Here you will current news and articles of interest about the real estate sector

In accordance with the provisions of "Law 12/2023, of May 24, on the right to housing" a new reference index has been implemented for updating the rental price in housing lease contracts, which will be applicable from 2025.

The purpose of this new index is to prevent disproportionate increases in rental prices.

This index is known as the Residential Rental Reference Index (IRAV) and will apply only to contracts signed after the Housing Law came into force, that is since May 26, 2023.

The IRAV is defined as the minimum value among three indicators:
- The annual rate of change of the Consumer Price Index.
- The annual rate of change of the core Consumer Price Index (CPI excluding fresh food and energy).
- The adjusted average annual rates of change of the CPI and the core CPI, measured as the difference between the annual growth rates of both the Consumer Price Index and the core Consumer Price Index for each month and a benchmark representing expected medium-term inflation, adjusted with a moderating coefficient.

The IRAV is published monthly on the INE website. It is normally updated mid-month, reflecting the previous month's data.

Lease contracts signed before May 26, 2023, will continue to be updated according to the CPI or the reference index established in the contract.

It should be noted that the landlord must notify the tenant in writing the rent increase during the month prior to its application.

A delay in applying the revision shall not imply its waiver or expiry, although under no circumstances may it be applied retroactively.

For property transfers in Catalonia the taxable base for Property Transfer Tax purposes shall be the highest of the following values: reference value, declared value or agreed price/consideration.

If in accordance with the above, a taxpayer must value a property at the reference value but declares a lower value, the Tax Agency of Catalonia (ATC) will initiate the corresponding procedure to regularize the taxpayer's tax situation.

The taxpayer will receive a proposed supplementary assessment, against which, if he consider the reference value applied to be detrimental to his interests, he may present any objections and evidence he deem appropriate. The objections submitted will be forwarded to the General Directorate of Cadastre so that it may issue a report ratifying or correcting the reference value. Consequently, the arguments will be accepted in whole or in part, or they will be rejected and, where appropriate, a settlement will be issued.

If a settlement is issued, the taxpayer may challenge the reference value by filing an appeal against the settlement. The ATC will resolve the appeal with a mandatory, prior and binding report from the General Directorate of Cadastre, which will ratify or correct the reference value after considering the allegations and evidence provided.

When a property has no reference value or cannot be certified by the General Directorate of Cadastre the highest of the following magnitudes will be taken as the taxable base for the purposes of Property Transfer Tax: declared value, agreed price/consideration or market value.

The filing of an appeal against the liquidation only suspends the execution of the contested act at the request of the interested party if it guarantees the amount of that act, the interest on late payment resulting from the suspension and the surcharges that would be due in case of enforcement of the guarantee.

Market value is understood to be the most probable price for which an asset could be sold free of encumbrances between independent parties.

If the property does not have a reference value assigned to it on the date of the taxable event, the Tax Agency of Catalonia may verify its value. The property's value will be verified when the taxpayer declares a value below the criteria contained in the Instructions for verifying real estate values, published annually on the ATC website. Conversely, the declared value will not be verified when all the conditions established in these instructions are met (cadastral value multiplied by the corresponding coefficient).

If the verified value obtained is higher than the declared value, the taxpayer will receive a proposed supplementary assessment, against which he may submit any allegations and evidence he deem relevant. If the ATC confirms the supplementary assessment, the taxpayer may also choose, within period for lodging the appeal, to file a contradictory expert appraisal. The filing of a contradictory expert appraisal suspends the execution of the assessment.

Buying a new-build home or a second-hand home involves important differences.Below, we compare the main pros and cons in each case to help you decide.

New-build homes 

✅ Pros:

1. Modernity: With more open and functional spaces, designs adapted to market trends and current technologies.
2. Greater energy efficiency: They usually incorporate better insulation, more efficient air-conditioning systems and sustainable materials, which means significant savings in energy consumption.
3. Less need for renovations: Everything is new and in perfect condition, so there's no need for immediate renovations or repairs.
4. Easier customization: Buying off-plan often offers the option of customizing the finishes, allowing the home to be tailored to the buyer's needs and tastes.
5. Developer guarantees: With legal protection through guarantees that cover structural defects (ten-year guarantee), which affect the habitability of the property or the finishes of the construction.

❌ Cons:

1. Higher price: They tend to be more expensive than a second-hand home.
2. Peripheral location: They are usually in new or expanding neighbourhoods, further from the center, not always well-connected and with fewer services.
3. Delivery times: If you buy off-plan, there may be delays of several months or even years.
4. Less flexibility to negotiate price: Developers usually have fixed prices.
5. Additional costs: These include VAT (10%), notary fees and other costs that are not always applied in the same way to second-hand properties.

Second-hand homes

✅ Pros:

1. More accesible price: They tend to be cheaper, and there's more opportunity to bargain, especially if the seller is in a hurry to sell.
2. Central or consolidated location: They are usually in well-connected areas, with all the services and social life.
3. Immediate availability: In many cases, you can move in within a few weeks.
4. Possibility of custom renovations: The home can be adapted acoording the buyer's preferences and budget.
5. More variety in the market and unique character: There is usually more choice depending on the area, size and price. Also, sometimes you can find old houses with charm or with special and unique architectural elements.

❌ Cons:

1. Need for renovations: They often require renovation, with which can be costly. This implies an additional cost and extra time to make repairs or renovations.
2. Poor energy efficiency: They tend to have poorer insulation and less efficient air-conditioning systems.
3. Greater hidden risk: There is a greater likelihood of structural problems, dampness or poor installations that are not always visible to the naked eye.
4. Higher maintenance costs: Older buildings require more frequent community fees.
5. Fewer legal guarantees: There is not the same legal protection as in new construction.

In short, the choice between one option or another will depend on the priorities and needs of each buyer. If you prefer a modern, efficient and ready-to-live-in property, a new build may be the best option. On the other hand, if you are looking for a property with a certain charm, located in an established neighbourhood with services and at a more affordable price, a second-hand property may be the ideal choice.