In the 60`s REITs (Real Estate Investment Trust) were born in the US, with the goal of making large-scale investments…
Seeking a second home in the sun?
Learn how to limit risks when purchasing, maintaining or selling real estate assets in Spain. We strive to update this page with the latest info and news about Spanish Property investments.
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As published in Conflict of Laws website by Marta Requejo, one year after the expiry of the deadline set by the Directive 2008/122/EC of the European Parliament and the Council of 14 January 2009, on the protection of consumers in respect of certain aspects of timeshare, long-term holiday products, resale and exchange contracts, the Spanish legislator has transposed it through the Royal Decree-Law 8/2012 of 16 March (BOE of March, 17), already in force. The Time-sharing Act (Act 42/1998 of 15 December) is repealed.
In addition to some rules on the language of pre-contractual information and the contract itself, Art. 17, entitled “Rules of private international law”, states that when according with the Rome I Regulation the applicable law is the of a non-member State of the EEA, the consumer may invoke the legal protection granted by the Royal Decree-Law in the following cases:
The European Commission has been very active during the last years regarding Spanish Tax position when a non resident element is involved. Our posting today deals with a matter involving transfer tax and stamp duty in the context of M&A.
During the last decades, individuals acquiring Spanish property owned by a Spanish Company (SL) have been forced to create a double company structure to own the shares of the Spanish company.
In many cases the two shareholders were based offshore and increased substantially the costs of owning property in Spain. The reason was that this acquisition will save the application of a real estate transfer tax which was extended to the disposal of shares.
Spain has been applying for many years a transfer tax charge of 6-7% for the disposal of shares of companies owning real estate assets in Spain. Interestingly enough, the application of this tax was not included in the Transfer Tax Act but in Law 24/1988 on the securities market.
Article 108 of Spain’s Law 24/1988 on the securities market establishes that a 6-7 percent transfer tax (7 percent in most autonomous regions) applies to the transfer of securities of a company whose real estate assets in Spain represent more than 50 percent of its total assets, or whose assets include securities in another entity whose real estate assets in Spain represent at least 50 percent of its total assets, if the acquirer gains control of the real estate entity as a result of the transfer.
The European Commission has asked Spain to modify its transfer tax provisions relating to the acquisition of securities in real estate companies, arguing that the provisions are not consistent with article 5 of Council Directive 2008/7/EC concerning indirect taxes on the raising of capital.