Common real estate terms unravelled

LPO (First Occupancy License)

LPO, or First Occupancy License, is a legal document issued in Andalusia. It confirms that a property has been constructed in accordance with approved plans and meets all necessary regulations and standards. If you intend to rent out your property, this document is essential.

• Issued by the local town hall.
• Approved plans
• Meeting all regulations and standards

Nota Simple (Property Registration Document)

The Nota Simple is an official document that provides vital information about a property in Andalusia. It verifies ownership, legal status, physical details, and any registered charges or limitations on the property.

• Verifies ownership.
• Charges or limitations on the property.

Plusvalia (Capital Gains Tax)

Plusvalia refers to the municipal tax on the increase in the value of urban land during its transfer or sale. The tax calculation considers factors such as plot size, ownership period, and local tax rates. It’s important to note that the Plusvalia tax is generally the responsibility of the seller or transferor of the property.

• Municipal tax / capital gains tax calculation.

Cadastral (Unique Property Registration Number)

Cadastral refers to the system of land registration and property identification. It assigns a unique reference number to each registered property, facilitating legal ownership verification and property-related transactions. In Andalusia, the Cadastral system plays a crucial role in property taxation, urban planning, and land management.

• Property identification.
• Unique reference number.
• Urban planning and land management.

Transfer Tax (ITP) and IVA (VAT)

Transfer Tax, or ITP, applies to property transfers in Andalusia. Rates vary based on property type and value. New properties subject to VAT have a reduced ITP rate to avoid double taxation.

• Property taxation

I.R.D. (Initial Reservation Deposit)

The Initial Reservation Deposit, or I.R.D., is a commitment deposit made by property buyers in Andalusia. It secures the property for a specified period, demonstrating the buyer’s intention to proceed with the purchase.

• Removes property from the market.
• 10 days typical due diligence.

P.P.C. (Pre-Purchase Contract)

A Pre-Purchase Contract, or P.P.C., is a legally binding agreement that establishes the terms and conditions of a property purchase before the final deed is signed. It covers key aspects such as property details, purchase price, and completion date.

• Forms the property purchase schedule to include the completion date.

Escritura (Title Deed)

The Escritura is the legal document that transfers ownership of a property in Andalusia. It establishes ownership rights, contains property information, and is signed by the buyer, seller, and a notary public.

• Property title deeds