On 15th of June 2016 the following basic decision was made by the Supreme Court (Tribunal Supremo, Sala de lo Civil): The seller can pass on the property tax to the buyer from the date of delivery of the property.
The crucial case for this judgment (nº 409/2016) was the following:
On 16th of March 2009 two companies have sold 155 parking spaces to a third one in Madrid. For the period from 16th of March to 31st of December 2009 the buying company took over the property tax. It has compensated the sellers with a monetary amount of 8,562 Euro. Previously the sellers been claimed by the tax authorities for 2009 in full.
First, the Court of the First Instance in Madrid ruled this case in favor of the buyer. Thereupon, the sellers applied to the Supreme Court (Audiencia Provincial). In their appeal the applicants stressed the existence of contradictions in the jurisdiction of the District Courts regarding this matter and submitted judgments that sporadically have emanated in favor of the buyer or in favor of the seller side.
Finally, the Supreme Court (Tribunal Supremo) decided a general principle: In the case of a non-agreement, the seller who pays the property tax in general, can pass it on to the buyer in a proportion related to the period of time in which the buyer owns the property. According to the Spanish Law Ley de Haciendas Locales (on local tax offices) the party, which holds the title of the property for the first day of the calendar year, has basically to pay the annual property tax, who was the seller in this regard.
Generally the case is neither classified as a sale with tax implications nor as a tax and expense free sale.
In the view of the Supreme Court the Article 63.2 of the Spanish Law Ley de Haciendas Locales provides that even without an agreement the buyer is also able to pass on his or her liability to pay the property tax to the seller. In this sense the parties could share the property tax under the articles of the Spanish Civil Law (Art. 1445, Art. 609 del Código Civil). Regardless to that the parties are also able to reach the agreement that the seller is not allowed to pass on the property tax.
In the case of a non-agreement the general principle mentioned above is applicable.
You can find the judgment (nº 409/2016) at: