An Interview with Antonio Cobo González | Cobo y Blázquez Law Firm

We had the pleasure of interviewing Antonio Cobo, a senior lawyer at the prestigious Cobo y Blazquez Law Firm in Marbella. This interview will delve into his experience in real estate law and taxes in Marbella. We start with his personal journey into law and his perspective on the real estate market in Marbella over the past year. We also explore recurring mistakes that can occur in real estate transactions and the importance of having a local real estate lawyer. Finally, we touch on some of the controversies surrounding wealth taxes and mandatory capital gain tax retention for non-resident vendors.

Can you tell us about how you got into law? Was it a career that you always knew you wanted to pursue?

I didn't always know that I wanted to pursue law. It wasn't something that I was particularly interested in when I was younger, and I wasn't paying much attention when my relatives talked about work. My family never really pushed me to pursue law. It was something that I decided on my own. But years later, I realised that studying law could open up many doors for me, both in practising law and potentially starting my own business. I did feel like it was a good fit for me, and I'm glad I decided to pursue it.

How would you describe the Marbella real estate market over the past year, and what are your predictions for 2023?

Despite the negative news about the world economy and inflation, the Marbella Real Estate market has had a very good year, which was a bit unexpected. We have seen an increase in better clients and products, which has probably been one of the best years since I arrived in Marbella. This year, January and February have been very active, with important transactions taking place, and we expect this trend to continue throughout the second and third quarters of 2023.

In your experience, what recurring mistakes have you noticed in real estate transactions that could be avoided with better knowledge and preparation?

As someone with years of experience in the real estate industry, I have encountered a recurring issue that can cause clients stress and wasted time. When clients purchase a property and then decide to embark on a new project, such as building or remodelling, they may encounter difficulties if they are not present to oversee the work or do not have a reliable team. This can result in delays and regret over the changes made. It is important for clients to be aware of the challenges that can arise when working remotely and to have a trusted team in place to oversee the project. I have found that maintaining open communication and keeping clients informed every step of the way is key to a successful transaction. We work hard to find solutions that work for the client and ensure they are satisfied with the result. At the end of the day, our goal is to make the process as seamless and stress-free as possible for our clients.

Can you explain why some clients buy properties through a Spanish company they set up? Is it for reasons related to privacy or better organisation when purchasing multiple properties in different countries?

When buying multiple properties in different countries, clients often prefer to purchase property through a Spanish company for various reasons, such as privacy or better organisation. By opening a Spanish company, they may only need to pay a 2% transfer tax instead of the standard 7%, making it more cost-effective. This structure can provide more flexibility, especially for investors who plan to flip or rent the property and sell it in the future. However, it's important to have a clear investment purpose to properly structure the company and avoid unnecessary costs if the property is intended for personal use.

What is your perspective on the importance of having a local real estate lawyer for families purchasing property in Marbella versus someone from abroad?

In our experience, we highly recommend having a local real estate lawyer, although some families may not initially see its value. We have had many cases where clients are extremely grateful for our service, including being available on weekends to help with legal and practical details related to the property, such as finding a good builder or architect and addressing any problems that arise. It can be challenging to have a lawyer from a different city or country, even if they come from a reputable law firm. We recommend having someone local, even if not us, to ensure quick response times in urgent situations. Additionally, Marbella has specific technicalities and peculiarities that a foreign lawyer may not be aware of, which is important to consider. Most of our clients are non-residents, and we strive to help them whether they are present or absent for various reasons.

What is your view on the controversy surrounding the wealth tax that was introduced in 2012 and subsequently cancelled last year?

The wealth tax has been a controversial subject since its introduction in 2012. The tax applied to owners of properties and assets valued over €700,000 per owner, and there was much talk about the possibility of cancelling it. Last year, at the end of the quarter of 2022, the Andalusian government decided to cancel the wealth tax to attract investors and create a positive and fair environment for non-residents. It was felt that non-residents should not be taxed on something they already pay for in their home country, especially when they own a property abroad. However, there was news that the Spanish government had approved the "solidarity tax on fortune" for 2023 and 2024. Until further notice, any Real Estate investor with properties valued at over 3 million euros will have to pay the new "solidarity tax on fortune".

Could you explain the mandatory 3% retention that occurs when a non-resident vendor sells property in this country? How does it differ from practices in other countries?

In simple terms, capital gain tax retention is a deposit that non-resident sellers must pay to ensure that they pay the appropriate amount of tax on any profits made from selling property or assets. This deposit is not a cost or an expense, but rather a guarantee that the seller will fulfil their tax obligations. The tax authorities will review the seller's documents and determine if there is a profit to be taxed. If the seller does not make a profit, they will receive their deposit back. This process can take between six to twelve months, but we have not seen any cases where the tax authorities have kept the deposit when there is no profit to be taxed.