Prices are increasing in Spain and Balearics

By AdmSolJM16

The forecasts of risk measurement agencies say that prices of housing will continue growing in Spain from this year until 2019 to reach 4.7% per year.

This will have a positive effect on bank’s balance sheets and the behavior of mortgage companies. In this sense, the specialists affirm that there is therefore no risk of a mortgage bubble, since for every four euros that were granted in 2007 today is allocated one euro for this purpose. The president of the European Central Bank (ECB), Mari Draghi, ruled out any danger in the euro area of a new housing or credit bubble.

The average price of second-hand housing has been in the Balearic Islands at 2,272 euros per square meter in April, a figure that represents an increase of 6.83% over the same month last year. Palma has been the second city where the price of used housing has increased the most from year to year, with 6.84%, registering an average price of 2.227 euros per square meter, just behind Barcelona.

Balearic Islands is in the sights of foreign investors looking to buy a home. Last year, the volume of transactions by international buyers – mainly European – exceeded 1.6 billion, which was a historical record and a 50% increase over two years ago. The luxury property is the most sought after by European buyers, more interested in purchasing than in renting, which has caused a significant increase in the average price in the last year in several areas of Mallorca

It should also be considered the boom of purchase by Swedish citizens. Property sales to Nordic citizens with high purchasing power have increased by up to 30% in the last three years. In the last four years the number of transactions on the island captained by these citizens has increased by 100% and the trend continues to rise. A demand that has skyrocketed mainly in Palma, where it has gone from three to thirteen specialized real estate agents in Scandinavian market in approximately ten years.

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Among the top areas for the Scandinavians are Palma center, the old town and the municipalities of the Part Forana, especially Serra de Tramuntana. There’s a neighborhood in Palma in which all Swedes want to live, Santa Catalina. Some people call it Little Sweden. The investment boom in the Palencia neighborhood has been spectacular in recent years.

If you are going to acquire a property in Mallorca do not hesitate to contact Ripoll & Mateu Solicitors Mallorca. We advise, defend and represent our clients at all levels. Our greatest asset is an infrastructure of professional leaders in each field of action, especially Real Estate and Tax, as well as our international vocation and multilingual capacity.

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Capital gain when no increase in value

By AdmSolJM16

The High Court considers that the capital gain tax is unconstitutional in these cases, very common since the outbreak of the economic crisis. We must consider that the tax is not annulled but its automatic application in cases where there’s no revaluation of the property.

Last February, the Constitutional Court (TC) has already the unconstitutionality of the capital gain tax on the increase in value of the Urban Nature Land (IIVTNU) of Gipuzkoa, when in the transmission of a property would have been sold at a loss. With the new sentence, the Constitutional extends this doctrine to the whole national territory. According to the judgment of the Constitutional Court, the seller of a property can’t be required to pay a tax that levies an increase in value which, in fact, has not occurred.
The TC values that the constitutional principle of economic capacity is violated since the tax is not linked to the existence of a real increase in the value of the property, but simply to ownership of the land over a period of time. For all this, the Court declares the unconstitutionality and nullity of arts. 107.1, 107.2 (a) and 110.4 of the challenged law. All those taxpayers who sell a house and obtain a profit from the transaction, must continue to pay it.

tourism-law-mallorca

In view of the foregoing, it’s estimated that the number of properties on which the repayment of the surplus value could be reclaimed because it was transmitted for a value lower than that of acquisition would be around 550,000 properties. Any natural or legal persons who have paid the tax by virtue of the transfer of a property to losses in a non-prescribed fiscal year can claim the payment of a non-corresponding capital gain.

What is needed to claim?

1.- Appeal to the council, although it may subsequently be necessary to resort to the courts.

2.- A technical report performed by an independent expert, which proves the loss of value produced between the moment of purchase and that of the sale. A specific technical report is required on the property transmitted, which shows the variation of the market value of the land between the moment of acquisition of the property and the transmission.

3.- The deeds of purchase and sale of the last and penultimate transmission of a property.

4.- Statistics of average prices of the residential market of the municipality or the postal code where the asset is located.

Contact us if you are faced with the need to claim a capital gain overpaid or have questions about the status of your property.

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