filed the statement?
The City Councils have an obligation to review whether or not the responsible statement meets the requirements to obtain the right of occupation or use, and may declare the cessation of occupation in the event that the requirements are not met and may also demand legal responsibility from the promoter for said actions.
If within the first six months from the presentation of the declaration, the City Council has not adopted the necessary measures for the cessation of the act or use, in the event that the requirements for that occupation are not met, the City Council would be liable for damages caused to third parties in good faith. In other words, the City Councils would answer to the people who bought these homes with the conviction that the sale could be carried out, since these the day they signed the Deed of Sale, they had the declaration responsible for the promoter of occupation or use (former LPO) .
The foregoing gives leaves us to understand that if the Town Hall reviews said declaration in those first six months and understands that the cessation of the occupation must be decreed, the developer would be responsible for the damages to the buyers. However, I understand that in most cases there should be no damage to the buyers, since the optional management of the works (mainly architects and surveyors) will ensure that their final works certificate is in accordance with the law since they would be the main responsible along with the promoter if this was not the case. The final works certificate is the most important technical document to obtain the right of occupation in a new home.
Can the declaration of occupation or use be presented in all Town Halls?
It is true that to this date few municipalities have approved specific procedures for this process such as Malaga, Marbella, Seville or Córdoba. The Andalusian Government has published a practical guide to this decree, along with the models for the responsibility declaration and the necessary documentation, so that the Town Councils can use it. In our opinion, such models can also be used by citizens since the right of occupation can only be obtained through a responsibility declaration, and not through a licence granted by the City Councils as of March 13th 2020.
It is true that since most of the municipalities have not approved this new procedure through their municipal ordinance, it is likely that they do not agree with obtaining said right of occupation by presenting the responsibility declaration, unless that City Council has previously approved that specific procedure.
Notwithstanding this Decree in the tenth transitory provision, allows those interested who prior to March 13 have initiated a procedure to obtain a first occupation license, can request the application of this new procedure and therefore may obtain the right of occupation through the responsibility declaration.
If the new regulation provides for the possibility of changing the procedure already initiated, we understand that since it entered into force it allows obtaining the right of occupation by means of a responsibility declarations, even though the City Council has not published its municipal ordinance.
Can supplies be contracted with this responsibility statement instead of the LPO?
The answer is categorically YES. Although it is very likely that it will be necessary to explain and discuss, at least during these first months since probably several of the supply companies for electricity and water will not have obtained this information or guidelines of said legal modification and will continue to demand the LPO. As you can understand, the best thing to do if you are an owner is to consult with your lawyer or architect about the specific situation of your property.
Of course, if you are in the process of buying a home or thinking about it, it is very important to contact a specialized lawyer who can advise you in the process of buying and selling the property and who knows these urban issues well.
Author: Gustavo Calero Monereo, lawyer at C&D Solicitors, (Málaga, Andalusia)
Purchase or sales contract during COVID / Corona crisis
It is clear that the healthcare crisis caused by the Coronavirus (COVID-19) has had a huge impact on all areas of our daily lives. The state of alarm decreed by the Spanish government, as well as many other governments in foreign countries, has caused movement restrictions and limitations, the closure of the airspace, the paralysis of the business fabric and government agencies, etc. People’s everyday lives have been severely affected from a social and economic standpoint.
With this article, we would like to respond, as much as possible, to the doubts and uncertainties of foreign clients buying homes in Spain, as well as their sellers. We are referring to sales between individuals that were already underway with signed contracts but which were ’surprised‘ by the COVID-19 crisis and the measures adopted by the Spanish government decreeing the state of alarm.
At the end of the article, we will comment briefly on the legal situation of sales of new homes or off-plan sales from developers.
What does Spanish law say on the fulfilment of purchase contracts?
The first thing that must be said emphatically is that, under Spanish law, the clauses agreed in a contract have the force of law and, therefore, the parties are required to fulfil them. In other words, the impossibility of fulfilling what has been agreed in a contract is an exception and is interpreted very restrictively.
The Spanish Supreme Court, when dealing with potential breaches of contract and to avoid the loss of the money paid, has established that the party in breach has to evidence and argue the reasons behind said breach, as well as prove that it did everything possible to perform the contract.
However, even after establishing the impossibility of complying with the contract, if it is possible to amend or adapt it so it can be fulfilled, the parties must seek to modify the contract in that way, to solve the problem arising from the situation caused by the state of alarm and the COVID-19 Corona crisis. In other words, when faced with the potential avoidance of the contract by one of the parties, they must always attempt to reach an agreement to fulfil it.
Which property sales could be affected by the state of alarm?
In my opinion, the conveyance contracts that may be affected are those that required either of the parties to fulfil a requirement or condition agreed in the contract before the execution of the public deed of sale and that condition is affected by these months of paralysis.
Due to the paralysation of activities and movement limitations, it is very possible that some of the requirements established in a conveyance contract cannot be fulfilled, as the estimated time to process or manage these were calculated based on a normal situation, which has not existed since 13 March. As an example, we can mention the following:
Purchase contracts in the state of alarm:
For the conveyance contract to establish the condition of being granted a building permit or the record for legalisation of a home, such as DAFO in rural homes in Andalusia. As city halls are paralysed or working at minimum levels, it is very possible for these applications not to be processed until the state of alarm is brought to an end.
For the condition to be obtaining a Spanish mortgage. If the appraiser cannot travel to visit the property or the bank’s risk department is not operating, this process will be paralysed, making the average resolution time much longer than initially expected.
For the date of signing the conveyance contract and recording it as a public deed to coincide with the period of the state of alarm and/or the restrictions on commercial flights, making it impossible for either of the parties to attend the notary office.
The impossibility to obtain an NIE (foreigner’s identification number.), which is necessary to sign a conveyance contract before a notary and pay the corresponding taxes. The processing of these documents is currently suspended. The national police stations in Malaga that we asked don’t know when they’ll be able to open to accept new NIE applications.
Either of the parties being admitted into hospital or in quarantine.
What should the seller and buyer do in this situation?
Well, the first thing is to see if the private contract contains any clause that governs these situations since, as I’ve mentioned, the sales or purchase contract has the force of law and binds the parties. However, in conveyance processes where the deed cannot be signed for reasons arising from the coronavirus crisis, what both parties should do would be to amend the contract and extend it, to give time to the party that needs it in order to complete the sale. In most situations, it is only a matter of time for that circumstance or condition that is currently impossible to fulfil to be fulfilled later on.
Likewise, in the event of inflexibility and the refusal of either of the parties to grant such an extension to the conveyance contract, in most cases there would be no legal grounds to terminate the contract and/or claim damages. As mentioned above, the parties must always attempt to reach an agreement to comply with the contract.
Is it possible for the buyer to terminate the contract due to the COVID-19 crisis?
Withdrawing from a conveyance contract due to a sudden drop in house prices and in the face of an economic crisis is a complex issue. In this case, we are referring to the buyer having to accredit meeting one of the requirements established in case law for terminating purchase contracts, this being that there has been an extraordinary change in the circumstances leading to the execution of said contract.
In other words, the buyer would have to evidence that the current economic crisis, resulting in a deep and prolonged economic recession, could be openly considered an economic phenomenon able to generate a severe disruption or change in the circumstances leading to the execution of said contract.
In Spain, the courts have been rejecting the possibility to terminate a sales or purchase contract based on this circumstance. However, this possibility should not be ruled out and individual factors should be analysed, such as whether the home will be a primary home or a holiday home, if the buyer was in need of mortgage financing, if the financial situation of the buyer has changed significantly, etc.
What is the buyer’s situation in the sales process?
With this question, what we want to address is the situation of a buyer who made a decision to purchase a home at a specific price a few months ago, based on an economic situation that is in no way similar to the current one.
Let’s imagine Dutch, Belgian, English, Swedish or other foreign people who wanted to invest in property in Malaga or the Costa del Sol, either to obtain a profit or to let it. Clearly, the sales price they agreed was based on the value of that property under the earlier economic situation. For instance, let’s imagine a home in the historic centre of Málaga or Nerja, highly sought-after areas with tourist attractions before COVID-19, with great possibilities for letting in the tourist market, which is currently suspended.
Well, as a buyer, in the event that continuing with the purchase of the property would lead to incurring significant levels of debt, the first thing to do would be to analyse two things:
The amount of money paid to the seller (usually 10% of the purchase price). Whether the buyer is willing to lose that money, essentially due to thinking that it is better to lose the money and not buy the property.
The content of the purchase contract clauses agreed in terms of what happens when the buyer breaches the purchase contract. This is an important issue because a breach of contract could lead to different legal situations. The usual process is to execute an earnest money contract, which entails losing the money paid to the seller, leading to the termination of the contract, this being the clause that our firm usually agrees in conveyance contracts. However, if this is not properly drafted in the contract, it is possible for the seller to be entitled to require the buyer to complywith the purchase contract and sign the public deed, even if the buyer agreed to lose the earlier money paid. Obviously, this claim from the buyer would have to be addressed in judicial proceedings, which would take years before the parties get a resolution and usually sellers settle for keeping the money paid as a deposit.
What is the seller’s situation in the selling process?
For sellers, they are most likely the most interested in completing the sale of the home as, certainly, the price set in the sales / purchase contract signed before COVID-19 will be higher than what they can obtain in the short or medium term. Without a doubt, the current situation will lead to a general drop in house prices, even though no one knows how long this will last.
That said, it is possible for sellers who already have a signed contract and who see that buyers are hesitating to complete the conveyance to be interested in making it easier for buyers to complete the purchase. In other words, in this context, negotiating a lower price so that the seller can sell doesn’t seem far-fetched. In the end, the price drop would depend on whether it is very important for the seller to sell right now or they can wait, or whether the money already paid by the buyer is enough compensation for the seller to agree to keep that amount as a penalty instead of negotiating.
What is the situation when purchasing new builds or off-plan homes?
In sales of this type, in terms of the performance of the contract by the buyer, the situation is the same as explained above, in terms of both compliance with the contract and its termination clauses. In my opinion, the buyer’s potential doubts would be determined by the progress of the works and the expected completion date of the development, also thinking about the financial solvency of the developer.
If the buyer signed the sales contract over one year ago, when the market was experiencing a good time and prices were rising, it is very likely for the price agreed at that time to be lower than what they could find at the beginning of this year, for instance. On the other hand, if the works are close to completion, there would be little doubt as to whether the developer will complete them, as they would be almost completely sold and few buyers would be thinking about terminating the purchase contract, since they would have already made significant payments on account for their homes. In this case, the scenario for the buyer is safe.
In the case of developments where construction has not yet started but which were already being marketed, with expected completion likely coming in a year or two, the scenario is different. In this case, buyers who are in doubt and recently signed the private contract must assess the price of the property and its completion date, as well as find out the number of homes with signed contracts sold by the developer, in order to make a decision. However, if the private contract has not yet been signed and only a reservation had been agreed with the developer, they can withdraw from it and recover the amount paid. They can also wait longer, as developers are likely to lower prices, depending on how long the crisis lasts.
In terms of the solvency of developers, due to the obligation to guarantee all the amounts paid during construction once the private contract has been signed, the buyer would have complete legal certainty in the event that the developer is unable to complete construction. This situation is in no way similar to the 2008 crisis, where many buyers lost their payments on account.
Individual review situation purchase contracts
However, these sales processes starting prior to the COVID-19 crisis can lead to complex situations that should be analysed individually and always with the advice of a lawyer. This is not the time to make decisions without the appropriate legal knowledge, taking into account that a private conveyance contract has already been singed. Rushing is never a good idea.
Author: Gustavo Calero Monereo, lawyer at C&D Solicitors, (Málaga, Andalusia)
Due to the actual crisis that has been declared in the whole world by the World Health Organization because of the Coronavirus (also known as Covid-19), almost every country has put into force different measures.
*This document has been written according to the law and Decrees in force until 4th April 2020.
In Spain, the 14th March 2020, the government declared the “state of alarm”(regulated in Art. 116.1 of the Spanish constitution and the organic law 4/1981), for 15 days, (until the 29th March), through the Real Decree 463/2020, closing museums, monuments, restaurants and almost every business open to the public. Nevertheless, concerning the increase of the infections, the state of alarm has been extended for another 15 days until the 12th April 2020, after the approval of the Parliament ( Congreso de los Diputados, Decree 11/2020), and pending for another extension until the 26th April.
The main goal of these decrees is to prohibit free movement of people in order to prevent further increase of infection among the Spanish population. Nevertheless, all these measures have economical, fiscal and, of course, social consequences.
Extension of the payment dates for self-employed and small entrepreneurs (PYME) (Deferral and split payments).
Self-employed and small entrepreneurs with a turnover of less than € 6.010.121,04, are allowed to defer payment of the tax debt (less than 30,000 euros) without the need to provide a guarantee for a 6-month term. The first three of these months will not accrue default interest, with the consequent. Said deferral only refers to settlements or self-assessments that had to be presented or entered from March 13th to May 20th of 2020 (article 14 Decree 7/2020).
A postponement of tax debts that previously could not be postponed is now allowed (article 65 LGT):
Those that the person is required to make payments on account for (art. 65.2 b), such as the quarterly model 111 or the 3% model Modell 211.
Those derived from taxes that must be passed on by law having been collected (art. 65.2 f), such as model 303 of VAT
Fractional payments of Corporation Tax. (art. 65.2 g), such as IS model 202
Suspension of legal terms not concluded before March 14 (Decree 8/2020 and 11/2020)
Article 33 of Royal Decree-Law 8/2020 and its clarification with Decree 11/2020 applies to all taxpayers, extending the deadlines not concluded before March 14, 2020, until April 30 2020 for:
The payments of tax debt for liquidations in the voluntary period and those that, in the executive period, have been notified of the enforcement order. For example: if you have been notified of a settlement for the payment of a tax debt on March 12 you would have to pay it no later than April 20 (according to the General Tax Law in its article 65.2), however, with this decree the payment can be postponed until April 30.
Deadlines and fractions of deferrals already granted (prior to March 14, 2020 without prejudice to the deadlines reflected in art. 14 of the previous Decree 7/2020), as well as the deadlines on auctions and adjudication of goods made by the Treasury state.
Deadline to meet the state agency requirements, embargo proceedings, requests for information or to make allegations in tax procedures (regarding nullity, rectification of errors, requesting returns).
If there was doubt as to whether or not these tax procedures initiated by the corresponding autonomous and local Administration, the new Decree 11/2020, in its article 53, establishes that the suspension of the aforementioned period also applies to local and autonomous administration (in the art.33 of decree 8/2020).
Deadlines to meet requirements and requests of the cadastre.
No proceedings to execute the guarantees already seized which fall on real estate in the administrative procedures of constraint
What happens with the procedures communicated as of March 14?
For all the aforementioned procedures communicated as of that date, they are extended until May 20 of 2020 (unless the one granted by another tax rule is higher).
For example: if a settlement for the payment of a tax debt was notified on March 19, in normal cases you would have to pay it no later than May 5, however, with this decree, payment can be deferred until May 20.
However, in any of the above assumptions, if the taxpayer complied with the requirement, paid the tax debt or presented allegations despite the deferment granted, they will be understood to have been carried out for all purposes, procedure completed.
What happens with self-assessments such as the payment of Property Transfer Tax in the sale of a home?
When a person buys a home in Andalusia, they have 30 days to pay the Property Transfer Tax, which is currently 8% of the purchase price. The payment of the same is done through a self-assessment. In other words, the buyer or his/her representative prepares this tax model and presents it voluntarily for payment within that period.
The decree regarding the state of Alarm does not include self-assessments as deferrable, according to Royal Decree 465/2020, of 17 March, amending Royal Decree 463/2020 of 14 March, declaring a state of alarm, so for example, neither the quarterly settlements of VAT nor personal income tax (models 130 and 303) are postponed and maintains their deadline for April 20 for the third quarter.
What happens during the state of alarm with the legal term of actions that tax authorities can exercise against someone and the deadlines for filing appeals?
Royal Decree 11/2020 establishes that the period from March 14 to April 30, will not count for the purposes of prescription in the actions that the tax administration may exercise against the administered.
Let’s take an example, if the administration had a maximum period until March 19 to demand payment of a tax, and it has not been demanded by March 13 the administration automatically has until April 30 to request payment.
There would neither be a deadline for the expiration of the procedures initiated by the administration.
On the other hand, the deadlines for the filing of administrative economic appeals against tax acts or in the economic-administrative procedures not notified before March 14, 2020, do not start until after April 30, 2020.
What happens with the income declaration from rentals or the annual IRNR declaration for non-residents?
These deadlines do not vary, meaning that all non-residents in Spain receiving an income from rentals of a property here in Spain must declare said profit quarterly within the corresponding period.
Due to the exceptional situation caused by the coronavirus, we inform you that we at C&D Solicitors will continue to attend to all matters of our clients in the coming weeks. You can reach us preferably by email as we´ll only be working in shifts from the office and the rest of the time online from home. Do you have urgent matters for which you would like to come to the office? Please just contact us first.
As most of our projects like purchases or sales take several months to complete, we think that a lot of these will be affected too much by the current situation. However, certain public services of the Spanish authorities will be limited for public. This applies especially to the signings of deeds or Power of Attorneys at the notary, to the application of the fiscal NIE documents and to certain administrative consultations like in the Town Halls. We will inform you individually if these apply in your project.
Deadlines from the government as payments of taxes or fines, administrative or legal deadlines, etc. are by law suspended while the state of alarm lasts. If you have any doubt about the deadline of a private agreement, please let us know.
C&D wants to cooperate and collaborate with the measures taken by the Spanish state to avoid putting at risk the health of our colleagues, clients, friends and family. Thank you for your understanding and we wish you all good health!
With this post C&D Solicitors would like to inform you about recent information from the Spanish government about the Corona virus. As the changes happen fast now and information often isn´t put in English, we hope our translation can help you to understand the current situation.
Due to the Corona Virus Andalusia, the central government declared a state of emergency on Saturday, March the 14th for the whole country. This is due to the -then- almost 6,000 cases of infection at that moment, half of which in the region of Madrid. The country is largely locked down and all powers now lie within the central government to guarantee the safety of the country and all food supplies.
All schools, restaurants, parks, playgrounds, beaches and public leisure facilities are closed and everyone must STAY INSIDE as much as possible. The police can give out large fines to those who don´t respect these rules and make it possible for this virus to spread any further. People can only go outside for:
– work (if working from home is not possible)
– purchases in the nearest supermarket
– visit to pharmacy or medical centre (in case of emergency)
– walking the dog (close to home)
– to get gas
– use the cash machine
– buy at kiosks (newspapers)
– to help the needy / children / elderly
– return to the first residency
So one should NOT go for a walk, jogging, to the gym, meet up with friends, have a chat with neighbours or other people on the street, etc. Public transport will be limited. The rules are in force for at least 15 days from now.
The government calls for solidarity and to respect each others health. Do you have a cold or flu complaints? Only people with increased risk from chronic or respiratory illness should go to the emergency room. In all other cases, you should stay indoors and take paracetamol. This because the hospitals are overcrowded at this moment with people in real need. It is of course very important to take maximum care of your personal hygiene and not to infect other people if you think you might be infected.
From Monday on many supermarkets will take extra measures to guarantee the safety of their workers and to avoid unnecessary hoarding of food.
Please pass this digital information on to people (like friends, family, holiday makers, renters, etc.) in Spain that might not follow the Spanish news.
Of course C&D Solicitors wishes you all good health. We hope that we all can stay positive and cooperative despite of the inconvenience as there are many Spanish professionals doing there very best to keep us all safe.
The team of C&D Solicitors, laywers in Torrox (Malaga / Andalusia)
The wastewater purification in Malaga, financial and environmental consequences
With this article, I am detracting from the usual ones of a more legal nature, aimed at foreigners, resident or non-resident, who own a home in Malaga. In this post, I attempt to analyse the situation of wastewater purification in terms of the most significant tourist municipalities in Costa del Sol, as well as the financial and environmental consequences that lack of purification entails for municipalities like Nerja and Coín. I also focus on properties on rural land and the purification required for homes wishing to obtain a DAFO.
Introduction wastewater purification
With environmental sustainability or the environmental impact of our lifestyles being such an important issue in our times, I would like to speak my mind about the great problem of faecal water purification in the province of Malaga in general, even through it is sadly extensible to most regions in Spain, in population centres both large and small. However, Malaga, as a top tourist destination and due to its population density, especially along the coastline, should have an infrastructure that mitigates the environmental impact caused by all of us who live on the shore.
Many of our clients, both resident and non-resident, who are thinking about purchasing a home in Andalusia and that we provide advice to, are attracted by the Mediterranean Sea that bathes our shores but on which we indiscriminately dump millions of litres of unpurified wastewater. A recent article in La Opinión de Málaga on 5 January stated that Malaga dumps 123 million cubic metres of wastewater into the sea every year, a real atrocity.
National problem, million-euro fine
On 15 February, El País national newspaper published an article informing that, until that date, Spain had paid about 32.70 million euros in fines due to not complying with the wastewater treatment directive in municipalities with over 15,000 inhabitants. This has been the highest fine paid by Spain to the EU in history.
This breach of the directive led to a conviction from the European Court of Justice and the resulting fine being imposed by the European Commission. This fine continues to grow for as long as those 17 municipalities fail to treat their wastewater, an obligation that came into force in 2001, which means almost 19 years have passed since that directive was enacted.
Nerja, beautiful beaches with faecal waters
One of the many municipalities that have been fined and do not have a sewage treatment plant is Nerja. It is striking that this municipality, which such beauty and such great beaches and cliffs, in 2020, is still dumping the sewage it generates directly into the ocean, through a collector located 1,200 metres from the coast.
Nerja has spent over 20 years on the project for its sewage treatment plant and even though it seems that this year may finally mark the end of the works, according to an article in Diario Suron 6 January (fingers crossed), this does not detract from the sloppiness and lack of interest of the local and regional government have displayed about this project.
The situation is so obvious from an environmental standpoint that, following several complaints, the prosecutor’s office brought judicial proceedings against senior officials of the Nerja City Council for the illegal dumping of this untreated wastewater. One of the toxicology reports certified that all samples taken from five beaches in Nerja contained faecal organisms according to their tests.
Construction of the Nerja treatment plant was declared to be of public interest by the Government in 1996 but, 23 years later, it has not yet been completed. If you visited Nerja and the surrounding areas in 1996, you could see the large number of works that did get started and completed because there were many years with large capital movements but the faecal water purification plant was not so lucky. Other municipalities on the eastern coast, such as Torrox, Vélez Málaga and Rincón de la Victoria, do have a sewage treatment plant in operation.
Mouth of the Guadalhorce, a natural site with a “faecal” river
Another area that also presents a high degree of pollution due to illegal dumping is the mouth of the Guadalhorce river in the city of Malaga. This enclave is the last unspoiled beach in the city of Malaga and is home to a very significant ecosystem of flora and fauna, with a network of trails to move through it. However, in this river, municipalities as large as Alhaurín el Grande and Coín dump their untreated faecal waters, which also led to a fine being paid by the government of Spain.
The city of Malaga has reinvented itself as a multicultural European city, currently highly appreciated by foreign tourists due to its many urban development projects, mostly in real estate. But Malaga is unable to commit to a project in the mouth of the Guadalhorce, which could affect this unique space –as it is the last unspoiled one– to preserve its environmental value.
It is non-profit associations that are reforesting and trying to preserve this space altruistically, as our firm was able to witness during the conference we held with some of them last November.
The municipality of Coín, a peculiar case
For the town of Coín to be able to connect to the treatment plant in the lower Guadalhorce, it is necessary to build the 3 kilometres of collectors that were destroyed by the torrential rains in autumn 2018 but the Andalusia Council, along with the contracting company, continue to fight to decide who will pay for these repairs. Coín is also immersed in legal proceedings due to its failure to treat its wastewater. While the administrations argue, this collector continues broken and the faecal water from Coín is dumped directly into the Guadalhorce river.
Isolated homes and their regularisation through DAFO, a bad focus of faecal waters
Even though compared to large population centres, the impact of these homes is lower, it should be noted that there are many isolated homes existing in Malaga. In La Axarquía, municipalities such as Alcaucín, Viñuela, Competa, Periana and Torrox have thousands of rural homes, as well as towns in the Guadalhorce valley, such as Coín, Alhaurín el Grande and Alhaurín de la Torre. Likewise, municipalities such as Mijas or Ronda also have many houses on non-urban land.
Among the positive aspects of the DAFO these homes are required to have an individual and autonomous treatment system. It should be noted that this procedure is important for foreigners who buy and sell homes in the province.
What is the problem?
I see that one of the negative aspects is the requirement from the Andalusia Council for properties subject to DAFO to have a watertight septic tank, forbidding septic tanks with a biological filter. This guideline is a serious mistake and its effect is contrary to what is intended, which is to prevent these homes from polluting the land on which they are located.
Properties with a watertight tank habitually require (monthly or more frequently, depending on their use) a tanker to visit the property and empty the contents of the tank, which are then transferred to an authorised waste facility.
What is the alternative?
Allowing the use of septic tanks with a biological filter as a treatment system, as it would not be necessary to empty the tank and water would come out clean and purified. It may be necessary to request authorisation for the discharge point of this clean, filtered water, which could even be used for irrigation but, with this treatment system, a company would only need to clean the tanks once a year, which represents significant savings for owners.
What is happening?
The problem that we find with watertight septic tanks is the economic cost of each emptying, which leads many homeowners to resort to other illegal methods, to avoid inconveniences and economic costs. In many cases, they choose to install a watertight septic tank and, once the technician certifies it, a small hole is drilled at the bottom, through which faecal water is poured into groundwater, thereby dispending with the need to have a truck empty it and making it very difficult for this to be sanctioned.
It is appalling that, in some cities, it has been accepted or assumed that owners will not empty their watertight septic tanks and will drill a small hole in them. I would even dare to say that owners are given such a “solution” to prevent the inconvenience of emptying, as the DAFO only requires having a technician certify the installation of the watertight septic tank and, if a hole is drilled later, no one will notice.
However, with thousands of homes in the countryside, thinking that a truck would need to go empty the septic tank in each of them on a frequent basis, requires being naive or means that the Andalusia Council cares little about these discharges (I lean more towards the latter). I am also not very sure of where these trucks discharge the faecal waters they do collect.
Do not pollute the environment if you process the DAFO for your property
To prevent the situation above, which is absolutely filthy, in some of the DAFO we have processed, we have found this problem and, to prevent faecal waters from being discharged directly into the ground, we have advised owners that, once the watertight tank is installed and certified to process the DAFO, they install one with a biological filter next to it. This way, at least, the water they dump will be clean and not pollute the ground, while the owner will avoid all the financial cost and disruption entailed by emptying the tank periodically.
At least, with the second option, despite not being accepted officially by the Junta of Andalusian and many municipalities, faecal discharge is prevented, which is the main goal when it comes to the environment.
Conclusion
As you probably understand, this issue goes a long way but I believe that, with these few brushstrokes, you can see the general lack of environmental awareness in the administration as well as among many citizens. This is the sad reality.
Tourism in Malaga and the entire Mediterranean area is also not viewed with a perspective for the future, as we live in the short term and do not care for essential things for investors and tourists to continue to come to Malaga, as well as foreigners wishing to purchase a home to enjoy a high quality of life or just spend their holidays in Span.
Meanwhile, those of us who reside and live here most of the time are unaware of the large amount of pollution we generate and the damage we cause to the sea, rivers and streams (which are increasingly polluted). I do not see many complaints or movements among citizens protesting this situation.
Some of the damage is already irreparable but there is some that can be fixed.
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