Properties Costa Blanca - Blog

In the context of property transactions it is very often that a purchaser of a real estate under construction wants to sell the rights and contract through an assignment contract to a third party before completion.

 

 

Firstly, we have to quote article 7.1 of the Ley del Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentales (upwards LITPAJD), says that will be subject transmission of ownership when are made onerous transmission by inter vivos acts regarding any asset and right incorporated on the assets of the individuals or companies.

 

This kind of transmission where is conveyanced a right and contract to a third party will be considered and subject as a “Transmisión Patrimonial” (ITP), being the subject party the purchaser/assignee of the right. Taxable income of the Tax will be the real value of the property which rights are being assigned, and the results will be 7% of that value.

 

This is very important, as normally assigner party and assignee party just determine the value on their own autonomy, which normally is the same amount that the assigner has paid at that time to the Builder/assigned. So if the Building works has a higher value than the assignment contract Tax Institutions could revise the amount paid to the legal one. This point has been confirmed by the Dirección General de Tributos on a binding enquiry made on March 23th 2005, adding the any payment left to Tax Institution by the assignee party also, will be responsible the Builder to pay.

 

This is why it is always recommendable to promoters/Builders to be sure that this Tax has been done and paid correctly according of what it has been said, as they could be responsible in solidum, through article 42 of Ley General Tributaria.

 

Secondly, please find which will be taxes for parties involved:

 

Taxes for the assigner party: Capital Gains. Whatever he receives more than he paid will be subject.

Taxes for the assignee party: 7% ITP of the real value of the property at the time of signing the private contract.

 

 

It is always recommendable in order to protect rights of the assigner and assignee parties, to bind the agreement through a private contract. After this agreement is signed:

Pedro Heredia Ortiz

pheredia-ortiz@icali.es
HEREDIA ABOGADOS
Phone: +34 966 351 999
Fax: +34 966 351999
Mobile: +34 660336045
Reyes Católicos 26, 3º pta. 2, 03003 Alicante (Alicante)
www.herediabogados.com