SPAIN Law and Practice Contributed by: Marta González-Llera, Toni Barios, Jorge del Castillo and Rafael Baena, Cases & Lacambra
2.6 Important Areas of Law for Investors The most important areas of law for an investor to consider when purchasing real estate are: • real estate contractual law – civil law, property rights, charges and encumbrances that may affect the asset; • urban planning and administrative – public law: (a) the regulations pertaining to planning and zoning which may affect the asset; and (b) the granted licences; • corporate law – structuring the investment; and • taxation – the direct and indirect tax structure implications of real estate transactions. 2.7 Soil Pollution or Environmental Contamination R&W regarding environmental matters are not common practice, but some regulations request them under certain parameters or on certain occasions. In Spain, starting from 10 April 2022, it is mandatory to include an explicit statement in the deed formalising the acquisition regarding whether any activity that may have contaminat - ed the soil has been carried out on the property. This statement will be subject to a marginal note in the Land Registry, for the purpose of providing corresponding registry publicity. Regarding liability, the “polluter pays” principle applies in Spain. This means that the person who caused the pollution is liable and shall assume the expenses involved in compensation and will bear the costs of remediation. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law General municipal urban development plans (PGOU) contain the uses permitted for a plot, sector, and zones.
Urban agreements with the relevant public authorities are common in Spain to facilitate a project, eg, the execution of public interest or local sectorial plans. In addition, it is possible to subscribe to an urban agreement ( convenio urbanístico ) between the town hall and a devel - oper, see 4.6 Agreements with Local or Govern- mental Authorities . 2.9 Condemnation, Expropriation or Compulsory Purchase Expropriation is permitted under Spanish Law if the expropriation is justified by public interest and under the payment of compensation or “fair price” to the title holders affected. The procedure first requires the prior declaration of “public utility” of the project and requires the occupation of the property or the acquisition of the affected economic rights. In order to carry out the expropriation, the expro - priator must submit a file, which must be duly published. 2.10 Taxes Applicable to a Transaction Taxation on real estate transactions depends on the envisaged deal scheme (ie, asset or share deal), the type of real estate asset to be trans - ferred (rustic or urban land), and constructions, as well as the condition of the parties intervening in the transaction, eg, an entrepreneur acting as such or a consumer. Asset Deal VAT and property transfer tax The condition of the seller determines whether an asset deal shall be subject to VAT or property transfer tax. If the seller does not qualify as an entrepreneur or as a professional for VAT purposes, the real
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