Why you should register your new or modified construction

Filed under : Conveyancing & Property Law, Property

In Spain there is no legal obligation to register property at the Land Registry. However, the failure to do so and for the registry to accurately reflect the size and description of the property can have serious and sometimes unforeseen consequences.

If you bought a two-bedroom property in the country for example and then obtained a licence and added a third bedroom, patios and a pool, your Land Registry entry should be updated with a Deed called a Deed of Obra Nueva. The architect will need to provide your lawyer with the certificate of completion and the Town Hall will issue a licence of First Occupation.

One of the most important things now is proving the payments made to constructors and architects, and all expenses must be supported by bills and invoices showing Iva (VAT) has been paid. The lawyer then presents the documents at the notary and a deed of new work is signed, either by you in person, or by a lawyer using a power of attorney. The deed is then registered. Tax is paid at 1.5% on the value of the new construction.

If this is not done and you wish to sell, it is likely to delay the sale or possibly lead to retentions or deductions on the sale price. This is one of the issues but other problems can arise. For example, there could be insurance issues or some form of administrative proceeding where the authorities or courts will only take account of the value of the original construction as registered on the deeds. This can lead to loss on the value of the property.

The situation is different with rural properties where the much discussed AFO or special licence has to be obtained.

For more information on all these issues or a consultation with one of our specialist property lawyers call us on * 34 952 527 014 or email [email protected]