Full legal counselling in the purchase of properties;drafting and negotiating any kind of contract regarding the purchase or sale of properties and land, both urban and rural; building work and development contracts; ownership proceedings; preparation of powers of representation in Spanish, German and English.
Counselling for real estate investment, sale and purchase of properties
Gesche has been counselling foreign clients in the sale and purchase of property in the Canary Islands and throughout Spainfor years. In these instances, the client usually requests the firm to manage the purchase or sale of a property, whereby we take care of the whole procedure, including all the paperwork. For instance, when selling a property, Mr. Ricardo Gesche normally receives a notarised power of attorney in order to carry out all the proceedings involved with the sale, and is personally responsiblefor the full procedure, which would includethe following steps:
- Contacting trustworthy real estate agencies to sell the property
- Valuation of the property, if necessary
- Inspection of the property by an architect to ensure that the building, installations, etc., are all up to standard.
- Previous calculation of the taxes to be paid by the seller
- Negotiations on behalf of the client to achieve the best sale conditions possible
- Drafting of a pre-agreement of the sale agreement, drafting of the notary deed, mortgage cancellation and/or the cancellation of any other possible debt
- Undersigning agreements or sale agreements as the client’s representative, receiving payment and its transfer to the client
- Tax declaration and payment thereof on behalf of the client
- Changing all the property’s utility bills, paperwork at the town hall, opening and closing bank accounts
This law firm takes care of all the procedures and paperwork required to sell a property, providing a service that means that the client can disengage from the matter and just await their money to be deposited into theirhome bank account.
Inheritance, wills, accepting an inheritance, inheritance and donation tax declarations, registrations, consolidation of the rights of use due to the decease of the beneficial owner, and in general, any matters related to Inheritance Law with special attention to international inheritance law.
The firm takes care of the whole inheritance procedure so that the client does not have to worry about a thing. Counselling is provided from the start, covering all legal and tax aspects of the inheritance, calculating in advance the amount of inheritance tax to be paid by the inheritor, so that the client is aware from the beginning of how much is due.
Once the inheritance procedure is completed, we offer our clients another service which may seem unnecessary yet is not: dealing with the paperwork upon accepting the inheritance for changing the utility bills (water, electricity, telephone and internet) of the inherited property, updating the land registry and town hall, insurance companies, community of owners, banks, etc., and setting up direct debit for the client’s account. Hence, the client has no need to worry about anything as they receive a “turnkey” service. This is crucial for the client who does not speak Spanish, and it means that there is no need to visit the island to deal with paperwork and work their way through the complexities of Spanish bureaucracy.
RURAL AND URBAN RENTALS
Legal counselling; drafting rental agreements; claiming unpaid rental fees; claims against outdated rental agreements; rental updates and reviews.
Legal counselling is vital for leases. We have seen many instances of lease agreements which have not been drawn up correctly and entail disastrous consequences for the client, such as the lease of a commercial premise that does not have a clause allowing the lessee to cancel the agreement before the expiry date. This type of clause can be important to confront unwanted circumstances, for instance, where the business created is not reaching the expected turnover and the lessee needs to foreclose. In other words, the aim is to avoid unwanted situations that could be avoided with correct counselling and the preparation in advance of the agreement.
Counselling communities of owners and assisting meetings; creating new communities; representation at meetings of owners; legal or extrajudicial claims againstneighbours in arrears; disputing meetings and community agreements; auditing community accounts; claiming the builder/developer for any property defects, including hidden defects; changing the original use of community property.
Setting up companies; amendment of bylaws; council secretary; corporate restructuring; settlement and closure of companies; liability action against directors.
COMMERCIAL AND CIVIL AGREEMENTS
Customer rights; collaterals; mortgage law and securities; protection of personal data.
Economic offences against the public treasury, corporate crimes, crimes against property, scams and embezzlement.
Divorce and procedures related thereto: divorces, nullity, settlement of joint ownership, adoptions, assignment of tutors, affiliation, incapacity, etc.
Damages; monetary claims and rights; claims against building defects; road accidents and civil liability; community of owners; Execution of foreign rulings in Spain.
Application of the “rebus sic stantibus” doctrine for renegotiating agreements and, where applicable, filing legal claims to change clauses of terminate agreements.
Claims against illegal building work; administrative procedures of any nature at townhalls, Public Tax Administration, and other public administrations.
SETTING UP A COMPANY TO START BUSINESS
Gesche can take you through all the steps and paperwork required to set up a company and be able to carry out your dreamed commercial business in the Canary Islands. The Canary Islands have some interesting tax privileges which differ from the rest of Spain and Europe, such as the ZEC zone (a special area in the Canary Islands with lowtaxes) and the RIC (the Canary Islands Investment Reserve). Gesche has solid experience regarding this and enjoys the collaboration of expert tax advisers.
In 2015, Spain introduced the second opportunity law. This law was incorporated to the Spanish legal system by means of Real Decreto-Ley 1/2015. The aim of this law is to giveindividuals the opportunity to reset their debts or, should they be unable to pay their creditors, for their debt to be partially forgiven, thus allowing them to “re-start”.
The advantage of this rule is that it provides creditors partial satisfaction in situations whereby in any other circumstance they would not recover their credit. At the same time, the person required to pay can escape from the debt spiral and avoid being in downfall for the rest of their life, as the interest rate on the credit would continue to increase.Overall, the client can choose to pay their debt upon reaching an agreement with their creditors and the latter, thanks to the restructuring of the debt, may partially recover their credit, which will always be better that not recovering a penny.
This Spanish legal rule is based upon the universal asset liability principle; thus, when a person takes on a debt, they take responsibility thereof with all their assets, present and future. It is true that there are certain assets that cannot be seized, such as a retirement pension up to a certain amount or assets that are used for working.
Thislaw firm offers its clients this type of counselling and negotiates the best agreements possible with the creditors in order to restructure the debt and, hence, give our clients a second opportunity.
AMENDMENT OF CONTRACTS: THE “REBUS”CLAUSE
The Spanish legal system allows for the provisional or definite amendment of contracts, in circumstances where an unforeseen risk which is not attributable to the parties hasinterrupted the balance in the provision of services between the contract parties. The clearest example of an unforeseeable situation, which has drastically reduced the economic activity of the whole country, is the Covid-19 pandemic. Thousands of commercial premises have had to close their doors, which means no income.In these cases, an amendment of the contract would be advisable in order to find a new balance in the provision of services. This firm provides counselling and services to:
- Negotiate, study and prepare contractual conditions which may be advantageous for the client, trying to reach an extrajudicial agreement.
- File a lawsuit, should an extrajudicial agreement not be possible.
TAX LAW FOR NON-RESIDENTS IN SPAIN
Foreigners who have properties in their name in Spain have to pay taxes in Spain.There is a common belief among foreigners who own properties in Spain that the only taxes they need to pay are the Land Tax (IBI) and the rubbish collection tax due to the townhall. However, this is not true and there are more taxes (detailed below) that must be paid.Gesche offers this service to its clients and each year we take care of the preparation and presentation of their taxes. This means that our client can rest assured that at Gesche we will take care of the whole procedure.
LIST OF TAXES TO BE PAID BY NON-RESIDENT CITIZENS IN SPAIN WHO OWN REAL ESTATE AND PERSONAL PROPERTY IN THE CANARY ISLANDS
1. URBAN CONTRIBUTION (IBI): Real Estate Tax (IBI), which is fixed for each property in each municipality. It must be paid twice a year, in spring and autumn in the current year and this can be paid directly to the Town Hall in question, or it can be paid by direct debit. When buying, it is important to make the change in the Cadastre through Mod. 901. It should also be noted that the property must pay a fee for rubbish collection twice a year. This can also be done by direct debit, or by paying directly to the Town Hall. If there is a vehicle, the registration tax must be paid annually to the Town Hall in the same way as the previous ones.
2. WEALTH TAX: This tax is paid if the value of the property is 700,000 euros. This tax is 0.2% of the value indicated in the deed or the cadastral value, if this is greater than the value of the purchase. If after the purchase, the tax authorities have made a value check, the highest of the three values always applies.
If you have deposit accounts, or have other important assets, this should be reported as an asset. For this you should ask your bank each spring for a bank statement for the previous fiscal year.
3. OWN USE TAX: (Tax Return 210): This tax is 24% (19% for EU citizens) of 2% of the cadastral value of the property. This tax has to be paid by the owners, who do not have their property in tourist renting (private). If you rent your property, you will pay in taxes 19% of the income obtained, but keep in mind that at the moment it is not allowed until the law regulates it.
Please note, that if you do not pay this tax, when you sell, the tax office will demand this payment with its possible fine and interest.
4. IGIC CANARIO: With rental income you must also pay 7% IGIC to the Canary Islands Government. Model 420.
Please note, that if you do not pay this tax, when you sell, the tax office will demand this payment with its possible fine and interest.
5. RESIDENCE: By applying for Residence in Spain it means that you have moved your main residence to Spain. You must therefore cancel your registration in your country of origin. So from this moment on you will have to pay the tax on your total worldwide income in Spain. You must immediately notify your bank of the fact that you have applied for the Residence, otherwise your Spanish account may be blocked for an indefinite period.
Taxes are always paid in the following year before the end of June or possibly before the end of the year, this will depend on which tax is involved. We will provide you with information and personalised advice.
Every non-resident in Spain requires a tax representative, article 46.1 of the Spanish Tax Law.
OBTAINING RESIDENCE IN SPAIN FOR NON COMMUNITY FOREIGNERS «GOLDEN VISA»
Law 14/2013 of 27 September states: “Non-resident foreigners who intend to enter Spanish territory in order to make a significant capital investment may apply for a residence visa, or if appropriate, a residence visa for investors”.
Conditions for applying for the “Golden Visa”
- Investment in public debt for a value equal to or greater than two million euros (‘2,000,000).
- Investment in bank deposits in Spanish institutions or shares in Spanish companies for a value equal to or greater than one million euros (‘1,000,000)
- urchase of real estate in Spain with an investment of more than 500,000
- To carry out business projects in Spain. They must be considered and accredited as being of general interest.
Advantages of obtaining residence in Spain:
- Entering Spain without a residence visa
- Living and working in Spain
- Travelling in the EU – visa-free Schengen area
- Being able to bring your family to Spain
- Access to permanent residence (after 5 years and in accordance with the legislation in force)
- Access to the Spanish NATIONALITY ( after 6 years and in accordance with the legislation in force )
- Gesche has experience in this procedure and will be able to advise you and help you obtain your residence permit in Spain. The advice will include all aspects, from the study of the optimal investment to be made, through other steps such as opening a bank account, to the process of obtaining the residence permit itself.
OTHER NON-RESIDENT PROCEDURES
Obtaining NIEs (Foreign Identification Number in Spain) and CIFs (Tax Identification Number) for foreign individuals and companies in Spain.
Calculation of the price and preparation ofcapital gains declarations, as the result of selling real estate, and collateral activities resulting from the townhall’s capital gains tax.
Preparation and calculation of inheritance tax.
Counselling forreal estate opportunities – managing investment funds – negotiations
Thanks to our vast expertise and the network of contacts and relationships that we have built upon over the last fifty years providing professional services, we are proud to be able to provide our clients with counselling in the search of the best investment for their interests, contacting and negotiatingthe best purchasing conditions possible with the selling party on behalf of the client. Furthermore, the firm will search for, counsel and manage on behalf of the client, the best financing offers available, if necessary.
Gesche Abogados offers advice to both companies and individuals.
We specialise in tax and employment advice, as well as experts in town planning, auditing and accounting.