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glossary: |
"Agua y Luz"
general term for incidental expenses that literally translates to: “Water
and Light”. This is sometimes partially included in the public charges
of a residencial and then called “Comunidad”. It is due once every
two month.
Arras or Reserva
Is a down payment (usually about 10%) made for the
purpose of reservation. This means the recipient
i.e. the seller shall not sell the property otherwise
up to a fixed date. If by then the contract still
is not signed usually the “Arras” is
forfeited.
Aval
Bank guarantee
Ayuntamiento
The local city- as well as the municipal council.
Basura
Literally „Waste“ meaning the charges by the municipality for removal
of refuse. This is due twice per year and is often included in the “Comunidad”
of a residencial.
Cedula de Habilitad
Certificate of habitality, often also a waypoint coupled with due date of a
partial payment on property.
C.I.F.
Codigo de Identificación fiscál. Tax identification number for
enterprises.
Comisión
Brokerage or commission. In Spain, commission on property sales is paid by the
seller. The broker though will add his commission upfront on top of the desired
price of the seller, so this way the buyer is paying after all. Careful if a
broker wishes to collect commission from the buyer he may be trying to double
his profit by charging both parties.
Compraventa
Civil contract stating the sale of property. This is a valid contract but in
Spain civil courts are very overloaded and it is extremely difficult to enforce
a claim here. This contract is looked upon as a very formal statement of intent
often combined with a “Reserva”. Legal certainty concerning the
change of ownership is only reached with the “Escritura”.
Comunicación registral
Is the conveyance of property and is applied for by the notary after signature
of sales contract.
Comunidad (de Proprietarios)
The community of property owners of a residencial housing estate. This board
elects a representative (president) who speaks for the community in all outside
matters, and is responsible for the upholding of the estate. He therefore has
the right to assign orders to craftsmen when necessary. His work and decisions
are often not controlled very closely and since “little favours”
are a matter of course in Spain when giving away orders, long time presidents
of housing estates drive amazing large cars.
Comunidad also means monthly charge for upholding. The amount is set by the
board and is usually somewhere between 50€ to 250€ per month. There
are housing estates without Comunidad but these in general seem very messy because
nobody is responsible and things don´t get done by themselves.
Contrato Privado de Compravenda
Private property sales contract. In Spain no rules exist concerning the Form
of such a contract. Even verbal contracts are valid – but of course difficult
to prove. Brace yourself when confronted with this problem, a clever Spanish
sales person will easily find dozens of witnesses whenever necessary for his
purposes. The really wild times are over no doubt, but some “specialists”
still collect down-payments from dozens of buyers for one and the same property.
Remember, the only valid proof of ownership is the “Escritura”.
Effective area
The effectively useable area of all rooms in a building. Not identical to the
Built-on area which includes all walls etc. which is built on but not useable.
Escritura
Entry in the land register. The only valid proof of ownership and therefore
the only valid source of information concerning the location, surface, buildings,
or debts lying on the property in question. With the execution of the “Escritura”
in your name you become the owner of the property. If you have financed with
a mortgage then a duplicate of the “Escritura” will be issued to
the financing institute.
Escrow account
A bank account upheld by a laywer or notary for the purpose of making payments
to it in the process of the sale of property so that the money is “on
the table” without actually handing it over to the other party. This is
advised to prevent non-fulfilment.
Haager Apostille
Is the name for certificates of validity of official papers. These must always
be applied for and issued in the country where the papers to accredit originated.
Hacienda
Somehow sounds nicer than tax office or IRS but it really is the same thing.
As a proprietor in Spain you will encounter mainly the Ayuntamiento and the
Hacienda. In certain cases also with the tax office back home. They may want
to know where the money for your new house in Spain came from.
IAJD
Impuestos sobre actos juridicos documentados. Notary expenses for Nota simple
and/or Escritura.
IBI
Impuestos sobre bienes inmuebles. Realty tax, to be paid by every proprietor
IGIC
The on the Canary Islands effective very low Value Added Tax (VAT) of 5%. It
should (by law) be included in all prices presented to consumers but often is
not. So do not be surprised if you find IGIC as a distinct position on almost
every bill presented to you from Hotelroom to property sales.
ITP
Impuestos sobre Transmissiones Patrimoniales. Tax on acquisition of real estate.
At present 6% of the official price. Since the Spanish government wants to be
sure to be paid on time this means for you: only after payment of tax may the
Escritura be issued.
IVA
Inpuesto de Valor Anadido. The normal value-added tax (VAT) of 16% in effect
on mainland Spain. It is not applicable on the Canary Islands.
N.I.E.
Numéro de Identificación para Estranjeros. Foreigner ID. Once
issued it will stay with you unaltered throughout your spanish existence. It
is applied for and issued by the National Police and it is a requirement for
many tasks as registering a car or getting a job here.
N.I.F.
Numéro de Identificación fiscál. Private tax ID. When involved
in tax relevant seles processes (as real estate) or when applying for a licence
of some sort you will need a N.I.F. Enterprises apply for and are issued a C.I.F.
instead.
Nota Simple
Plain excerptof the land register. It will contain information about the owner,
the plot and mortgages. Take care that a “Nota Simple” presented
is very up to date and not older than a few weeks.
Pago Inicial
Down payment. Not to be mistaken for the “Reserva”. A down payment
is often required for by the seller without proof of even having started to
build the object in question.
Plan General de Ordenación.
The general development plan of a community. It states if a certain housing
project may be built on that special site. As you may know it is often altered
by the community council. If you are so accurate that you wish to inspect in
your community in Spain then make sure you are shown a valid, up to date version.
If you plan to buy in a residencial housing project then you may most surely
be certain that everything is in order after construction has started. If you
are buying a plot without buildings then we strongly recommend that you check
the status in the mentioned registry upfront.
Plan Parcial
Partial development plan. May be changed by the community council without objection
from the public.
Plusvalia
Increment value tax for real estate which is 35 % of the price difference between
the chartered value when a real estate is purchased and sold. Authorities of
course know the price development of real estate in their community very well
and fix prices for resale according to their experience if the chartered value
appears far too low. Nobody here will believe you that you sold your real estate
for the same price as you bought it many years ago. So take this behaviour as
a stimulation that it still pays to own real estate here in Tenerife.
Poder
Mandate for certain legal procedures.
Resident
The owner of a “Residencia” is a resident. Since Spain became a
EC-member the “Schengen Convention” makes it is clearly illegal
to ask all foreigners which are staying longer than 90 days on Spanish territory
to apply for Residencia. The political discussions about this are controversial
but sooner or later Spain will need to give up this habit. In everyday life
the Residencia is hardly ever inspected nor necessary for any transactions.
Only when you buy ferry or plane tickets amongst the Canary Islands or from
here to the mainland of Spain you pay clearly lower prices as a resident.
Retención
This is a 5 % retention on the purchasing price which the buyer has to withhold
from the seller and which is kept on the escrow account until the Ayuntamiento
confirms that the seller has liquidated all taxes and charges which relate to
the real estate.
S.A. sociedad anonima
Joint stock company and indication of a bigger company (like everywhere “bigger”
does not mean automatically “better”)
S.L. sociedad limitada
corresponds to a private limited company. The liable capital of a private limited
company may be lower than in your country.
S.L.U. sociedad limitada unipersonal
means a private limited company run by one person only. Most S.L.U´s refer
to themselves only as S.L.´s for obvious reasons.
Superficie Util – see effective area
Terreno Rustico
Territory which can mostly be used for agricultural purposes only. It may be
cheap but it is a gamble since permission to build on “Rustico”
is almost never granted. Furthermore you may see the water from almost every
“Rustico” offered on Tenerife, but they are rarely equipped with
drinking water supply. Neither with phone or electricity infrastructure. It
can become very expensive to care for all this so the purchase of a “Rustico”
is only for specialists. All others: hands off
Terreno Urbanisable
This is territory, mostly in the periphery of existing housing estates which
is layed out as future building plots and on which certain building sizes, utilization
and outer shapes can be built. Often these territories do not have any supply
or disposal yet.
Terreno urbano
Building land. The times when everybody here on Tenerife built as he wanted
are finally over. But it still is very much more liberal than in many other
European countries. Even though, as in most other places here too a plot may
only be constructed with a certain size of house and a certain number of floors
must not be exceeded. It sometimes seems that the Canary Authorities enjoy it
when they decide to tear down a house built not quite according to regulations
and belonging to a foreigner.
Usable floor space
The area in m2 of a house / apartment is an uncommon value on the Spanish market.
Therefore it may sometimes refer to the built-on-area and sometimes to the actual
net area usable. Sometimes even garages are included so beware when comparing
this value.
Valor Catastral
It is the value in the land register. It serves as assessment basis for the
tax on assets resp. increment value tax (Plusvalia) in case of resale.
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