IS THIS TRUE?

[mitzipurr]

Have just found this whilst browsing on another forum.
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An estate agent mentioned to me recently something to the effect that there are new regulations coming soon, I think in April, which will require submission of a copy of the compraventa (private buy and sell agreement). I understand this states the real purchase price rather than the lower declared price on the public deed (escrutura). Presumably this is to deter under declarations. Perhaps a solicitor or agent on this forum will be able to confirm if I am correct and if so the precise details
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If there is any truth to this I guess there will be a lot of properties for sale very shortly!!

[LiLoLil]

Law to make black money deals thing of the past

9 January 2006

MADRID — A new law to be passed this year is to crack down on the common practice of paying part of the price of a new home or rent 'in black'.

At present those selling or renting property do not fully declare the value and pay all or the difference in cash, called "dinero negro" or black money.

But the new law will require all parties in a property transaction include the method of payment – cheque, mortgage, cash or other property – in the deeds of the property.

All the parties must include their tax identification number or NIF in the documentation for inclusion in the property registry.

These measures will allow the authorities to keep track of

homeowners that do not register their properties and do not pay tax on income from renting or selling.

To ensure landlords abide by the law, the new law will have tenants include the property registry number on electricity bills and contracts.

This way officials will know which properties are being lived in.

A common trick for landlords to avoid taxes is to say an apartment is empty when it is not.

All contracts agreed upon before the new law takes effect will have to adapt to the new legislation.

Power companies will have six months after the law comes in to include the registry numbers on the bills.

Last year, the government passed a measure making it mandatory to include the property registry number on income tax forms – and 101,600 new landlords suddenly appeared, 8.6 percent than the year before.

Taxes from rental income rose last year from EUR 862 million to EUR 10.2 billion.

Guillermo Chicote, president of the Spanish Association of Developers and Builders, said: "In the market for new apartments there are more controls. But in the existing home sales market, two individuals can do whatever they like."

But tax inspectors believe the new law does not go far enough and will still allow a landlord and tenant to ignore the legislation, if they agree to do nothing.

Others say it does not stop land speculation, which some experts say is the real fraud issue.

[Copyright EFE with Expatica]

[spanish_lad]

yup, its true. wether it will be enforced or not is a different matter. it will "only" affect the people who first sell the house after the law comes into effect.

[energy]

Just been to Granada this morning to get an nie number for my father-in-law, who's buying a house in about a month. Can't get an nie number without compraventa.

[Beachcomber]

It is not obligatory to have a private sale/purchase contract. If both parties are in a position to proceed they can go straight to the escritura.

In other cases I can foresee there being two contracts. One that corresponds with what is going to be declared in the escritura and the other one stating the full purchase price which will be destroyed once the transaction has been completed.

This would be in the case of private resales but it would probably be somewhat more difficult for promoters to circumvent the law.

I am not advocating this as a legitimate course of action but rather an exercise of the mind!

Energy, unless you have your father-in-law's power of attorney and a certified copy of his passport I think that you wouldn't be able to get his NIE number anyway because he was not there in person.

This also brings up another chicken and egg situation because you are supposed to have a NIE number before the escritura can be granted. The only other way is to produce a notarised copy of the private contract which most notaries are not prepared to do.

Perhaps this is how the authorities will prevent the fraudulent use of two contracts but it would only work in the case of purchasers who do not already have NIE numbers.

[energy]

Sorry Beachcomber, I went with the father-in-law and the spanish estate agent. Apparently we could of gone to the bank, opened an account and taken a letter from the bank to say the account was for buying a house, but decided to leave it. From what i can make out, when he comes over again, we go to the notary, get the contract, go to police station, get nie number, which they should issue in a letter, go back to notary and get escritura. Then possibly, a month later, pick up the document nie........Maybe

[Beachcomber]

No, my apologies, I mis-read your post. I thought you had gone alone to get your father-in-law's number.

I asked a local notary a while ago about notarising a private contract but he declined. As has been said before, it appears that staff in the various police stations around the country make up the rules as they go along.

It is quite legitimate for a non-resident, non-property owning foreigner to have a bank account in Spain for which a NIE number is supposed to be required to operate it.

Even if the notary accepts the receipt for application of the NIE many tax offices, though not all, require you to have the number in order to pay the transfer taxes on the property which must be done within thirty days of the signing of the escritura.

If your father-in-law does not have the number in time, and they will not accept payment without it resulting in not meeting the thirty day deadline, they will subsequently impose surcharges on the tax due.

Better luck next time!

[Nige]

It is quite legitimate for a non-resident, non-property owning foreigner to have a bank account in Spain for which a NIE number is supposed to be required to operate it.

When I opened an account with BBVA, they asked me to sign a single page "Non Residence Declaration" which then allowed them to open a No Residentes account. I assume that once you obtain your Residence Permit and complete all that paperwork, the bank will change the account to note your Resident situation as well as note your NIE. I just looked at HALIFAX Spain web site and they say the same on that.
So if you are 'in the process' of buying a property but have not actually lived in Spain long enough to get residency, or an NIE number, you can certainly organise this.

[Beachcomber]

Nige, my point was that you are supposed to have a NIE to operate any bank account so this should be sufficient reason for the authorities to issue one. I know that most banks do not insist on it for a non-resident account.