Spanish Tax Agency and Social Security auctions

What are administrative auctions?

They are auctions a public body calls to collect a debt owed to it, by selling what it has seized. They are run neither by a court nor by a notary but by the collection body itself. The two that matter most to property buyers are those of the Spanish Tax Agency, for tax debts, and those of the General Treasury of the Social Security, for social security debts. Each has its own regulation: Royal Decree 939/2005 for the Tax Agency and Royal Decree 1415/2004 for Social Security.

How do Tax Agency auctions work?

Since 1 September 2018 tax auctions are held on the BOE auction portal, the same one used for judicial auctions. There is a single electronic auction (article 100.2 of the General Collection Regulation), and you register on the portal just as you would for a judicial auction (article 103.2).

• Notice: published in the BOE, with the auction opening at least 24 hours later. Before that, at least 15 days must pass from notifying the debtor and other parties (article 101.2 and 101.3).
• The reference price does not include indirect taxes on the transfer, and the notice must say so (article 101.4.b).
• Bidding: twenty calendar days. Each bid is published at once and the outbid bidder is notified. The auction does not close until an hour has passed since the last bid, with an extension of up to 24 hours (article 104.2 and 104.3).
• The debtor can free the assets by paying the whole debt until the award record certificate is issued or the deed is signed (article 104.4).

Deposit in a Tax Agency auction

5 per cent of the reference price if the lot is or includes a property, and 10 per cent if it is movable assets only (article 103 bis.1). It is paid through the portal, with the same payment gateway as a judicial auction. When bidding you state whether you want your deposit held in case the best bidder fails to pay; if you bid at or below the highest offer, it is held automatically (article 103 bis.2 and 103 bis.3).

How to bid in Tax Agency auctions: the award

Once bidding closes, the auction board meets within fifteen calendar days. If the best offer reaches 50 per cent of the reference price, it awards. If not, it decides in the public interest, with no minimum price, whether the offer is enough or declares the auction void. Once notified of the award, you have fifteen days to pay the difference over the deposit (article 104 bis). For a property you may ask, within five days, for the sale to be executed as a public deed, with an extra payment of 5 per cent of the winning price (article 111.1).

How do Social Security auctions work?

The Social Security General Collection Regulation, in its consolidated text, describes its own procedure, not the portal's. The notice is published on the bulletin board of the Social Security e-office (article 117.1). The period to submit offers is at least one month (article 116.1). Bids are submitted in a sealed envelope at the Treasury's provincial office handling the file, with a certified or bank-endorsed cheque for 25 per cent of the reference price (article 118), and at the auction itself oral bids from 75 per cent of the reference price are allowed, with an on the spot deposit of 30 per cent if no envelope was filed (article 120.2 and 120.3).

• At the first auction, without oral bids, the sale is approved if the best bid exceeds 60 per cent of the reference price or covers the whole debt; for property, never below 25 per cent of the reference price (article 120.5.a).
• If the best bid is below 75 per cent and does not cover the debt, the debtor has three working days to bring a third party who raises it to that 75 per cent (article 120.5.c).
• The winner pays the rest within five working days (article 120.8).
• Whatever is not awarded goes to a second auction, where exceeding 50 per cent of the reference price or covering the debt is enough, with the same 25 per cent floor for property (article 120.7).
• The Treasury may exercise a right of first refusal within 30 days at most and keep the asset, returning your deposit and anything you paid (article 121).

What changes compared with a judicial auction?

What is a direct award?

It means selling without an auction, to the best offer received. For the Tax Agency it applies when assets remain unsold after a tender, for perishable goods or urgency, or when competition is not possible or advisable for justified reasons (article 107.1). It is announced on the e-office, offers are submitted online and, if they do not reach the minimum price, the assets may be awarded without one (article 107.4 and 107.5).

For Social Security, the provincial director may authorise it exceptionally when the second auction is void and the asset is not awarded to the Treasury (article 123 bis.1.a). There is then no minimum price, but for property an offer below 25 per cent of the reference price only stands if someone present at the event offers that percentage orally (article 123 bis.4), and the buyer of a property cannot assign the right to a third party (article 123 bis.6).

What happens to charges?

The logic is the same as in a judicial auction. In both administrations, charges prior to the seizure are deducted from the valuation to set the reference price and remain in place, with the sale price not applied to clear them (article 97.6 of the Tax Regulation; article 111.2 of the Social Security Regulation). The notice must state which charges survive (article 101.4.e of the Tax Regulation; article 117.2.b of the Social Security Regulation), and the award comes with an order cancelling later ones (article 111.3 of the Tax Regulation; article 122 of the Social Security Regulation).

Bidding in an administrative auction carries risk: surviving charges, occupancy, short payment deadlines and an uncertain final price. This guide is for information only, reflects the wording of the regulations at the update date and does not replace professional advice on a specific deal.