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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche.
www.costaluzlawyers.es

Legal 1438. No IHT in Andalucia from 2018, January 1st
24 September 2017

From January 1, Andalucía will cease to tax the heirs who receive property of a deceased family member when the sum of the assets does not exceed one million euros. Family members enjoying this benefit need to belong to  groups I and II.

Group I:  Children and adopted children under 21 years old.

Group II: Children and adopted children of 21 years old or older, grandchildren, parents, grandparents, spouses, unmarried partners registered as a Pareja de Hecho (only in certain regions)

It is necessary to take into account that the million euros computes by heir.

Does the heir´s previous patrimony compute?

Yes. In order to benefit from the exemption it is necessary that the heirs do not have a previous patrimony, at the moment of receiving the goods,  of over one million euros. At present, the estate of the heir can not exceed 402,678.11 euros.

Who will continue to pay the tax?

The maximum tax bonus leaves out groups III and IV.

Group III: Other relatives of 2nd and 3rd grade, in-law relatives. Stepchildren, cousins, nieces and nephews, aunts and uncles, siblings, and in-laws and their ascendants/descendants.

Group IV: Other further grade relatives. No reduction is applied to these cases. All others including unmarried partners, unless registered as Pareja de Hecho in certain regions

The Junta de Andalucía establishes a reduction of 7,993.46 euros in general and another of 95% in the case of the habitual residence inherited between brothers over 65 years. No more.

How does reform affect donations?

In Andalusia the donations are more expensive than the inheritances, among other reasons because the autonomic norm contemplates less reductions in the quota of the inheritance tax and donations. The Government of Andalusia establishes a 99% exemption in the donations of money from the parents to their children or descendants that is destined entirely to the purchase of the first habitual residence, as long as the grantee is under 35 years old or has a handicap equal to or greater than 33%.

The rencet  agreement by Citizens and PSOE introduces a change when the destiny of the donation is to create a company or to extend it. Again the barrier of the million euros is established. Donations between direct relatives (parents and children) up to this amount are not taxable provided that the full amount of the donations is intended to constitute or expand an individual company or family business. The small print contains a multitude of conditions: the donation must be formalized in a deed and the company must be maintained during the five years following the date of the public deed of donation, unless the grantee dies within that period.

What other groups improve their situation?

The disabled. Existing reductions are increased. For taxpayers with disabilities, the great news is that it corrects the jumping error that was when the goods exceeded 250,000 euros exempt in the case of brothers, uncles and nephews. With the current rule, when the inheritance you receive is 300,000 euros, you had to pay the tax in full amount. From 2018 disabled brothers and nephews will liquidate the tribute for everything that exceeds 250,000 euros. In the example above, would pay the tribute for 50,000 euros.

What about inheritances that have already been paid?

The measure is not retroactive and does not affect liquidations that are already being processed and are submitted before 1 January. It is one of the complaints of the Association “Stop Tax Successions” that has spearheaded the rebellion against the tribute and calls for its total elimination. This Andalusian platform has ensured that "they will not buy our silence with rebates and shod" and maintains the protest scheduled on October 7 in Seville.



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Legal tip 1437. European Court on multi-currency loans
21 September 2017

New pro-consumer Decission by the Court of Justice of the European Union. Dated 20th of September 2017. It decided on a case of a mortgage loan with a multi-currency clause.

The yesterday passed text affirms that when a financial institution grants a loan denominated in foreign currency, it must provide the borrower with sufficient information so that the borrower can make informed and prudent decisions.

Spain  Supreme Court  is also passing a decission these days on the  abusiveness of such clauses.

In the European Court case, borrowers stated that at the time of signing the contracts the bank presented its product in a misleading manner, highlighting only the benefits that borrowers could obtain without showing their potential risks or the likelihood that they would be materialize. Borrowers asked the clause at issue to be declared abusive.

In this context, the Higher Court of Oradea, Romania asked the European Court about the scope of the obligation for banks to inform their clients of exchange rate risk linked to loans denominated in foreign currency .
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In that regard, the Court observes that the requirement that a contractual term must be drafted in a clear and comprehensible manner also requires that the contract provides a transparent statement of the actual operation of the mechanism to which the clause in question relates. Where appropriate, the contract must also indicate the relationship between that mechanism and that prescribed by other clauses, so that the consumer is in a position to assess, on the basis of precise and intelligible criteria, the economic consequences which result for him.


It is for the national court to ascertain whether all the elements which may affect the scope of its undertaking have been communicated to the consumer, enabling it to assess the total cost of its loan.

Merino sheeps and Grazalema in the background



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Legal tip 1436. Timesharers freed by Spain Supreme Court
11 September 2017

2017 has been a very productive year for the Spanish Supreme Court in relation to Timeshare and Consumer Law.

22 Court decisions so far, which by applying Law 42/98 to timeshare agreements, have produced important statements such as:

  1. Law 42/98 established an obligatory legal form for the setup of these contracts, that if infringed, makes the contract null and void and gives the consumer the right to obtain a refund of amounts. This form must be in a Notary deed, with subsequent registration at the Land Registry and containing full timeframes, cancellation rights, identification of turns etc.
  2. Law 42/98 applies, regardless the name of the contract, to any agreement by which money is paid for the enjoyment of property use for vacation weeks according to turns which have been previously acquired; where use is independent with enough furniture and accessory services; where payment is divided between an initial outstanding amount and posterior annual maintenance charges, with the possibility of withdrawing, resale and exchange.
  3. Consumer is who acquires these rights with no link to his professional or commercial activities. Profit can be made if that is obtained occasionally and unlinked to profession or commercial habitual activity.
  4. Lack of due information allows cancellation of the contract within three months from purchase date.
  5. If payments were made by a third party (agent, lawyer) they have same consideration as being made by consumer itself.
  6. Payments made within the desisting period needs to be reimbursed double fold.
  7. When nullity applies, refund is calculated in proportion to years not being enjoyed so far till 50 (legal maximum period)


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Legal tip 1435. Judges solutions against Banks when illegal properties
11 September 2017

Another great decision dated April 2017 by Alicante Provincial Appeal Court Section 9 in a case against CAIXABANK regarding solution to urban illegalities.

Law 57/1968 is applied to a case of urban illegality where the buyer had been living in the house for 9 years with no habitation license

The Alicante Provincial Appeal Court decision quotes Supreme Court doctrine which  established that delivery of the house according to provision 1461 y 1462 of the Civil Code includes full habitability conditions in an official way:  in short – habitation licences. (Supreme Court decisions dated September, 12th, 2016; April 22nd, 2015; September, 10th, 2012; November 8th, 2012; February 12th, 2013; March, 9th, 2016).

Nullity of the contract due to urban illegality is extended to the linked mortgage so, in these cases, a full claim of all amount paid, before and after completion, plus corresponding legal interests is possible.

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Final note after some discussion with readers below ;) This is a decision by a provincial Appeal Court but Supreme Court has already passed a good number of  excellent decisions in this same matter

"Los Lances" beach, Tarifa, Cádiz, Costa de la Luz, South western Spain

 



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Legal tip 1434. Repossession procedures frozen in Spain
21 August 2017

Spain Supreme Court in its decisions dated   23rd of December 2015 and  18th of February 2016   has ruled on the nullity of clause on early maturity  of mortgage loan  which

 
(a) does not discriminate the class of default of the debtor, or 
(b)   entitles the creditor to cancel the contract on default of a single repayment installment of the loan 


The Aziz Judgement by the Court of Justice of the European Union, dated 14th of March 2013 also stated this in its paragraph 73.


According to the European Court, the procedural consequence of this would be that the creditor, the Bank, would lack title to start the execution. The foreclosure procedure must be dismissed pure and simply. To this, it was added the obligation of the judge to assess the nullity ex officio, at any stage of the procedure

On the contrary, Supreme Court decision dated 23rd of December 2015 reiterates that the nullity of the provision of early maturity would not necessarily determine the dismissal of execution, but rather:

“assess, in the specific case, whether the creditor's ability to exercise early maturity is justified on the basis of the following criteria:
(1) Essentiality of the unfulfilled obligation
(2) Severity of the breach in relation to the amount and duration of the loan agreement and
(3) Real possibility of the consumer to avoid this consequence; As established by the aforementioned STJUE of 14 March 2013 (Aziz case).

The Plenum of the First Chamber of the Supreme Court has therefore raised a preliminary ruling before the European Court of Justice, in interpretation of art. 6.1 of the Directive.

The doubts of the TS arise on two aspects:


 (A) Whether it may be admissible that the declaration of invalidity of the advanced maturity clause applied just to clauses where just one month would imply the default.
(B) That the application of the law is operative, when it is more favorable to the consumer than the pure and simple expulsion of the clause

As Supreme Court is waiting for the European Court of Justice to answer on this, many repossession procedures are currently stopped in Spain

Related discussion thread at EyeOnSpain Forum

Costaluz Lawyers services

Zahara de la Sierra, Cádiz, Southern Spain



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List of cases won by CostaLuz Lawyers/ De Castro in 2017 so far
07 August 2017

 

List of cases won by CostaLuz Lawyers/ De Castro in 2017 so far:

BANK / INSURER PROMOTOR DEVELOPMENT
SGR, BBVA, BANCO SABADELL HERRADA DEL TOLLO S.L. SANTA ANA DEL MONTE
BANCO SABADELL RUDINA MIRADOR DE IZNALLOZ
BBVA (CATALUNYA BANC SA) BRONCHO PROMOCIONES LA TERCIA REAL
N/A HUMA INDALO SL OASIS TABERNAX
CAIXABANK SOLERA EL TRAMPOLIN SL TRAMPOLIN HILLS GOLF RESORT
BANCO SABADELL (CAM) CLEYTON GES LAS HIGUERICAS FINCA PARCS
CAIXABANK MANILVA COSTA SA JARDINES DE MANILVA
BANCO POPULAR MIRAFLORES DEVELOPMENT INVERSIONES SL VISTAS DEL LAGO
BANCO POPULAR LA RESERVA DE MARBELLA SL LA RESERVA DE MARBELLA
BANCO POPULAR AIFOS  
CAJA RURAL CENTRAL EUROHOUSE PUEBLO LA SAL
CAIXABANK (BARCLAYS) SIERRA BLANCA COUNTRY CLUB SL SIERRA BLANCA COUNTRY CLUB
CAJA RURAL CENTRAL EUROHOUSE FORTUNA HILLS GOLF RESORT
BBVA LEONARDO DA VINCI CAÑADAS DEL PARQUE
BANCO POPULAR PENINSULA PROJECT MANAGEMENT RESIDENCIAL GRANADA GREEN
N/A D. JUAN MAÑAS GRIMA y Dña. ANTONIA RUIZ SÁNCHEZ. N/A
BANCO POPULAR SIERRA MAR DEVELOPMENT SL HACIENDA BUENA VISTA
SGR, BBVA HERRADA DEL TOLLO S.L. SANTA ANA DEL MONTE
MILLENNIUM INSURANCE PROMAGA SAU ALTAVISTA
CAIXABANK OCHANDO SA OCHANDO GOLF
CAJA RURAL CENTRAL EUROHOUSE FORTUNA HILLS GOLF RESORT
CAIXABANK TRAMPOLIN HILLS GOLF RESORT SL TRAMPOLIN HILLS GOLF RESORT
N/A NEXT CENTURY S.L.  
CAIXABANK INTERLAKEN 2003 SL CASARES DEL SOL
ZURICH SEA GOLF APARTMENTS SL LA ALCAIDESA
BBVA SAN JOSE ALBATERA GOLF
BANKIA CONSTRUCCIONES MONTE PUCHOL SL ANGLE TOWER
SGR, BBVA, BANCO SABADELL HERRADA DEL TOLLO S.L. SANTA ANA DEL MONTE
BANCO POPULAR HUMA ALMANZORA COUNTRY CLUB

 

"Costa Ballena", among Chipiona and Rota, Cádiz, Costa de la Luz, South western Spain



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Legal tip 1433. Trampolin Hills and liability of La Caixa and other banks according to LEY 57/1968
21 February 2017

Murcia – Trampolin Hills

As a direct result of the Preliminary Diligences procedure filed in the Mercantile Court No.1 in Murcia regarding Trampolin Hills, the following conclusions and evidences were obtained by the Costaluz-Decastro legal teams:

  • Existence of Special accounts in La Caixa, Cajamar and Banco de Sabadell
  • Existence of two guarantee instruments: (1) by Caixa, office located in Santa Catalina, Murcia, (2) By Swiss Financial Corporation, which is illegal as the entity is not authorized in Spain.
  • Possibility of making all companies of the Trampolin Group liable of same breaches.

Caixa plays an important role in regards to liabilities of off plan advanced payments in this development as, together with holding one special account, it issued a guarantee instrument for the refund of off-plan amounts. These instruments, according to recent Case law by the Supreme Court cannot have financial or time limits.

The last Court sentences in Murcia regarding “in vigilando” obligations of banks who received off plan amounts in their accounts are as follows. All of them mention recent decisions by the Supreme Court:

SAP Murcia 4 08/09/2016: STS 16 January, 30 April & 21 December 2015: It explains the full doctrine of the Supreme Court with regards to vigilance and due diligences that must be performed by Banks receiving off plan deposits.

SAP Murcia 1, 04/07/2016: Also on liability of Banks receiving amounts according to Law 57/1968:  STS 21/12/15; 09/03/2015; 17/03/2016; 24/06/2016

SAP Murcia 4, 5/5/2016: Liability of Bank where developer opened the account to receive off plan stage payments



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Legal tip 1432. Corvera Golf & Country Club – Bankruptcy procedure
21 February 2017

LEY 57/1968 – RESPONSIBILITY OF THE FINANCIAL INSTITUTION – BANK OR INSURER

On 16 December, the Mercantile Court Number One of Murcia declared, at the request of creditors represented by the Costaluz Lawyers & DeCastro legal teams, the insolvency and administration of Corvera Golf & Country Club SL, and the assets of this company are now suspended.

The administration of Corvera will give greater clarity for claims against banks that accepted buyer’s off-plan deposit amounts for properties at Corvera and also against the guarantor banks or insurance companies.

Claims due to delay in delivery of the properties can be directed against the Banks in the light of recent important Supreme Court Sentences that are declaring, with forcefulness, the responsibility of the developer’s Banks as guardians of the security of those deposits in off-plan purchases.

This responsibility is given in two different scenarios, both confirmed by the jurisprudence of the Supreme Court according to Spanish Law, LEY 57/68:

(1) Liability of the financial institution that receives amounts paid by off-plan buyers into an account opened by the real estate developer, if the property is not completed on time.  These banks are responsible, for the return of the off-plan deposits plus interest.

(2) Liability of the guarantors, even though individual guarantee documents have not been given to purchasers: the understanding of General Guarantee agreements signed between developers and insurers or banks has always been interpreted by the Supreme Court in favour of the buyer for the full amount paid to the developers bank account by the buyer irrespective of any arbitrary limit included in the General Guarantee.

Banks also responsible if there were urban irregularities

A recent Supreme Court ruling also holds off-plan property developer banks liable if the development is not completed due to urban irregularities. The reason for this strong protection to the purchaser of first and second residences is in the eminently protective nature of LEY 57/68, which gives rights to the buyer which are of an inalienable nature.

This jurisprudence contributes to the regeneration of the trust in second homes in Spain that was sadly eroded due to the unscrupulous behaviour of many of those involved in the last real estate and financial bubble.

There is a ten-days short notice for possible creditors to be added to the list so contact us TODAY for a quick valuation of your real possibilities and offer of budget

Moratalla, Murcia, Eastern Spain



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Legal tip 1431. Floor Clauses – Supreme Court confirms refund of ALL overpaid interest
21 February 2017

Following the Sentence issued by the European Court of Justice in December 2016 regarding the retroactive effect of nullity of abusive Floor clauses (Cláusula Suelo), Spain’s Supreme Court has now ordered Spanish banks to refund their clients all the money they over-paid due to the Floor Clauses. The Supreme Court Sentence was issued on 15 February 2017.  The full text of the Supreme Court Sentence has not yet been published, just an abstract of the decision is known at present.

What is a floor clause?

These clauses set a minimum interest rate that borrowers would have to repay, even if the reference index (Euribor) dropped below the minimum interest rate, as happened from 2009 onwards.  Therefore mortgage holders with this clause in their loan were unable to benefit from the fall in the Euribor.

It is not specifically the Floor Clause that is illegal but the way it was included in mortgage contracts without its effect being fully explained to the customer.  This lack of transparency and lack of information is the reason this clause is deemed abusive.

What does this New Court Supreme Court ruling add?

With this February 2017 Court sentence, Supreme Court Case Law is now clear on the refunds that are due if a Floor clause is considered abusive due to a lack of transparency.  Refunds must be paid from day one of the client being overcharged, instead of only from May 2013 as was decided by our Supreme Court back in 2015.  Legal interest will also be applied to all refunded amounts.

How should I Claim?

A refund procedure is being prepared by the Government.  Once the bank has received the claim from the client, it will have three months to present an offer of settlement.  If an agreement is not reached in this time, a judicial action (Lawsuit) will be necessary.  Special Courts are also being created for these cases.

As an additional note: if you are currently negotiating giving the property back to the bank (Dation) or are in the process of a repossession procedure, the existence of a floor clause can help the efforts to succeed.

Zahara de la Sierra, Cádiz, South western Spain



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Legal tip 1430. Reclaim overpaid Capital Gains Tax on Sale of Property (Plusvalía)
21 February 2017

Spain’s Constitutional Court (CT) has annulled and forced the reform of the municipal tax on capital gains when selling a property.  This tax is commonly known in Spain as Plusvalía municipal, which in theory taxes the revaluation of real estate when it is sold even if the property is sold at a loss.

The Constitutional Court considers unconstitutional taxes that affect “those cases in which the economic capacity taxed by the tax is, not already potential, but non-existent, virtual or fictitious”

The ruling of the Constitutional Court which was unanimously adopted, has partially upheld the question of unconstitutionality raised by the Administrative Court No. 3 of Donostia, in relation to several articles of Regional Regulation 16/1989, of July 5, of the Tax on the Increase of Value of Urban Land of the Historical Territory of Gipuzkoa.

The Court considers that the said tax is contrary to the principle of economic capacity, provided for in the Constitution.

The ruling recalls that the principle of economic capacity is not only present in the tax system as a whole, but must be present in each tax. “It does not fit in our system”, affirmed the Tribunal.

Actions for claiming back this tax have a time-bar of 4 years

A view of Benaocaz, Cádiz, South western Spain



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