• Real estate valuation: In principle, any person, application, computer programme, etc. can carry out a valuation, with valuation being understood as giving an approximate value for a property. There are many websites and applications on the net that make valuations for free or at a very good price. Valuations can also be done by real estate agencies or other agents related to the real estate sector. These valuations are not officially valid with any agency.
• Valuation report (carried out by a competent technician): This type of valuation can be called by many different names; valuation, appraisal, valuation report, etc., but what defines them is that they are signed by a competent technician: architect, technical architect, engineer, technical engineer, etc. These valuation reports are valid before any administration or body, as long as the technician accredits his or her own knowledge of the subject matter to be valued. The only exception would be if the purpose of the report is for mortgage purposes.
• Mortgage appraisal: This is a real estate appraisal issued by an approved appraisal company. It must be signed by a competent technician (the same as in the previous case) who collaborates with an appraisal company. The appraisal company will supervise the work of the appraiser. Mortgage appraisals are usually carried out in order to apply for a mortgage from a bank, although they are also valid in other cases.

Appraisals are used to determine the value of an asset, i.e. the price that the product will have if we are going to buy it.

Qualified professionals, using the methods established by the regulations, obtain a current value of the asset, equivalent to the value of the asset on the market. The professionals who carry out the appraisals will not assign any sentimental value to the property being appraised.

For example, it is very common to appraise a property in order to apply for a mortgage, in this way, the bank knows the value of the property, a value adjusted to the real market prices.

Another very common case is the appraisal of a property for divorce; in the event that a married couple is in the process of divorce, the appraisal of the property serves to know the market value of the property, which is very important for the subsequent distribution of the assets to be adjusted to reality.

Judicial appraisals are also very common. The typical case is when there has been an accident and a value has to be given to the property or goods that have been damaged; either to request it from the insurance company or from the party responsible for the accident.

In the courts, a lot of value is placed on professional valuations, as it is very difficult to quantify the value of a property, which is often necessary to resolve a dispute.

Now we are going to focus on the second case: valuation reports carried out by competent technicians. Why should they be carried out? In most cases, because we are required to do so by a public or private body or agent in order to carry out some procedure. Why not have an appraisal carried out by an approved appraisal company? Because they are more expensive and, in many cases, less accurate.

In fact, the same technician can carry out all three types of valuations depending on your needs. For example, if you only need an approximate value without any liability, he or she can give you an unsigned valuation at an affordable price. And if you collaborate with an approved appraisal company, he can provide you with an appraisal through that company, although he will assign part of the fees to that company.

Even within the range of the valuation report, we can establish with the technician different types of precision, depending on the purpose for which the document is intended. This is not possible if we do it through a valuation company. For example, it is not the same to value a house, in which we can make precise measurements, draw up the plans and analyse all the conditions conscientiously, as it is to value an inheritance of 20 properties in different parts of Spain, including parking spaces, cars, niches, etc.

It should be noted that any competent technician can, in principle, value any property. It will be your responsibility to know whether you are qualified to value such property or not.

Types of valuation reports:

Let us divide valuation reports according to their purpose. The purpose of the report is a fundamental determining factor when drafting the report and it is important that the technician who drafts the report knows what it is and that it is even recorded in the report itself. To outline the different purposes of a valuation, we are going to divide them according to the body to which they are to be submitted:

1- Valuations for the Inland Revenue

The Inland Revenue is understood to be both the Spanish Tax Agency and the different regional tax authorities. There are two types of valuations that can be carried out by a competent technician for the Inland Revenue: that of a party expert and that of a third party expert.

Let us look at a specific case. An individual buys or inherits a property, for example a house, and the tax authorities assign a value to it. This value is independent of the price for which the house was sold. It is a valuation made by an Inland Revenue technician according to the regulations in force at the time, and the taxes (transfer tax, inheritance tax, etc.) that the individual will have to pay will depend on this valuation. The owner of the house finds this valuation abusive and believes that his house is worth much less. For this reason, he has to hire a competent technician to draw up a valuation report. This technician would act as the appraiser or second appraiser.

Once it has been submitted, the tax authorities have two options: to accept it without further ado (which is usual if it does not differ by more than 10% from the original) or to refute it, for which a third party expert will have to be called in to settle the dispute. This third party expert is no more or less than an independent technician who is on a list of experts. These lists are an agreement between the tax authorities and the professional associations (of architects, engineers, etc.) or other competent bodies. The third party expert is completely independent, because even if the tax authorities call him/her, he/she will receive his/her fees regardless of who he/she is in favour of.

2- Valuations for the Court

This case is similar to the previous one, in the sense that there will also be two types of valuations: that of a party expert and that of a third party expert. The characteristic is that there has to be a dispute between two individuals.

Let us look again at a concrete case. One individual has a dispute with another and there are assets to be divided. It may be the case of a divorce, an inheritance or any kind of property distribution. Each litigant submits a valuation report drawn up by a competent technician, who acts as the party's expert. As each expert's valuation is very different, the judge calls in a third expert to settle the dispute once again.

The third party expert will be any competent technician who is on a list of judicial experts, drawn up by the professional associations for the courts. This third party expert will be completely independent because he/she will not know any of the litigants and will receive his/her fees regardless of who wins.

3- Valuations for expropriation

In this case we do not indicate the specific administration before which you will have to present the valuation report, because they can be very diverse. It can be the general, regional or local administration. The reasons can be very diverse, but they must always be of general interest, such as the construction of roads, ports, airports, etc.

When an administration informs an owner that it is going to expropriate his property, e.g. a farm, it will offer him an amount. If the owner does not agree, he will have to submit a valuation sheet. This document is, or should contain, a valuation report. Ultimately, if the two parties do not agree, the matter may end up in court, which would be the case above.

A specific case of a valuation report for expropriation is that of the expropriation of parts of premises or a dwelling for the installation of a lift. In this case, the expropriating agent would be the Community of Neighbours. Both the Community of Neighbours and the owner of the expropriated property can use an expert to draw up their own valuation report.

4- Valuations for the Notary

There are times when the notary may request or recommend a valuation report for different reasons, such as in the case of legacies, inheritance during life, distribution of assets, etc. It is also common to submit valuation reports in order to draw up deeds for assets included in legal proceedings.

What assets can be valued and who can do it?

In principle, any type of movable or immovable property can be valued. The competent technician who can value each asset will depend on his or her qualifications and experience.

For example, architects and technical architects are fully qualified to value any type of building, home, premises or parking space, as well as any type of urban, urbanisable or rural land. They are also qualified to value buildings under construction, works on buildings or constructive damage, although the latter would fall more into the category of expert reports than valuation reports. They can also value other types of property with greater or lesser solvency, although due to their inability to demonstrate their specific training in the field, their reports may not be taken into account by certain administrations. This may be the case for the valuation of rural properties, wells, bridges, public furniture, automobiles, boats, etc.

For this reason, the most advisable thing to do, and this is what the administration does when looking for a third party expert, is to have each asset valued by the most qualified professional a priori. For example, for the valuation of an inheritance of different assets, the Inland Revenue usually entrusts the valuation of buildings (including premises, premises, homes, offices, parking spaces, etc.) and urban properties to an architect or technical architect, rural properties to an agronomist engineer, cars to an industrial engineer or automotive technician, etc. However, if you want a party appraiser and you need to value many different types of property, you can try to hire a single technician to make it cheaper, who has specialised training in the most valuable assets or those where there are the greatest discrepancies.

As this is such an important transaction, it is advisable that both buyer and seller use the services of a lawyer to prepare the contract and, if necessary, the pre-contract, and to confirm that it contains everything necessary to carry out the transaction in accordance with the will of the parties.

These services will add to the costs of the operation, in which it is also necessary to take into account that the parties may use other types of professionals, such as real estate appraisers who issue a report on the real value of the property, or real estate agents whose services they will have to pay for.

Once the purchase contract has been signed, the next step for the buyer is to go to the Land Registry with the title deed of the property in order to register it. This procedure is not compulsory, but it will officially certify the change of ownership. For this, the deed must have been signed in the presence of a notary, which means that it will be made public.

These are all aspects that must be taken into account when selling or buying a property. One of the most recurrent "absent-mindedness" is that the owner of the property does not have an Energy Efficiency Certificate to sell a flat.

This can happen due to a lack of knowledge of the regulations or due to a premeditated intention to avoid the costs of hiring a technician and paying the corresponding fees at the municipal registry, which will depend on each autonomous community. However, the law is clear in this regard and provides for fines if the requirements are not met.

At Certicalia we have qualified technicians in your area. Ask for a quote indicating the details of your home and choose the professional that best suits your needs.

• INCOME TAX. If you are the owner of the property and reside in Spain, you will have to pay Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas). This is because the capital gain has to be reflected in the tax return. If, on the other hand, you are not a resident, you will have to pay non-resident income tax.
• IBI receipt. The Real Estate Tax is the tax that is levied on the ownership of real estate. In other words, it is the tax that grants the right to own property or the right to own land, among others. It depends on each municipality and is based on the cadastral value of the property set by the competent body of each autonomous community.
• Municipal capital gains tax. Its official name is Incremento de Valor de los Terrenos de Naturaleza Urbana and represents the increase in value conferred on urban land at the time of transfer of ownership. It is one of the most questioned taxes on the sale of housing, as until 2017 it was charged even if there were losses. Therefore, from that moment on, the Constitutional Court annulled this tax in those cases in which losses are accredited.
• Cancellation of the mortgage and notary fees. It may happen that you have not yet finished paying the mortgage, something very common considering the economic panorama of our country. In these cases there are two options: to cancel the loan early or to subrogate the mortgage, that is to say, that the new buyer assumes the debt demanding a reduction in the price. In both cases, commissions will be applied. In addition, a registration cancellation of the debt will have to be made, which can vary between 300 and 1,000 euros.
• Energy certificate. This is a document that reflects the energy consumption and CO2 emissions produced by the home. It has been compulsory since 2013, as it is not possible to sell or rent a property that does not have an A to G rating. It is very important to take this into account, otherwise penalties may be applied.

Now that you know what taxes the seller assumes in a real estate sale and purchase, you should be cautious about the costs you assume, as these are not small. In addition, you must make sure that the property is free of encumbrances in order to be able to sell your property.

Taxes that affect the seller

You are obliged to pay the plusvalia municipal, or what is more legally known as the Increased Value of Urban Land.

This tax is paid to the Town Hall where the property is located, as it is a municipal tax, and we must bear in mind that there are Town Halls that carry out the liquidation themselves and in others we are obliged to present the appropriate liquidation.

However, in both cases, it must be requested within one month of the purchase-sale transaction.

It should be remembered that a few years ago, the municipal capital gain was much talked about because there were numerous legal claims for its recovery, since the developer companies obliged the buyer to pay it, and this was reflected in the notarial deed.

However, after numerous court rulings, there is settled case law in which the obligation imposed on the buyer to pay the capital gain is null and void, and the developers are ordered to return it.

There is a fifteen-year limitation period for claiming this tax; therefore, if at the time of the purchase of a property you were obliged to pay the capital gain, you can claim it back even if the Notary has attested to it in the deed of sale.