TERMINOLOGY
Some of the terms used can be foreign because they may refer to a language which may be foreign, or that they refer to a Legal name which of course according to Legal or Fiscal Law is the correct term. In either case, one would be wise to become familiar with such terms as they will be relevant to any person who has an interest in Spain, especially so for those persons who are Non Resident in Spain.
In most cases, you should find the English term, the Spanish equivalent and a brief description to what the term refers.
Non Resident - No Residente
Refers to persons who own part or full share in a property in Spain and do not live in the property. Officially it refers to persons who spend less than 183 days each Tax Year in Spain and who pay their main Tax outside of Spain. An individual should declare their Fiscal Domicile to their own Tax Office, else run the risk of the National Tax Office in Spain assigning a Fiscal Status which may not be accurate and would mean having to prove otherwise by the presentation of supporting documents. This can have the effect of incurring additional expense to the individual.
Local Rates - Impuesto de Bienes Inmuebles (I.B.I)
Sometimes referred to as 'Suma' or property tax, payable to the Town Hall direcly or via local collection agency known as Suma office. Amount to pay will vary from property to property and depends on the rateable value as assigned by the Town Hall.
Witholding Tax - Impuesto Sobre la Renta de No Residentes
Tax charged by financial institutions on deposits where no corresponding proof of Tax can be provided. Base rate of Tax: 15%.
Capital Gains Tax- Impuesto Sobre la Ganancia Patrimonial
Tax payable to National Tax Office on the profit derived from the sale of Spanish property. Levied at rate of 18%.
Income Tax- Impuesto Sobre la Renta de No Residentes
Tax payable to National Tax Offfice on the imputed income or notional increase in the price of the property as reflected in Title Deeds since date of purchase. Levied at 25% p.a.
Wealth Tax- Impuesto Sobre el Patrimonio de No Residentes
Tax payable to the National Tax Office based on the value of the 'wealth' acquired, in other words, the net value of the property as reflected in the Title Deeds. Levied at 0,2% p.a.
N.I.E. - Numero Identificación Extranjero
Identification numbered document which, by Law, must be applied and be issued to each person who has part or full share in a property in Spain.
N.I.F. - Numero Identificación Fiscal
Refers to the registration of the Taxpayers details with the National Tax Office, essentially for the payment of Tax.
Spanish Residency - Residencia
Refers to the application and subsequent issue of a Card/Certificate which identifies the individual as a person who is effectively living in Spain or spends at least 183 days each year, in Spain. This can mean where one 'resides' physically. Issue normally implies Fiscal Residency in that the individual is required to pay any and all Taxes in Spain on any worldwide assets, as is a Spanish National. The issue of the Card/Certificate is a means of identification and can be used in Spain instead of the need to present the Original Passport in order to confirm the identity of the individual. Do not confuse Residency with Nationality, one can be a Resident in Spain but be of say, British Nationality. Nationality depends on which countrys Passport the individual has been issued with. Residency can mean where the individual lives and pays Tax.
Title Deed - Escritura de Compraventa
Public document which is signed by Seller and Purchaser of property in Spain before a registered official known as the Notary Public. Legal document acknowledged as showing change of Title from one party to another and details relating to the property, and individuals concerned in the transmission. Once the tranmission has been entered into the Catastral Register, the document can become Public.
Mortgage Deed- Escritura de Prestamo HIpotecario
Public document which is signed by the Loan Provider and the recipient of the Loan, before a registered official known as the Notary Public. Legal document acknowledged as showing the details and terms of Loan granted, and individuals concerned in the transaction.
Power of Attorney - Poder
Public document which is signed by the relevant parties before a registered official known as the Notary Public. Legal document acknowledged as granting power or powers to another individual to act on their behalf in Spain. Normally POA is granted to a Lawyer in Spain, but can also be granted to Spouse, or family member. Extent to which one can act on behalf of the Grantor can be limited to a specific activity or all encompassing.
Fiscal Representation - Representación Fiscal
Refers to the action taken on behalf of the Taxpayer with respect to the payment of Taxes in Spain. This can be take the form of a Public document signed by the Taxpayer and the Representative, before a registered official known as the Notary Public. Else the document can be one that is issued by the appropriate Tax Authority and is recognised as being acceptable in order for the Representative to act on behalf of the Taxpayer. At least the Taxpayer must give his verbal and written consent for the Representative to act on his behalf with regard to matters of a Fiscal nature. It is a Legal requirement for persons who have part or full share of more than one property in Spain to appoint a Fiscal Representative. Otherwise the Representative should always act in accordance with the Law and with the instructions of the Taxpayer.
Tax Office, National - Ministerio de Hacienda
Responsible for the collection of National Taxes from Nationals, Residents, and Non Residents, Tourists, anyone who is responsible to pay Tax to the National Tax Office.
Town Hall - Ayuntamiento
Responsible for the provision of Local Services to property owners in the municipality. Responsible for the collection of Local Taxes such as Local Rates, Rubbish Collection (Basura), Sewerage disposal (Alcantarillada), Car Tax etc. Responsible to assess each property in its locality and assign a rateable value for the purpose of applying the I.B.I. Tax which is for the Local Rates. Office to whom one should register if one becomes Resident in Spain.
Rateable Value - Valor Catastral
Value which appears on bill for I.B.I. Tax or Bank statement as assessed by Town Hall each year. Value must be known in order to include in the calculation of Non Resident Wealth and Income Tax.
Lawyer - Abogado
Person who is legally registered in Spain and has been recognised as having met the requirements and granted the Legal capacity to act on behalf of persons who have a Legal need in Spain, for example in the purchase of a property in Spain.
Community Fees - Honorarios de Propietario de Communidad
Yearly or twice-yearly charge to persons who own a property in Spain that has communal elements such as roofspace, lifts, stairwells, halls and entrances, gardens or swimming pools. The charge is for the maintenance or improvements to the commmunal elements and cost for administration. Amount to pay can vary from property to property depending on different factors.
Notary Public - Notario
Person recognised by Law as having the appropriate qualifications and capacity to witness and oversee Legal transactions in Spain. Does not have the capacity to offer Legal Advice only to ensure Legal compliance in the activity to which he is being called upon to witness and oversee.
This information is intended for use as a Guide only and in no way should the information be taken as complete or as the basis for Legal Fact. Likewise, whilst we make every attempt to ensure accuracy, we cannot be held responsible for failure of the individual to seek confirmation of the up to date facts pertinent to their specific situation and locality.