With regard to Spanish Real Estate Law and in particular buying and selling properties in Spain, you should know that there have been some changes in the law in 2013. Among other new rules, we would like to highlight Law 16/2012 of December 27th , which has modified the Article 254 of the Mortgage Act or M.A. (D. 8/02/1946), adding a new paragraph, number 5, which says:
“5. The Land Registry will not practice the corresponding registration of any document containing any act or contract subject to the Tax on the Increase in Value of Urban Land, without having proof that ( this tax) has been previously submitted and paid, or declared, … “.
As you know the Tax on the Increase in Value of Urban Land (IVTNU), popularly known as ” MUNICIPAL or TOWN HALL PLUSVALIA TAX” is levied on the increase in value of urban land. That value is determined by the Cadastral Value, which will be multiplied by a percentage determined by each Town Hall.
Therefore, when there is a sale or purchase of an urban real estate property, usually this tax must be paid, whether it is an urban land or plot (with or without a building or construction on it), or an apartment belonging to a community where a percentage of the land on which the community is built belongs to each flat.
According to this legal change, as per the new Article 254.5 of the LH, the Land Registry will not register any Purchase Title Deed ( Escritura), if the payment of this the IVTNU or MUNICIPAL or TOWN HALL PLUSVALIA TAX is not proven.
As per the above, now more than ever it is strongly recommended that in a purchase, the buyer and his lawyer, make a retention to make sure that this municipal tax is paid, and a proof of its payment presented along with the rest of the relevant documents to the Land Registry, in order to make sure that the Purchase Title Deed is registered, which is essential for the new owner to get Land Registry protection.
Therefore, if you are going to buy a property, make sure that this municipal tax is paid and the receipt of its payment is shown to the Land Registry, in order to register your name as the new registered owner. If this is the case, and your are selling or buying, our firm can assist you.
The information provided on this website is not legal advice, rather simply transmits legal issues.
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