On November 9, Royal Decree-Law 26/2021, of November 8, was published in the BOE, which adapts the revised text of the Local Tax Regulatory Law to the recent jurisprudence of the Constitutional Court regarding the ' Tax on the Increase in Value of Urban Land, the well-known municipal capital gain.
This Royal Decree-Law approves the new regulation to calculate the Tax on the Increase in Value of Urban Land (IIVTNU), given that the aforementioned Judgment of the Constitutional Court declares the unconstitutionality, exclusively, of the method of calculating the tax base of that tax.
The judgment also expressly establishes that it is not possible to request the rectification of self-assessments submitted prior to October 26, 2021, against which rectification had not been previously requested, nor of settlements and tours, which were not contested. , prior to that same date.
Since when will the new regulations apply?
Its entry into force took place on November 10, and although the City Councils will have to adapt their tax ordinances in the next 6 months, until now they will be able to settle the tax in accordance with what is established in the Decree-Law.
Will it be retroactive?
No, it will not have retroactive effects, so that the operations carried out between 10/26/2021 and 11/10/2021, when the Royal Decree-Law came into force, in principle will not be subject to the aforementioned municipal tax.
Nor, in principle, are cases that correspond to taxable events prior to these dates and that have not been settled (for example: inheritances pending acceptance) are subject to this tax.
What changes are introduced?
1) The first novelty introduced is the taxation of capital gains generated in periods of less than one year. The RDL imposes the taxation of those operations of sale, inheritance and donation, as long as they generate a capital gain, even if a year has not elapsed since their last transmission.
2) The second novelty is the possibility of choosing between two systems, because that is how the Constitutional Judgment itself imposed it when determining that the calculation of the capital gain could not be limited to a single method. The two systems that are articulated are the so-called objective and the one that responds to the really generated surplus value.
- “Objective” system: it is the same as that up to now has been applied, it consists in that the taxable base of the tax is the result of multiplying the cadastral value of the land at the time of accrual, but applying new coefficients that are already set by the Decree itself and that they will be updated, limiting the capacity of the Town Councils when approving them, since they will only be able to correct them downwards (up to 15%) depending on their degree of updating.
- “Real Capital Gain” system: which can be used in those transfers of a property in which there is land and construction. Here, the real capital gain of the land will be equal to the difference between the sale price and the acquisition price after applying the proportion that represents the cadastral value of the land over the total cadastral value. That is, it will be taxed based on the real capital gain obtained at the time of the transfer of a property and that will be determined by the difference between the transfer value of the land and the acquisition value. If the taxpayer shows that the real capital gain is lower than that resulting from the objective estimation method, he may apply the real one.
These calculations may be subject to verification by the Town Councils, according to another novelty that the standard introduces.
Will I have to pay taxes even if there is no capital gain?
No. The Royal Decree-Law also fulfills the mandate of the Constitutional Court in its Sentence 59/2017 of not subjecting to tax those situations where there is no increase in the value of the land. To do this, a new assumption of non-taxation is introduced for operations in which it is found, at the request of the taxpayer, that an increase in value has not been obtained.
What will I have to do to avoid paying taxes if I have no capital gain?
The interested party must prove the non-existence of an increase in value by declaring the transfer, and must provide all the documents related to the transfer and acquisition. To verify the non-existence of an increase in value, the transmission or acquisition value will be taken as the one that is greater than what appears in the title that documents the operation or the one verified, where appropriate, by the Tax Administration, in accordance with the new faculty that is granted to the Town Halls.
The Supreme Court has ruled that banks must pay the mortgage loan appraisal expenses, as established by the Plenary of the Civil Chamber of the National Court. In this judgment, the court decides on the economic effects of the declaration of nullity of the expense clause of mortgage loans between banks and consumers.
The Supreme Court concludes that the appraisal expenses, when Law 5/2019, of March 15, regulating real estate credit contracts, does not apply to the bank and not to the consumer. This resolution only affects loans signed before that 2019 rule, since the Real Estate Credit Law approved two years ago does establish that the appraisal must be paid by the borrower, that is, the consumer.
With this ruling, all the consequences of the nullity of the clauses that impose the costs of formalizing the mortgage loan on consumers are resolved by the Civil Chamber.
Right to restitution
This doctrine assumes that consumers are entitled to the restitution of all expenses paid for the registration, administration and appraisal of the property, as well as half of the notarial expenses.
Only the Tax on Documented Legal Acts, in which the tax regulations establish that the main taxable person is the borrower, is borne by consumers. The magistrates have studied an appeal against a resolution of the Provincial Court of Cáceres in a lawsuit with Liberbank.
After hearing the sentence, the legal co-director of the consumer portal "the plaintiff", Almudena Velázquez, considers that the resolution is "consistent" with the provisions of the Court of Justice of the European Union. In fact, the Supreme Court is based on the affirmation of a judgment of the CJEU, which concludes that this clause now analyzed is “abusive”.
The higher court considers that the appraisal should be part of the management costs and, therefore, and based on jurisprudence, the lender, that is, the banks, must take charge. “The so-called appraisal expenses are the appraisal cost of the property on which the mortgage guarantee is intended to be constituted. Although the appraisal does not constitute, properly, a requirement of validity of the mortgage, the law requires for the direct judicial execution of the mortgage, among other requirements that “in the deed of incorporation of the mortgage the price at which the interested parties appraise the property or mortgaged property, to serve as a typology in the auction, which may not be less, in any case, than 75 percent of the value indicated in the appraisal ”.
When it comes to buying a home, few are the lucky ones who can do it in cash, and most of the time we will need a loan. To be more specific, we will have to request a mortgage loan that will also accompany us for decades. Therefore, it is very important to do a good job of selecting to find the best mortgage.
Here are some tips:
1. Having something saved is key to obtaining good conditions.
In the process of buying a home you have to keep in mind that you will have to face some notary fees and taxes. These expenses can be around 10% of the value of the home you are buying, and will be added to the amount you will need to buy the home. On the other hand, most of the entities offer by default mortgages for 80% of the value of the house. In fact, they usually choose the minimum value between the appraisal and the purchase value. For example, if you want to buy a property for € 110,000 and it turns out that the appraisal gives it a value of € 100,000, the bank will offer you a € 80,000 mortgage (80% of € 100,000, in this case the appraisal was lower of the purchase price).
For the negotiation with the bank and the conditions to go in your favor, ideally you should have saved 30% of the value of the home you want to buy (10% constitution, notaries, taxes, and 20% to pay the apartment and leave only 80 % of its value pending coverage).
2. Fixed, variable or mixed interest?
In general, it is best not to play at guessing the future because, as the Nobel Prize winner in Physics Niels Bohr said, "making predictions is very difficult, especially when it comes to the future."
The only modality that does not depend on the future is the fixed rate mortgage, the others will be indexed to something. The most common will be the Euribor, right now the Euribor has a very low interest rate (so much, that it is negative), but a little over 6 years ago it reached more than 5%, and this can happen again because it was not something exceptional. Therefore, the interests of a variable rate mortgage can vary a lot.
The one you have to run away from is the mixed interest rate. It is a new modality in which the bank combines the worst of fixed rate mortgages and the worst of variable rate mortgages in a single mortgage. Its offer is usually that the first years you are offered a fixed rate ("for your peace of mind") and in the future it will go to variable.
This works totally against you. The Euribor is low now, and is expected to rise in a few years. So the opposite suits you. Variable mortgage now to take advantage of the low Euribor, and a fixed interest rate mortgage in the future to avoid surprises with the Euribor.
3. Be careful, the interest rate is not what you have to look at.
The mortgage is something that will accompany us for many years. You have to look at the fine print and don't just get carried away by the interest rate they offer you. You have to ask them for the T.A.E.
In most cases, to offer you the best conditions, the bank "invites" you to contract with them the home insurance, the life insurance, have the payroll with them, hire them a pension plan, etc ... For each of The products you hire will be offered a discount on the interest rate (for example, if you take out life insurance, they give you a reduction of 0.25%).
These products have an added cost and insurance is usually more expensive when contracted with the bank. The T.A.E. is the interest rate resulting from adding the costs of contracting products to the bank to the base interest rate of the mortgage.
To compare mortgages, always use the T.A.E., since each bank will ask you for different conditions to contract the mortgage. The T.A.E. it is the only way to compare pears to pears. Never compare mortgages based on the interest rate offered.
4. Find balance.
The longer the term of your mortgage, the lower the monthly payment. But you should also keep in mind that the longer the term, the greater the amount of interest you will have disbursed. As an example, if you take out a € 200,000 30-year mortgage at 2% interest, you will end up paying € 65,500 in interest.
If, on the other hand, you do it for 10 years, the interests are reduced to € 20,600. We must find a term that allows us to comfortably face the monthly bill, but always trying to keep the term as low as possible.
In mortgages it is very important to search and compare as much as you can. You can save a lot of money!
TECHNICAL INSPECTION OF BUILDINGS. ITE
The purpose of the Technical Building Inspection is to certify the health of the building, indicating and determining its deficiencies as well as guiding the owners on what actions to carry out in their buildings.
This visual inspection of the building must be carried out by a competent technician, who is an architect, technical architect, surveyor, building engineer or a graduate in building science and technology. This professional issues a standardized document that describes the general characteristics of the building, state of conservation and visible constructive or functional deficiencies.
What buildings are required to pass it?
A. In Catalonia, all buildings over 45 years old from the year of construction according to the Cadastre, according to the following table and depending on whether the building is single-family or multi-family.
B. Buildings that are required by local programs or ordinances.
C. Buildings that want to undergo public aid programs for the promotion of rehabilitation.
What happens if we do not carry out the ITE?
Failure to carry out the ITE is considered a serious offense and can lead to penalties ranging from € 9,000 to € 90,000. This amount will depend on the risk of the building.
Whose responsibility is it to pass the ITE?
The responsibility to pass the ITE falls on the community of owners or the sole owner, when applicable.
Who bears the cost of the realization?
The economic cost derived from the compulsory technical inspection is borne by the persons obliged to carry out the inspection (owners of the property or communities of owners, as the case may be).
What types of resolutions do ITEs have?
The Housing Agency, based on the report of the technical inspection of residential buildings, will issue a certificate of aptitude that will notify the property directly. Depending on the general condition of the building, the aptitude certificate may or may not be suitable.
How should we act as real estate agents?
At the moment in which they make us a sales order and always before signing a deposit contract, we must verify if it is mandatory by law to pass the inspection, because if it were at the time of the sale, the notary will require this document and it could stop the operation.
The real estate agent has the responsibility of knowing if the ITE is passed or not. If it is necessary to pass the inspection, we must ask for it to be carried out. If it is not, we must advise when it will be mandatory and advise its implementation because it will always provide information about the state of your building.
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