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ENGLISH SPEAKING LAWYERS IN MALAGA (ANDALUCIA / COSTA DEL SOL) SPECIALIZED IN PROPERTY LAW & CONVEYANCING

Archive for NON RESIDENT

INHERITANCE TAX NOW ALSO THE SAME FOR EU- AND NON-EU CITIZENS

saving for non-EU citizens in the spanish inheritance tax

Spanish inheritance tax now the same for EU- and non-EU members

As we stated in our post in February 2015, on 01/01/2015, the regulations governing Inheritance Tax were amended,  EU citizens began paying the same Inheritance Tax as citizens resident in Spain. From that time EU citizens were able to pay tax in accordance with the regulations of the Autonomous Community where the assets are located. Remember that these regulations are much more beneficial than national regulations on Inheritance Tax, which were applied to EU citizens until that date. This amendment left non-EU citizens out, which were required to continue paying tax according to national regulations.

Supreme Court rules in favour of Non-EU members

However, two judgments of the Supreme Court, in February and March 2018, referring to residents in non-EU countries such as Canada or Switzerland, determined that there would be discrimination contrary to the free movement of capital if non-EU citizens were not allowed to opt for regional regulations in the same manner as EU citizens. Therefore, these non-EU citizens should also be treated in the same manner as EU citizens in terms of Inheritance and Donations Tax, also being eligible to receive regional tax benefits.

We should add that the free movement of capital is enshrined in article 63 of the Treaty on the Functioning of the European Union, which prohibits all restrictions on the movement of capital between Member States and between Member States and third countries, making the limitations for non-EU citizens in terms of Inheritance Tax contrary to the regulations of the European Union.

Since September 2018, the Spanish Tax Agency decided to comply with these rulings and started accepting settlements of Inheritance Tax for non-EU citizens, applying the regulations of the relevant autonomous community to these.

Benefits of tax calculations by Autonomous Communities

This change in tax criteria represents significant savings in terms of inheritance for non-EU citizens, as it should be noted that, in most Autonomous Communities in Spain -including Andalusia-, a widowed spouse, children and descendants, such as grandchildren, barely pay any Inheritance Tax, as they are eligible for significant bonuses. These bonuses in Andalusia were explained in detail in our article from January 2018.

Possibility to reclaim tax until four years back

Suffice it to say that this tax change opens the door to claims from non-EU heirs who have paid Inheritance and Donations Tax over the last few years, if a comparison between national and regional regulations were to show that they paid much more than an EU citizen would have. This claim may be filed provided that the right to claim has not been time-barred, the deadline being established at four years after the payment was made.

Brexit and British citizens

As a last note, considering the consequences of Brexit for British citizens with properties and assets in Spain, fortunately, even if they remain outside the European Union and would be considered non-EU citizens, they would be able to continue to benefit from bonuses and discounts in Inheritance and Donations Tax in the same manner as before.

It should be noted that there are many British homeowners and buyers with properties in Spain and, at least, their heirs will not be harmed in terms of taxes payable in a future inheritance procedure.

 

Author: Gustavo Calero Monereo, C&D Solicitors (Malaga, lawyer)

SPANISH INCOME TAX RETURN FOR NON TAX RESIDENTS (IRNR)

Time for payment your income tax for non residents in Spain (IRNR)

Time for payment your income tax for non residents in Spain (IRNR)

If you are a non-resident in Spain and own a property there, you are liable to Spanish Income Tax for Non-Residents payment (Spanish IRNR). This issue was already considered in former article on our website.

You would have to pay this year the IRNR income tax for non-residents of 2015. This means if you owned, bought, sold or inherited a Spanish property in 2015 and you are NOT a fiscal resident in Spain, then you are obliged to pay your yearly IRNR income tax for non-residents this year (Impuestos sobre la Renta de No Residentes). As a service to our costumers C&D offers to take care of this tax application and its payment through direct debit before the end of this year.

When a property is owned by a married couple or several persons, each of them becomes an independent taxpayer, so that they should file tax returns separately according to the ownership interest they have on this property.

This tax duty needs to be done before the 31st of December 2016. If you want to pay through direct debit, though, it needs to be submitted before the 22nd of December 2016. The tax liability will be calculated with the tax information of your property following the cadastre registry, usually the tax payment it isn’t going to be so much.  If you miss this obligation you could be fined by the Tax Authorities.

Tax form 210 is used to pay this tax and it can be downloaded from the official web of the Spanish Tax Authority (A.E.A.T.). It is worthy mentioning that it is not easy to understand them.

Our office is currently dealing with the IRNR season 2015. The deadline to file this tax return expires on the 31st of December of this year. Although if you want to place the payment as a direct debit in your bank account the form must be filled before the 22nd of December.

 

If you want to hire our services for this tax duty, we will be pleased to help you.

 

Author: Francisco Delgado Montilla, C&D Solicitors (lawyers)
Torrox-Costa (Malaga/Costa del Sol/Andalucia)

INHERITANCE TAX IN SPAIN: WE ARE ALREADY EUROPEAN!

Inheritance tax in Spain

Inheritance tax in Spain

In our post of last March on Inheritance and Donation Tax, we discussed about the fact that European non-resident citizens in Spain were experiencing discrimination against resident citizens, because, under the same circumstances, they had to pay more taxes than resident taxpayers.

This unequal treatment happened when the deceased or beneficiaries were non-resident in Spain and they paid taxes in conformance with a State regulation which was more detrimental than the regional one, which was only applied to resident citizens.

This discrimination was confirmed by the European Court of Justice ruling dated 03rd of September 2014, which resolved this issue and established that Spain was infringing the free movement of capital within the EU, because of this separate treatment between resident and non-resident citizens.

On the 1st of January 2015, in order to comply with the aforementioned judgment, the amendment of the State Inheritance Tax regulation has entered into force in Spain. A special scheme has been introduced in regards of the Inheritance Tax, so that non-resident citizens in Spain who are European residents may apply the regional regulation as residents already do, equating their situation.

This new regulation establishes that in the event that the deceased is a European non-resident in Spain, the European non-resident beneficiaries may apply the regional regulation where the most valuable assets are located in Spain. If the beneficiaries are resident in Spain, the regional regulations where they reside shall be applicable.

If the deceased has been a resident in a Spanish region and the beneficiaries are non-resident in Spain, the non-resident beneficiaries shall pay inheritance tax in conformance with the regional regulations where the deceased resided.

At this point, it is worth mentioning that the collection of the Inheritance and Donation Tax in Spain is assigned to regional governments, so that they are free to set forth their own regulations.

The effect of this assignment is that the amount to be paid for this tax by Spanish residents may significantly vary depending on the region where they live. In fact, a fiscal “war” has arisen between regional governments as regards of this tax, because some people have decided to establish their residence in regions with a more favourable tax scheme in order to pay fewer taxes for inheritance and donations, particularly those with more valuable estates.

The most recent and famous case in Andalusia was that of the late Duchess of Alba, who was sentimentally related to Andalusia but not fiscally, because her residence for tax purposes was in Madrid. The main benefit of this fact is that her beneficiaries have had a tax saving of more than 90 million Euros in the Inheritance Tax.

Since non-resident citizens will also enjoy the same Inheritance Tax regulation than resident citizens and considering that the regulation to be applied is that of the region where the most valuable assets are located, this unequal treatment between regions will also affect them.

However, imagine that you are a non-resident in Spain, do not have any property, but you have some money in a bank entity in Spain. In this case, which regulation shall be applicable for your beneficiaries? It seems that the applicable regulation shall be that of the region where the bank registered office is located. Thus, it is not the same a bank entity with registered office in Madrid, Barcelona or Seville, for instance. It has been said “it seems” above, because a definitive answer has not been obtained when contacting the Tax Administration Office in respect of this issue.

In short, these are good news for European foreign citizens and their beneficiaries, and welcome to the regional regulatory “chaos” in respect of Inheritance and Donation Tax.

 

Author: Gustavo Calero Monereo, C&D Solicitors (lawyer)

Torrox-Costa (Malaga/Costa del Sol/Andalucia)

SPANISH GOLDEN VISA FOR NON-EUROPEAN RESIDENTS

Golden Visa Spain

Golden Visa Spain

During our stay at the Second Home fair in Utrecht this March we received several questions about the new Spanish ´Golden Visa´ (or ´Investor Visa´) from professionals with wealthy clients in China and Africa. With the rapidly growing middle and upper-class in these new economies, these questions are rather interesting for us as a law firm specialized in property law / conveyance.

With this new investor visa law the Spanish government tries to attract foreign investors in order to stimulate the national economy, to give an impulse to the real estate market and to create more jobs. Politicians up to now are rather enthusiastic, as up to the 14th of April already 661 Golden Visa were granted to investors from China, Singapore, Japan, the United States, South America, the Middle East and Russia. With this article we´d like to inform you about the details of this Spanish law that became active on the 27th of September 2013.

Non-European residents can apply for the Golden Visa under several conditions. The ‘cheapest way’ for them is to buy a Spanish property with a purchase price of over € 500.000. But there are more options for the lucky few that can financially afford to immigrate to Spain. Investing in Spanish companies with shares of € 1.000.000, or having a Spanish bank deposit in Spanish financial entities of the same amount of money, will also do.

There is another option for obtaining a Golden Visa, which is buying Spanish bonds / public debt titles with a worth of € 2.000.000 or more (minimal duration 5 years). In addition, it´s also possible to obtain the Golden Visa by starting a business activity in Spain with a significant worth to the national economy, such as job creation, socioeconomic improvement or scientific/technology innovation. Of course, this officially needs to be approved by the Spanish administration (Economical and Commercial Office). The last option concerns high qualified professionals or transactions within the same company (issued by the Big Companies and Strategic Group Unit).  The condition, of course, is that these professionals can´t be found on the Spanish employee market.

The rights of the residence permit apply to the permit holder and his spouse, children up to 18 years and also -due to health reasons- dependent parents or children over 18 years.

The Golden Via is granted for one year (a normal tourist’s visa only lasts for 90 days) and is renewable for two years, after which another two more years can follow (as long as the investment maintains). After these 5 years you would be entitled to apply for a long-term residency, but this permit will not be granted automatically. The requirement here for is that the applier has lived in Spain legally and effectively for five years, which means that within these 5 years he hasn´t lived abroad for more than 6 months consecutively and for not more than 10 months in total.

Of course, along with the permission comes a set of demands, of which the following are the most important. The person may not have stayed illegally in Spain before, can´t have a criminal record in Spain (o due to the Spanish legal system in the last 5 years) and he needs to have sufficient economic recourses for his (and his family´s) stay in Spain. It´s not obligated to have a tax residency within Spain, though, which makes the Golden Visa even more attractive for foreign investors.

 

Author: Francisco Delgado Montilla, C&D Solicitors (lawyers)
Torrox-Costa (Malaga/Costa del Sol/Andalucia)

 

SPANISH INHERITANCE TAX: POSSIBLE CONDEMNATION AND CHANGES

Did you pay too much Spanish inheritance tax?

Have you paid too much Spanish inheritance tax?

Last 27th of March 2012, the European Commission pursued an action against Spain for the breach of the Treaty on the Functioning of the European Union and the Agreement on the European Economic Area, as a result of the discrimination in respect of the Spanish inheritance and gift tax, since non-residents pay more taxes than residents under the same personal conditions.

Spanish inheritance tax is managed by Spanish autonomous regions, so there are significant differences from one region to another in respect of this taxation. Each regional administration has regulated this tax in a different way. However, if the taxpayer is a non-resident, the Central State Tax Administration Office is the competent body to collect this tax payment instead of the regional government tax office. Regional government regulations are much more favourable for taxpayers than central government tax rules, since regional administrations have established tax exemptions and reductions for the inheritance and gift tax.

However, these discriminatory situations between residents and non-residents in Spain also arise between residents of the different autonomous region. In fact, last 8th of May 2013, a court order from the Spanish Supreme Court established the illegality of the inheritance regulations of the Valencian autonomous region, because these regulations allow heirs residing in this region to benefit from tax reductions against those residing in other Spanish regions who do not enjoy from this benefit.

It is expected that in the future the Spanish Constitutional Court itself rules in this respect. Furthermore, upon consideration of this inequality legal situation, it is likely that the inheritance tax may be reformed in the medium and long term in order to balance differences among the different Spanish autonomous regions.

Regarding the action against Spain, last 8th of January the hearing for this proceedings was held before the Court of Justice of the European Union. It is very likely that a judgment may be pronounced in a few months in regards of this case. If this court order condemns Spain because of this discrimination, it may give rise to a right for reimbursement of undue taxes paid to all those non-residents in Spain who paid in the last 4 years the Spanish inheritance and gift tax, provided that this payment had been higher than the tax payment corresponding to residents belonging to this Spanish region under the same circumstances.

Taxpayers may claim within 4 years. This period starts to run from the date of tax payment. For this reason, in the event of a possible ruling condemning Spain in this regard in the following months, it is very important that all those non-residents in Spain, who paid inheritance and gift tax in the last 4 years,  check if their payment was higher than the one made by a resident in the same Spanish region. If that were the case, they should claim for the refunding before the end of this 4 years period. Once this period expires, they will not be entitled to it. The submission of this tax refund claim shall stop the 4 years expiry date while it is decided if Spain is condemned for this issue.

Our law firm is at your disposal to assist you in this matter. We would offer you our service on the basis of a “no win-no fee agreement” for the submission of the aforementioned tax refund claim before the Tax Authorities, that is, you would pay nothing to us if the public administration declines this first claim.

 

Author: Gustavo Calero Monereo, C&D Solicitors (Lawyers)
Torrox-Costa (Malaga/Costa del Sol/Andalucia)

HOW TO AVOID TAX PENALTY FOR NON-RESIDENTS OWNING A SPANISH PROPERTY

Avoid penalty non-residents owning Spanish property

Recently, some of our clients have received notifications at our law firm from the Spanish Tax Office demanding the submission of a copy of their Spanish Income Tax return for fiscal Residents or their Income Tax Return for Non Residents with properties in Spain, which are compulsory to be filed in these cases and considering that Spanish Tax Authorities know they own or have owned a property in Spain.  Warning that failure to do it will be fined or will give them a penalty. This issue was formerly considered in a previous article published on our website.

These notifications are referred further back in time, that is, Tax Authorities request the submission of the aforementioned returns, whether they are fiscal residents or non-residents in Spain, for these years in which they have been owners of these properties. For example, we are recently dealing with a case in September in which Spanish Tax Authorities are demanding the last and enforceable Income Tax returns for Non Residents—Spanish IRNR— for the years ending 2008, 2009, 2010 and 2011.

By means of these notifications, a tax management procedure is initiated aimed at controlling the submission of tax returns, self-assessments and data communications which are compulsory by law. By means of this procedure, Tax Authorities try to carry out the regularisation steps corresponding to these cases where taxpayers have failed to meet their tax liabilities, because they have not submitted their Income Tax returns for fiscal Residents (Spanish IRPF) or Income Tax returns for Non fiscal Residents (Spanish IRNR). You can get access to further information in English from Tax Authorities about these and others tax obligations for non residents at the Agencia Tributaria website.

It is also worth mentioning that the reception of these notifications, when they are duly served, suspends the limitation period in which Tax Authorities are entitled to recover what is claimed and for the periods referred in the notifications. In addition, they also suspends the limitation period to impose tax penalties resulting from the regularisation procedures applied to cases which are not subject to law. The aforementioned notification and subsequent settlement are accompanied by a tax penalty.

On a recent visit to the tax office in Velez-Malaga, the official in charge of these matters confirmed us that it has been sent more than a thousand of such requirements during this month and last August, only for some locations in the region of the Axarquia.

Against this background, if you find yourself in this situation—you are a Non Resident in Spain owning a property in Spain, whether you have received this type of notification from the Spanish Tax Authorities or not, you may receive it in the near future. Thus, C&D Solicitors recommend you to normalise your situation as soon as possible by submitting every Income Tax returns for Non Residents for the last 4 years in which you have owned a property in Spain. This may prevent you at lease from paying the financial penalty which accompanies the aforementioned notifications.

 

Author: Francisco Delgado Montilla, C&D Solicitors (lawyers)
Torrox-Costa (Malaga/Costa del Sol/Andalucia)

 

INHERITANCE TAX IN SPAIN AND NON RESIDENT TAXPAYERS: problems and prospects for the future

Discrimination non-residents inheritance tax

Discrimination non-residents inheritance tax

Currently, non-resident taxpayers face two major problems in respect to the payment of Inheritance Tax in Spain:

1. Discrimination: non-residents pay much more taxes than residents.

2. Double taxation: this tax is payable in two different countries for the same inherited property.

Discrimination

In Spain, taxes are paid for inheritance between non-residents—even though they are immediate family members, spouses, parents, children…, upon application of the government regulations, that is, a progressive scale of taxes based on the transferred property value.

However, regarding inheritance between residents—immediate family members—taxes are much lower or even not paid, as a result of the application of regional government regulations which provide very important tax exemptions.

In respect to inheritance between family members who are not immediate (siblings, uncles, nephews, etc…) and between non-family members, very high taxes shall be paid by both residents and non-residents. In this respect, there is no discrimination.

Upon consideration of this discriminatory unfair condition, it is necessary to inform that the European Commission is putting pressure on Spain to avoid this discrimination, as it is contrary to the free movement of persons and capital, one of the basic principles of the EU single market. This fact may provide a significant reduction of the inheritance tax for non-residents, at least for EU residents, because, otherwise, periodic penalty payments may be imposed to Spain.

There are some examples which can guide you to understand this issue over the figures.

Double taxation

Significant cases of double taxation are also occurring. For example, non-resident heirs are bound to pay a high inheritance tax in Spain for inherited property in Spain (money or real estate) and they shall also pay inheritance tax on the same inherited property in the country where they reside, without deduction of the taxes paid in Spain.

The problem is that Spain only has a convention for the avoidance of double taxation with France, Greece and Sweden for inheritance purposes. Double taxation conventions with United Kingdom, Germany, etc… only refer to income tax and property tax, so that double taxation conditions may occur in relation to inheritance tax.

Accordingly, the UE presented last year a global package regarding inheritance tax system just to avoid these two problems of discrimination and double taxation mentioned above.

 

At this stage and regarding that these serious problems seem to be at least in the process of being resolved in the medium term, C&D Solicitors would like to make the following recommendations:

1. If anybody loses a relative before regulations are modified and is bound to the payment of a high and discriminatory inheritance tax, a procedure could be initiated requesting the refund of the excessive tax which has been paid.

2. It is not appropriate at this moment to hurry and carry out certain actions in order to avoid or reduce inheritance tax in the future—gift inter vivos, contribution to companies, etc. These transactions may involve significant tax consequences to be analysed and as result of them you may pay now higher taxes than taxes to be saved in the future.

C&D Solicitors would rather advise you to make a will for your properties in Spain. This would be an early solution to the above mentioned problems.

“It is an unfortunate fact of life that eventually we all die. It is also unfortunate that no one can predict when that will be. It is because of these two certainties that you are never too young to make a Spanish Will.”

 

 

Author: Francisco Delgado Montilla, C&D Solicitors (lawyers)
Torrox-Costa (Malaga/Costa del Sol/Andalucia)

 

 

TAX EXEMPTION WHEN BUYING A PROPERTY BEFORE 31/12/2012

Tax exemption capital gain tax sale

Tax exemption capital gain tax sale

Regarding the current financial situation, which is reflected in the drop of property sales in Spain every three months, the Spanish Government has passed a new tax exemption. This exemption tries to promote the sale of properties and may become very interesting for both individuals and bodies corporate considering buying a real estate property in Spain in the short term, whether they purchase commercial premises, homes, offices, garages, plots, storage rooms, etc.

On the 12th of May 2012, the Central Government passed the Spanish Royal Decree-Law 18/2012 of 11th of May on the restructuring and sale of the property assets of the financial sector. This regulation included in its First, Second and Third Final Provisions the tax exemption for bodies corporate and individuals, whether resident or non-resident in Spain. This reform law allows all those buying a property from the 12th of May 2012 till the 31st of December 2012 to pay taxes only on the 50% of the capital gains when selling the property subsequently, whether in 1, 5, 10…etc years, while the remaining 50% is free of charges.

This exemption may save an important amount of money, because if a property is currently sold in Spain, capital gains are taxed at 21% for non-residents (19% from 2014), at 27% for resident taxpayers in Spain (21% from 2014) and at 30% for bodies corporate.

Here we present an example: imagine you are thinking about buying a property in Spain considering the current market opportunities; the price for this property may be EUR 200,000; the following eventual scenarios may occur according to the date of purchase when selling this property, for example, in 2017 for a sale price of EUR 270,000:

1) Non-resident taxpayers: EUR 70,000 of capital gains at 19% makes a total payment of EUR 13,000; if the purchase is performed before the 31/12/2012, the total payment would be EUR 6,650.

2) Resident taxpayers: EUR 70,000 of capital gains at 21% makes a total payment of EUR 14,700. If the purchase is performed before the 31/12/2012, the total payment would be EUR 7,350.

3) Corporate: EUR 70,000 of capital gains at 30% makes a total payment of EUR 21,000. If the purchase is performed before the 31/12/2012, the total payment would be EUR 10,500.

Obviously, this tax saving is not definitive in order to decide whether to buy a property or not in Spain, as it is not possible to know whether prices may go down much more nor the gains resulting from the eventual property sale. However, this fact may be a helpful factor to take a decision for those considering buying a property, especially for those non-speculative potential buyers whose main purpose is to enjoy this property for many years; thus, the longer they own the property, the greater the capital gains may be when selling it. Look at the figures and draw your own conclusions.

 

Author: Gustavo Calero Monereo, C&D Solicitors (lawyers)
Torrox-Costa (Malaga/Costa del Sol/Andalucia)

 

TAX EXEMPTION WHEN SELLING YOUR PROPERTY IN SPAIN

Spanish tax exemption CGT seller 65+

Spanish tax exemption CGT seller 65+

The Spanish Constitution and the regulations (tax and social) developed thereof, regarding the protection of the elderly, guarantee that the elderly will receive a comprehensive system of care and protection that promotes and enhances the wellbeing of this section of the population, within which this article highlights the area of economic protection.

The purpose of this type of protection is to formulate a system of regulations that provide the elderly with the necessary economic resources, which will contribute towards their independence and improve their quality of life.

As principle provisions or benefits within this economic protection of the elderly, we can highlight, among other things: retirement pensions (contributory and non-contributory), supplementary economic provisions, various subsidies and aid, which is granted within the scope of Social Services, as well as certain tax benefits.

In relation to this matter, this article will focus on the exemption from capital gains, which, for those over 65, occurs at the time that their habitual residence is sold.

Gains derived from the transfer of immovable property are taxed, for non-residents, at a fixed rate of 19%. For residents, the first €6,000 is taxed at 19% and the rest is taxed at 21%.

Moreover, in the case of the transfer of property by a non-resident, the purchaser shall be obliged to withhold and pay 3% of the sale price as payment on account of taxes which should meet the requirements of capital gains for non-residents and that should be paid directly to the Tax Authorities. Said retention from the sale price is not incurred if the seller has the right to tax reduction for the transfer of property that is their habitual residence, for those over the age of 65.

Article 31.4 b) of Law 40/1998, which regulates personal income tax, establishes that  those over the age of 65 shall be exempt from capital gains in the event that the property transferred is their habitual residence.

The only two requirements for eligibility for this tax exemption are the following:

  • The taxpayer must be over 65 at the time that the transfer takes place.
  • The transferred property must be their habitual residence. In order that the property be considered a place of habitual residence for the purpose of this tax, two temporal limits are established: 1) it must be effectively occupied by the taxpayer within a period of 12 months from the date of acquisition or from the termination of any building work; 2) it must constitute their place of habitual residence for an on-going period of at least three years prior to the date of sale.

 

 

Author: Francisco Delgado Montilla, C&D Solicitors (lawyers)
Torrox-Costa (Malaga/Costa del Sol/Andalucia)

 

 

DRAFT OF THE DECREE ON THE LEGALIZATION OF HOUSING ON NON-DEVELOPABLE LAND OF ANDALUSIAN REGIONAL GOVERNMENT

Legality houses non-developable land Spanish countryside

Legality houses non-developable land Spanish countryside

Three weeks ago, we received in our offices a copy of the draft implementing Decree of 20th of June 2011, which regulates building and scattered rural settlements on non-developable (non-urbanizable) land in Andalusia.

This draft is supposed to be created as an attempt to regulate the situation of a large number of properties located on non-developable (non-urbanizable) land in Andalusia, where criminal or administrative proceedings cannot be filed against them for land development liability, because the offense or infringement is extinguished by prescription. The Andalusian Regional Government is partially responsible for this situation, as they have not protected or controlled the legality regarding land developments of municipalities for many years. Meanwhile, they have collected the profits from the transfers of title ownership by means of the transfer tax.

Regarding the draft of the Decree, the concept of constructions assimilated out of ordination is not understood. The use and enjoyment of these constructions can be exercised, but a complex administrative procedure is established, so that the city councils certify the security and necessary facilities for the use and enjoyment of these properties. However, the resolution to this procedure shall never mean the grant of the First Occupancy License, neither the owner’s rights shall be recognized to be exercised before any administrative or criminal proceedings (article 7, section 6 of the Decree).

If the use of housing is recognized and regulated to preserve the rural area, the environment and the scenic value where the construction is located, then, why the First Occupancy License is not granted when the owner is enjoying the property? What does “non-recognition” mean before any court proceedings? As a result, it could be understood that in the event of court proceedings, this recognition of assimilated housing shall not have any legal “value” for these proceedings, that is to say, legalization or regulation does not exist.

Maybe, the problem is based in the creation of the concept “assimilated to out of ordination, which was incorporated by the Decree on Urban Discipline of Andalusian of 2010 and its implementation.

Furthermore, an additional problem arises, as the Land Registry jurisdiction belongs to the Spanish Government. As a result, the State legislation should firstly include this legal concept of “assimilated out of ordination” within its rules in order to authorize the registration in the Land Registry of any administrative action which establishes a construction under the consideration of this concept. Nowadays, the only existing concept is “out of ordination”, but nothing is referred to constructions “assimilated” to these ones. Then, the Regional Government is not authorized to establish the access or registration in the Land Registry, as this jurisdiction belongs to the Spanish Government.

Lastly, in many Andalusian municipalities as the Axarquía region, thousands of isolated houses have been built on non-developable land under the corresponding construction permits. Then, it does not seem coherent that differences in treatment are not considered for these owners acting in good faith, regarding these municipal permits they were granted. This draft of the Decree does not include any reference to them; therefore, the legal situation of the constructions with permits equates with these other constructions without permits.

In conclusion, regarding the content of the draft, legalization or regulation of properties located on rural land is not incorporated; no legal novelty is provided to solve out the problem resulting from the lack of control of Public Administrations regarding the use of land; this law only complicates even further the current situation of this issue.

 

Author: Gustavo Calero Monereo, C&D Solicitors (lawyers)
Torrox-Costa (Malaga/Costa del Sol/Andalucia)

 

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