Energy Performance Certificate Explained

Raymundo LarraĆ­n Nesbitt, November, 7. 2016

By Raymundo Larraín Nesbitt
Lawyer – Abogado
7th of November 2016

In 2.013 a new law was passed (Royal Decree 235/2013) which requires all buildings in Spain to be issued an Energy Performance Certificate (EPC, going forward). Alternatively, some people refer to it as Energy Efficiency Certificate (or EEC). This change follows in the steps of other countries´ similar regulations, such as that of the United Kingdom. The self-admitted goal of this regulation is twofold; first, it aims to reduce the carbon footprint on our environment by nudging property owners to adopt more eco-friendly energy solutions. Additionally, it also empowers the choice of buyers and would-be renters by allowing them to gauge the energy efficiency consumption of their new home.

The significance of this new regulation is that it affects conveyancing in Spain. All properties being built, sold or rented must now produce this certificate so that a buyer or tenant can examine it and make an informed decision.

I have put up this small FAQ to explain what it consists on and which hopes to address the most commonly related queries.

What is an EPC?

Briefly, it is a report that classifies the efficiency of energy consumption by a home. It assigns an energy rating to each home on a scale which ranges from “A” (the most efficient) to “G” (the least efficient).

Who needs an EPC?

All properties in Spain being:

  • built
  • sold
  • rented

 

When is an EPC required?

  • On renting: this includes holiday rentals. The EPC will be produced by the landlord at the time of signing a Tenancy Agreement. A photocopy of it will normally be attached to the contract.
  • On selling: whether it is a resale or new-build property, it is necessary to attain it prior to completion. A Notary witnessing completion will demand an original EPC as part of the vendor’s paperwork.

 

Duration of the EPC?

Ten years. After said time it must be renewed.

Consequences of not attaining an EPC?

  • A Private Purchase Contract on a property can be annulled.
  • Your Autonomous Community, where your property is located, may fine you on selling or renting without it in breach of Consumer Rights regulation. Fines range from €300 (light offence) up to €6,000 (very serious offence).
  • The vendor or landlord may be forced to compensate a buyer (or tenant) for any damages caused.

 

EPC has Tax Benefits

Depending on the energy rating assigned to your home by the EPC, you could apply for a tax rebate from your local town hall as from 2.016 on paying IBI tax (akin to the UKs Council tax). The tax rebate follows a sliding scale; the higher the energy efficiency rating, the larger the tax discounted.

Letters "F" and "G" are not eligible for a tax discount.

•    “A” rating: 20% discount
•    “B” rating: 16% discount
•    “C” rating: 12% discount
•    “D” rating:   8% discount
•    “E” rating:    4% discount
•    “F” rating: nil
•    “G” rating: nil

How much does it cost?

Prices vary widely; from low (providing your command of Spanish is spotless) up to several hundred euros (companies that can communicate with you in English). To this you must add VAT.

Besides the language requirement, the constructed surface of a dwelling influences as well the asking price of this certificate.

If you are being quoted more than €300 you are likely being overcharged (unless it is a villa).

Where can I get one?

Our law firm can arrange this service on your behalf for a flat fee of €300 plus VAT.*

*large villas have different fees

Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, taxation, inheritance, and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

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