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Spanish admin residency = Spanish tax residency

Raymundo Larraín Nesbitt, March, 1. 2022

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists has a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Lawyer - abogado
1^st of March 2022

Increasingly, more and more people are realizing that applying for Spanish residency has in fact tax consequences. I keep seeing this mistake being made over and over again.

A common misunderstanding on applying for Spanish residency is the matter of tax residency.

I have witnessed how several companies, and so-called ‘advisors’, purposely missell residency permits in Spain without properly disclosing to applicants the tax implications of their decision.

I’ve written again another short article on this matter as a gentle reminder.

The golden rule: Spanish residency permit = Spanish tax residency

Although – technically – it is true that admin residency and tax residency are two separate legal concepts, the fact is they eventually go hand in hand in most cases.

As a general rule, the following golden rule applies:

Spanish residency permit = Spanish tax residency

Without going into detail on the whys and why not's, the reason is that as a staple requirement all visas in Spain require on renewals you categorically prove you have lived in Spain long term; defined as spending over 183 days within a calendar year in Spanish territory.

The tax implication of this is that it automatically triggers tax residency in Spain.

Example: Mr. Smith applies and attains a Non-Lucrative Visa in May 2021 to avoid the pesky 90/180-day rule. In the following year (2022), unbeknownst to him, he must file personal income tax in Spain (IRPF) on the previous year because he has now become a Spanish tax resident (depending on the case, he may also need to file a 720).

If Mr. Smith challenges the tax residency status, on grounds that he did not spend over 183 days in Spain during 2021, he will be stripped of his residency permit.

In other words, they go hand in hand. You cannot have one without the other or your visa renewal will be turned down, period.

Is there any exception to this general rule?

Alas, yes.

It’s a special type of residency permit called Golden Visa (Investor Visa).

A GV allows its permit holder to bypass the 90/180-day rule. It also allows its holders' unfettered access to Spain. They may enter and leave as they please (even circumventing Covid restrictions).

Attaining a Golden visa, unlike every other visa in Spain, does not automatically make you tax resident in Spain and the reason being is because renewals are not tied to proving you live in Spain long term (which triggers tax residency), but rather that you have maintained the investment over time in Spain.

This nuance is extremely important and goes on to explain why Golden Visas are so special and why they are so sought after by affluent applicants as they do not preclude your tax residency on application.

As a recap, a Golden Visa allows you:

To legally bypass the 90/180-day rule
Unfettered access to Spain
Do not automatically make you tax resident in Spain (unlike every other visa in Spain)

LNA has a 100% track record attaining Spanish residency

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

At Larrain Nesbitt Abogados, we have assisted hundreds of EU and non-EU nationals to successfully attain a Spanish residency permit.

Interested? Come and speak to Larraín Nesbitt Abogados’ friendly staff who will be pleased to guide you through the different residency options, choosing the one that appeals to you most. Your family’s success is only one call away: (+34) 952 19 22 88.

Residency services available from LNA:

Related visa articles

Investor Guide to Spain’s Golden Visa Law – 8th November 2013
Spanish Golden Visa (New York Times – China edition) – 8^th July 2015
Golden Visa Spain – 8th June 2017
Golden Visa Spain – 8/8/18
Golden Visa Spain: 10 frequently asked questions – 8th October 2019
Relocating to Spain? We offer a wide range of Immigration & Residency services – 8th January 2020
Golden Visa for British investors – 21^st January 2021
Spanish Golden Visa for British, it’s retroactive! – 8^th February 2021
EU-family regrouping (Marriage Visa) – 8^th March 2021
Lucrative visa (self-employed) – 8^th April 2021
Non-lucrative visas explained – 8^th May 2021
How to spend over 90 days in Spain – Residency visa overview – 21^st May 2021
I want a Spanish visa, but I don’t want to pay any taxes in Spain – 1st August 2021
Is age a thing on requesting a Spanish residency permit? – 11th November 2021
Spanish residency permits and tax residency – 21^st January 2022
Spanish admin residency = Spanish tax residency – 1^st March 2022

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

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2021: one of the best years in property sales on record!

Raymundo Larraín Nesbitt, February, 21. 2022

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Abogado - Lawyer
21^st of February 2022

As we had been pointing out over the last year, a series of factors have built up to create excellent buying opportunities. Real estate experts share a general consensus that now is the right time to buy property in Spain, specifically in Andalusia.

We collated and reviewed at length the reasons behind this property boom, specifically in the region of Andalusia in our article: Tax breaks on buying property in Andalusia extended indefinitely! – 8th of December 2021

As El Mundo, the second most important newspaper in Spain, reported last week, 2021 became one of the best-performing years in property sales since 2007. It ranks only second to the historic property boom that lasted a decade in Spain (1998 – 2008) and turned thousands of investors into affluent people.

2021 saw 565,523 house sales. We need to go back 14 years to witness such a good year. This is almost a staggering 35% increase in property sales year-on-year.

Out of all of Spain, Andalusia ranks as the number one region in increase of property sales, along with La Rioja (no beach), with a whopping 43% YOY. Andalusia ranks in Spain as the third region by overall number of property sales.

And within the region of Andalusia, Malaga province shines and crowns itself as the best-performing province by number of property sales. Some districts in Malaga have appreciated in value by over 40% over the last two years (source, source, and source)! If that is not a property boom, then frankly I don’t know what is.

I am not going to repeat all the reasons - that I have been collating in several articles – which explain this real estate success. Suffice is to say that the main one is the massive, and I mean MASSIVE, tax reduction which turned Andalusia into the number one region in Spain with ultra-low taxation, besides Madrid.

If you like paying little to no taxes, Andalusia is your kind of place.

Malaga, Europe's Southern California – 5^th June 2021

Clearly, the best two ways to hedge your savings in a high-inflationary context are gold and real estate; traditionally investor’s save havens during uncertain times.

Can you afford to miss out on the property boom?

At LNA we can assist you buying, selling or renting out your property in Spain. We have 19 years’ experience in conveyance & tax. We are also specialized in Immigration & Residency permits.

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

Larraín Nesbitt Lawyers is a law firm specialized in taxation, inheritance, conveyancing, residency, 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 to book an appointment.

Related services:

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Voluntas omnia vincit.

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Spain to approve new Housing Act

Raymundo Larraín Nesbitt, February, 12. 2022

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years' taxation & conveyancing experience at your service. We offer a wide range of over 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
12^th of February 2022

Introduction

Spain’s social-communist government is on the verge of approving its much-vaunted Housing Act, despite all the technical opposition to its wording. I stress, technical not ideological.

I am going to make an effort to preface the article strictly from a technical point of view on why this new law should not be approved, or else requires to be heavily amended before approval.

In the article’s conclusion, I will return to review this new law and throw in my own personal views and rant on why it is being passed, and its significance on the overall market.

As a closing comment, I’ve had to self-censor my article again for political reasons. In its original form, it was over 4,500 words long with down the rabbit hole ramblings. This ‘politically correct’ abridged vanilla version - that doesn’t make my staff sweat - is only 2,500 words.

I’ll bite my tongue on this one, for now.

Spain’s new Housing Act

I had already reviewed the draft law in a scathing article from last November: Spain’s New Housing Act – 8^th November 2021.

This law is, for lack of a better word, a legal aberration. It’s a political concession from the socialist coalition to its radical left-wing partners (read communist) to remain in office. In other words, if the socialists refuse to pass it, the communist element will break up the ruling coalition and anticipated elections need to be called.

As is mandatory, by law, the Consejo General del Poder Judicial (CGPJ, for short, Spain’s Judicial Committee) needs to issue a technical report on the draft of this new law. In a scathing report from 11^th of January 2022 it voted against it. Although it is true their technical report is not legally binding, it cannot - and should not - be ignored by the ruling government.

The CGPJ gave basically the same three reasons I highlighted back in my November 2021 article:

The new law invades devolved competencies of regional governments on housing matters, attributed no less than by Spain’s Constitution from 1978, the highest law in the land (ex Art. 148.3 CE).
It introduces a plethora of undefined grey areas, left to ulterior regulation to develop, which creates substantial legal insecurity to property owners and investors. In effect, it moves the goal posts of a free-market economy and draws it ever nearer to a planned economy, where the price of goods and services are no longer determined the law of demand and supply but rather allocated directly by our government (ex Art. 38 CE).
This new law severely undermines the right to private property (ex Art. 33.1 CE)

For all three reasons above, the new Housing Act should not be approved or else requires to be heavily amended to fall in line with the Spanish Constitution from 1978 and other organic laws.

Alternatively, if not amended, Spain’s Constitution must then be amended, along with several other key organic laws, to accommodate the text of this new law as they are conflicting.

As it stands, they are technically incompatible. In despite of it, the social-communist government will plough on and will approve it shortly.

What was the government’s reaction to the CGPJ’s report?

The social-communist’s reaction to this report was basically to shrug it off nonchalantly, going as far as to compare it with the recommended date of consumption on a yoghurt’s lid (sic)! I cannot even begin to word how this is totally disrespectful and inappropriate in a western democratic government subject to the Rule of Law.

In other words, the executive has chosen to completely disregard another power of the nation (judiciary) and dismiss their report altogether. This, once more, shows a manifest disdain for the separation of powers key to any healthy democracy. Without check and balances, it is no longer a democracy, call it what you will.

The significance of ignoring Spain’s Constitution, the separation of powers (judiciary), and the democratic institutions that were created to safeguard and uphold it

Historic digression to follow, apologies.

Spain’s Constitution from 1978 is a hybrid text that amalgamates sensibilities from both left and right-wing ideologies in what was a (successful) attempt to bring peace and prosperity to Spanish society after a bitter civil war followed by 36 years of dictatorship. It helped to reconcile old foes, heal festering wounds, and unite the nation in peace. The Constitution’s Founding Fathers were themselves a reflection of our society; you could find everything, ranging from hardline communists, to ultra right-wing elements and everything in-between.

Fourty-four years on, it is apparent to all the work in fieri undertaken during Spain’s exemplary Transition has brought the country levels of peace and prosperity unheard of since Roman times (Pax Romana). Spain has enjoyed over four decades of relative peace and prosperity marred only by the assassinations of ultra-left-wing (read communist) Basque terrorist group ETA (which killed 857 people, of which 22 were children, murdered in cold blood).

Spain’s Constitution is a political concession from both sides in order to restore order to the land and bring peace and prosperity to us all after Spain’s fratricidal Civil War that killed over 500,000 people, women and children mostly. Any attempt to subvert, undermine, erode, weaken, disrupt or ignore the Spanish Constitution may bring upon us all very nasty consequences, for it is the glue of peace that binds us all in union, as one nation.

Spain’s social-communist government has gone out of its way, and then some more, to alter the status quo from 1978 and has repeatedly attempted to wield control over the independent CGPJ in pursuit of its own ideologic agenda to quash the separation of powers in Spain (for reference, see my blog post on this: Assault on the Judiciary – 16^th October 2020). I’m not going to delve into the importance of separation of powers in a democracy, because I take for granted my reader fully understands its importance in a healthy and balanced democracy.

The (irresponsible) attitude our government displays – day in and day out – continuously undermining our constitution and delegitimizing democratic institutions and powers begins to dangerously mirror the path Maduro’s Venezuela followed to demolish and implode democratic institutions from within, in its relentless path to instal a hardline communist dictatorship.

Flaunting existing key laws (i.e. constitution) and delegitimizing democratic institutions, or taking control over them, is the first step on a stark path leading us astray from democracy’s light and drawing us a step closer to the darkness of a communist utopia.

It would seem that if our social-communist government cannot wield control over the independent CGPJ (judiciary), and by God they have tried multiple times, it then chooses to dismiss its technical reports and carry out a frontal assault on Spain’s Constitution in broad daylight.

This is nothing new for our communist government which has done so repeatedly over the past years through myriad laws and regulations; relentlessly undermining Spain’s Constitution and the right to private property, law by law, day by day, inch by inch. Spain’s moderate socialist element of the government is a willing collaborator of its radical communist partner, and as a result we get landed with biased laws, such as this new Housing Act.

At times we can’t see the forest for the trees.

It’s the bigger picture that really matters, not trivialities such as this new law, which only serves a higher purpose.

Conclusion

Ok, enough of rabbit holes, let’s get back to Spain’s new Housing Act.

This law, as mentioned in my articles from last November ’21 and October 2020, is yet again a frontal assault on Spain’s Constitution, on private property (as enshrined by our Constitution), on the judicial power (CGPJ), on devolved competencies to Spanish Regional Authorities as laid out by Spain’s Constitution, an attack on our free market economy on artificially imposing rental prices and introducing a planned economy that will stifle it (exactly the opposite of what our real estate market needs btw).

In the meantime, our pseudo-communist government will use this law as flagship of its lofty ideals (at the expense of other people’s private property) to garner the vote of a disenfranchised youth with the largest unemployment levels, not only of Europe, but out of all 38 countries that make the OECD.

In my view, Spain’s new Housing Act will bring three main negative effects (amongst many others collated in our October 2020 article):

It will foster the opposite effect it seeks, that is to increase the price of rentals across all of Spain. Fearful landlords will pull out their properties of the rental market, which in turn will impact on price, increasing it as there will be fewer properties to rent.
It will also deter foreign investments in real estate in some regions of Spain (Catalonia, Balearics, Valencia), fearful of the widespread legal insecurity and market interventionism by the communist state this new housing law introduces.
As a result of the above, as mentioned in my November ’21 review, it will fracture Spain into two areas: a free-market area and a planned state economy. The reason being is that this law deals with devolved competencies to regional authorities who are in fact legally empowered to disobey it (resic). Resulting in regions under the control of right-wing policies (i.e. Andalusia, Madrid, Galicia etc) which will not implement it and will in fact openly oppose it; whereas regions under the control of left-wing ideology (Catalonia, Balearics, Valencia) will wholeheartedly embrace the new law and implement it zealously. This will translate into non-resident investments being channelled to the former as opposed to the latter, creating even more unemployment and inequality in regions under left-wing control.

But what is the real impact of this new law? In short, nada.

Borrowing from Shakespeare, it’s much ado about nothing. Because the law in itself will surely be challenged by (right-wing) regional authorities to Spain’s Constitutional Court who will then repeal it for all the reasons the CGPJ meticulously points laid out in its report from January 2022. Granted, this will take several years to unfold. And by the time we have a ruling on this, it is likely a new government will be in office with a different ideology from the communist one now in power.

But this will necessarily take several years to achieve, and in the meantime, and most fundamentally, it will help our communist government to achieve its self-imposed goals and agenda; that is to woo the votes of a disenfranchised electorate and (attempt to) win a new four-year term in office.

If the communist government truly wanted to end the escalation in long term rental prices, that indeed does afflict vulnerable collectives such as young and senior citizens, it could make a two-pronged assault, for it wields the power after all:

On the one hand, it could fiscally incentivize long term rentals (which are the ones these collectives sorely need). For example, why is the landlord’s 60% tax allowance on long term rentals only open to resident landlords? That’s daft. Clearly, it should be made extensive to all non-resident landlords to strongly incentivize long term lets. This discrimination is now being challenged before the ECJ (because it is a clear-cut case of fiscal discrimination against fellow EU nationals) and I hope Spain loses (again). As right now there is no tax incentive on long term lets, landlords logically opt for holiday rentals instead (with lenient tax allowances of 70%, or more) which pushes the price of long-term rentals up (as there are fewer units available on the market because they are being used for holiday lets instead, law of demand & supply, yada yada).
On the other hand, our government and public administrations should make an effort to allow more properties into the market, by way of releasing public land. This would immediately reduce rental prices across the board. This would be achieved by significantly reducing the admin red tape (deregulation) associated to developing land and make use of the vast swathes of land in possession of public administrations all over Spain which, for reasons only known to them, are not being developed as society at large demands. Same as in China, Spanish Public Administrations make a lot of money speculating with land as they levy several taxes throughout its development. Taxes that pay (very) high wages for those privileged few that work in town halls all over Spain (which in most cases are not career civil servants, btw, just cronies of the ruling local political party, whether its left or right-wing).

But I guess that’s just wishful thinking on my part, silly me. It’s much easier to capitalize politically on widespread social discontent on blaming ‘predatory’ vulture funds and ‘wicked’ foreign investors for the rise in rental prices, aha.

Our irresponsible and ideologically-driven communist government will - once more - make use of the new Housing Act, wielding it as political propaganda, in an attempt to fool a large part of our society, specifically the young and unemployed, fuelling their rage and exacerbating social discontent to harness their vote in the upcoming national election; all the while dismissing any opposition to its flagship project as a conceited effort of radical hard right-wing pundits, without giving any merit to the technical considerations on why it cannot be realistically implemented; that is without changing our constitution and organic laws.

Facts no longer matter, only emotions.

Deary me, kind of reminds you of the Brexit fiasco and we saw how that panned out, thank you very much.

“You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time.” – Abraham Lincoln

Abraham Lincoln (1809 – 1865). From an impoverished humble background of corn farmers, this self-taught American lawyer, strategist and politician would rise to serve as the 16th US President. He resolutely ensured a pro-Union victory, strengthened the federal government, modernized the economy, brought about the emancipation of slaves, and preserved the Union. During his tenure, he held presidential elections in 1864 to be re-elected, amid a devastating Civil War that threatened to tear his country apart and engulf it in a sea of darkness; yet he gave example in the face of adversity, holding steadfast to his democratic ideals, steering the ship safely into port and acting as a beacon of democracy which light shone with a fierce intensity the likes of which the world has never witnessed, before and since. Never again would a country hold presidential elections amidst a bloody civil war in what constitutes one of History’s greatest democratic feats to date. But most importantly, he went into great lengths to ensure the festering wounds left open during the fratricidal Civil War were healed; generously reconciling both sides in equal terms, as one nation, indivisible, under God. It is for this very reason, that more than two centuries on, he is widely regarded as the greatest American President to grace the White House; likely the greatest American of all time, towering above the rest. Through his courage and sacrifice, which ultimately would claim his own life, he laid the groundwork of what was to become the greatest and most powerful nation on earth over the next two centuries. A true statesman that would always put ahead of any consideration the best interests of his people, by tearing down divisive walls and fostering at every opportunity union.

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Brexit: one year on

Raymundo Larraín Nesbitt, January, 29. 2022

Image credit: Theophilos Papadopoulos

By Raymond Nesbitt
31^st of January 2022

Today, marks one year since Brexit. Technically two years, as it formally took place on the 31^st of January 2020. However, because of the Withdrawal Agreement, its effects were deferred to the 1^st of January 2021.

So, one year on we are going to take a brief look, weighing in all the wonderful advantages we were promised by silver-tongued conservative politicians. We will also take a look at its disadvantages, surely very few or none at all, as promised.

“Brexit will be easy, and have no downsides. There will be no downside to Brexit, only a considerable upside.” – David Davis, 10^th October 2016, First Brexit Secretary.

ADVANTAGES

Return to blue passports … made in France. Yay!
Return to Imperial Measures. Honestly? Is this really an advantage in today’s world of imports & exports? Looks like a step back to me.
I’m sorry. I must apologize to gentle readers, but for the life of me, I cannot think of anymore. If readers have any advantages to contribute, please kindly email them to me and I will make sure to add them to this post crediting them as is due.

Thank you.

DISADVANTAGES

Uh-oh, looks like we have a few…

Disruption in the supply chain. Increased border controls translate to longer waiting periods which in turn impact on the supply chain.
Price increase. As a result of all the additional layers of red tape the price of goods and services is increased. Meaning less money in our pocket.
Shortage in stock. No, I’m not only talking of issues in the UK, but in Europe. You see, the shortage runs both ways. Because if the United Kingdom has struggled to stock themselves with EU goods, we have also experienced in the continent serious problems to get hold of UK food & goods. There was a time when I could walk into almost any local supermarket in (southern) Spain and get hold of Irn-Bru, Scotch Eggs, Walkers' chips, baby sausage rolls, UK poultry & meat, bacon etc. Well, no longer. Speaking from experience, having worked for several years in a UK exporting multinational, if our companies export and sell less in the EU, this translates into job cuts back home. As a result of it all, the expansive cultural influence and clout the UK once had, which made us stronger, has waned and receded. Tough, innit?
Shortage of staff. All them Europeans who drive lorries and did all the hard menial jobs UK nationals refused (because of low pay and hard working conditions) can no longer be found. This has created a huge shortage of lorry drivers, nurses, waiters etc. that impact in our economy.
Massive increase to red tape. Well, who would have guessed it? As its painfully obvious on leaving the EU, border & customs controls would be increased by implementing full customs checks which impact on all the above bullet points, further exacerbating the problem and compounding it. A God-damn nightmare for all our export companies that rely on the continent to sell their goods. Because let us not forget that the UK’s largest market happens to be the EU. Uh-oh, whatever became of our forward-planning abilities for which the UK was renowned for? Gone with the wind.
Increase of taxes. UK nationals no longer benefit from lower tax rates (in Spain) reserved to fellow EU member states.
Removal of landlord tax relief. As I cared to explain at the time in the articles I list below, I stressed this would be one of the consequences of Brexit. Not a day passes without me receiving a complaint from a disgruntled UK client who can no longer apply for lenient landlord tax relief reserved to fellow EU nationals. As a result, many UK landlords have ceased renting altogether and have put up their properties for sale.
The pesky 90/180-day rule. Restrictions to remain in the Eurozone. No longer can British remain within the EU indefinitely unmolested. Now, they must go through the pain of applying (and with any luck attaining) a Spanish residency permit.
Shattered retirement dreams. As is the case of Roberta Smithee, our seniors, in most cases, can no longer fulfill their dream to retire to Spain to enjoy their twilight years. This is because of immigration rules that apply to all non-EU Nationals (nothing new, these laws were in force well before Brexit). Whereas before Roberta only needed to prove 7,500 euros to qualify to live in Spain, now she needs almost 30,000 euros. In effect, I have to reject every bloody day senior UK nationals who are denied their dreams of retiring to Spain because of the hubris of some deluded self-centred, self-serving conservative politician.
Suppression of ERASMUS programme. This offered a unique opportunity to our youth to explore the continent and close ties with fellow Europeans, broadening their minds and horizons, showing them there is more to the world than just our tiny island nation.
Fostered independence movements. Brexit has undeniably given wings and strengthened separatist movements that now threaten to break up our Union from within. This is by far the most serious error of judgement of our short-sighted politicians. An error that non-Western powers will keenly exploit, day in and day out, as they've already done with Spain, bolstering separatist movements all over. At times, it seems our career politicians play checkers whilst foreign powers play chess.
Less security. Our Intelligence gathering services no longer share information with EU countries, weakening our defence and integrity. Because of Brexit, our families now sleep a little less safe every night.

Conclusion

I know how most people show a manifest disdain for history; hell, even my wife pays no heed to it. But the fact of the matter is that human nature never changes, as classical Greeks always gently reminded us, and the past provides valuable lessons for the present, and even for our future. Lessons we should not ignore.

Alfred the Great, King of West Saxons, sowed the seeds and paved the way to unite all Anglo-Saxon kingdoms into one, creating what in time would be England. A nation that would one day rule the world. It was through unity that he achieved this.

Fast-forward to 1707, the Act of the Union. The four great nations in our land would eventually agree to create Great Britain. And its ‘great’ because all four saw fit and proper to stand united. This is what allowed Britannia to rule the seas and most of the known world, for centuries.

Do you see a pattern? It’s called unity, working together towards a common goal that collectively makes us all stronger.

Fast-forward to our modern day. Because of the unbridled hubris of one man, which I will not name, in a quest to retain power and control over the Conservative party, he called a EU Referendum which led us to this very day. Are we any better because of it? Are we stronger as a nation? Is the influence of the UK in the world stronger than ever? How’s our economy faring? Are goods and services cheaper? Did we sign all those commercial treaties we were promised that would grant us huge commercial advantages?

I’ll leave it to the reader to draw their own conclusions on this.

I want to end, again, by stressing the importance of remaining united in today’s world. Our US cousins, who’ve dominated the world scene over the last 100 years, would have not achieved this if it had not been for the dogged perseverance of one statesman who, against all odds, managed to keep his country united despite a fratricidal civil war that tore it apart. Through his actions and steadfast resolution, he managed to preserve the Union, which laid the groundwork for peace and prosperity in the US over the next two centuries. Our cousins also have the word ‘united’ in their country’s name for something, same as us. We should never forget, or take for granted, the meaning behind it.

We need less career politicians and more statesmen.

There are bears and dragons out there only waiting for a chance to pounce on Western Democracies to further their imperialistic and autocratic agendas. They do everything they can, day in and day out, to undermine and weaken the resolve of our democracies, sowing dissent amongst us. Because they know (divide et impera) this is the key to our downfall and how they will succeed. And the truth is, they are in fact succeeding. Let us not be foolish and play into their hands. We have enough on our plate as is.

“Unity makes strength” – Aesop, Greek fabulist.

Related articles

Living in Spain – UK Government
Spain: register your residency – UK Government
How to Apply for Healthcare in Spain – 8th November 2014
Brexit and You – 21^st February 2018
Brexit and Spanish Residency – 21^st September 2018
How to apply for Spanish residency– 1st February 2019
8 tips for Brexit – 21st February 2019
Brexit and Living in Spain guide (UK Government) – 1^st May 2019
Brexit checklist: it’s the final countdown – 16^th October 2019
Post-Brexit Taxation in Spain – 2^nd March 2020
The human cost of Brexit – 1^st June 2021
Brexit: one year on – 31^st January 2022

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Spanish residency permits and tax residency

Raymundo Larraín Nesbitt, January, 21. 2022

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
21^st of January 2022

A common misunderstanding on applying for Spanish residency is the matter of tax residency.

I have witnessed how several companies and so-called ‘advisors’ are misselling residency permits in Spain without property explaining and disclosing to applicants the tax implications of their decision.

I’ve written this short article to cast some light on this and clarify once for all this topic.

Spanish residency and tax residency

Although – technically – it is true that admin residency and tax residency are two separate legal concepts, the fact of the matter is that eventually they go hand in hand in most cases.

As a general rule the following applies:

Spanish residency permit = Spanish tax residency

Without going into detail on the whys and whynot’s, the reason is because as a staple requirement all visas in Spain require on renewals you categorically prove you have lived in Spain long term; defined as spending over 183 days within a calendar year in Spanish territory. The tax implication of this is that it automatically triggers tax residency in Spain.

Example: Mr Smith applies and attains a Non-Lucrative Visa in 2021. On the following year (2022), he must file personal income tax in Spain because he has now become a Spanish tax resident.

If Mr Smith challenges the tax residency status on grounds that he did not spend over 183 days in Spain during 2021, on his visa renewal, he will be stripped of his residency permit.

In other words, they go hand in hand. You cannot have one without the other or you visa renewal will be turned down.

Are there any exceptions to this general rule?

Yes, it’s a special type of residency permit called Golden Visa (investor visa).

A GV allows its permit holder to bypass the 90/180-day rule. It also allows its holders unfettered access to Spain. They may enter and leave as they please (even circumventing Covid restrictions).

Attaining a Golden visa, unlike every other visa in Spain, does not automatically make you tax resident in Spain and the reason being is because renewals are not tied to proving you live in Spain (which triggers tax residency), but rather that you have maintained the investment over time in Spain.

This nuance is extremely important and goes on to explain why Golden Visas are so special and why they are so sought after by affluent applicants.

As a recap, Golden Visas allow you:

To bypass the 90/180-day rule
Unfettered access to Spain
Do not automatically make you tax resident in Spain (unlike every other visa)

LNA has a 100% track record attaining Spanish residency

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

At Larrain Nesbitt Abogados, we have assisted hundreds of EU and non-EU nationals to successfully attain a Spanish residency permit.

Residency services available from LNA:

Related visa articles

Investor Guide to Spain’s Golden Visa Law – 8th November 2013
Spanish Golden Visa (New York Times – China edition) – 8^th July 2015
Golden Visa Spain – 8th June 2017
Golden Visa Spain – 8/8/18
Golden Visa Spain: 10 frequently asked questions – 8th October 2019
Relocating to Spain? We offer a wide range of Immigration & Residency services – 8th January 2020
Golden Visa for British investors – 21^st January 2021
Spanish Golden Visa for British, it’s retroactive! – 8^th February 2021
EU-family regrouping (Marriage Visa) – 8^th March 2021
Lucrative visa (self-employed) – 8^th April 2021
Non-lucrative visas explained – 8^th May 2021
How to spend over 90 days in Spain – Residency visa overview – 21^st May 2021
I want a Spanish visa, but I don’t want to pay any taxes in Spain – 1st August 2021
Is age a thing on requesting a Spanish residency permit? – 11th November 2021
Spanish residency permits and tax residency – 21^st January 2022

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Malaga voted by expats as the world's second best city to live & work

Raymundo Larraín Nesbitt, January, 8. 2022

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
8^th of January 2022

In a 2021 survey carried out by InterNations, Malaga was voted by 12,000 non-residents, from 174 countries, as the world's second best city overall to live in as a foreign resident. Madrid was ranked number 10, and Barcelona a distant 29.

Malaga has become a very attractive place for foreign residents over the last decade for a number of reasons:

Its high quality of life
Its vast cultural offer (Picasso Museum, Pompidou Museum, Thyssen Museum, Saint Petersburg Russian Museum, etc)
Unmatched leisure & amenities options
Gorgeous weather (averages 330 days of sunshine a year with an average temperature of 17°C)
Great food
Friendly natives
And last but not least, ultra-low taxes. The steep drop in taxes spurred by its regional government (inheritance tax, income tax, property transfer tax, stamp duty, wealth tax, etc) making it de facto an area of ultra-low taxation

Málaga ranks third in the Getting Settled Index and first in the Friends and Socializing Subcategory, with 69 percent of respondents saying they find it easy to make new friends in the city (vs. 48 percent globally), and 78 percent saying they’re happy with their social life (vs. 57 percent globally).

Málaga also came first in the world in the Local Cost of Living Index, with 86 percent of foreign residents rating this positive. Those surveyed described locals, known as malagueños, as friendly (86 percent vs. 69 percent globally) and towards foreign residents in particular (82 percent vs. 67 percent globally).

We had published several articles over the last years reflecting such changes:

Buy your dream home in paradise: Costa del Sol – 21st January 2020

8 reasons to buy property on the Costa del Sol (Andalusia) – 8th April 2021

Andalusia lowers taxes including Property Transfer Tax and Stamp Duty in move that will boost the market – 28^th of April 2021

Malaga, Europe's Southern California – 5^th June 2021

Malaga, passion for life – 16^th September 2024

Malaga, it’s the quality of life.

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

Legal services available from Larraín Nesbitt Abogados

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Merry Christmas!

Raymundo Larraín Nesbitt, December, 22. 2021

From Larraín Nesbitt Abogados, we wish all our clients and friends a Merry Christmas and a Happy New Year!

The law firm will now remain closed for the holiday season and will reopen for business on Monday the 10th of January 2022.

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Desde Larraín Nesbitt Abogados, deseamos a todos nuestros clientes y amigos unas muy Felices Fiestas y un próspero Año Nuevo.

El despacho permanecerá ahora cerrado por vacaciones y nos reincorporaremos el lunes 10 de enero 2022.

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Spain’s new draft law for the Protection and Welfare of Animal Rights

Raymundo Larraín Nesbitt, December, 9. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists has a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Inset photo: Threatened Iberian lynx, only a few hundred remain now.

By Raymundo Larraín Nesbitt
Abogado - Lawyer
11^th of December 2021

Animal rights, always a pet article of mine.

Spain’s social-communist government is in the last legislative stages of approving a new legal framework for the protection and rights of animals. I can only show my personal appreciation and gratitude for at (long) last having such a law enacted and enforced throughout Spain.

The new draft law can be browsed here.

Spain’s historical disposition towards animal’s rights has been somewhat hazy at best; to put it mildly and avoid ruffling feathers. This situation has changed dramatically post-Constitution as new open-minded generations, imbued by democratic ideals, seize power to shape laws in line with the core values that behove a modern society.

There is still much work to be done to lobby and push hard for an agenda that extends jail terms to those few who would abuse domestic or wild animal life. In any case, to my mind, it is a clear victory that animal’s rights in Spain have (finally) become a tenet of our society which will now be upheld legally.

Kudos to our government for making such a great effort to protect our animals and wildlife.

Credit where credit is due.

“The greatness of a nation, and its moral progress, can be judged by the way its animals are treated.” – Gandhi. AKA Mahatma (‘Great Soul’) Gandhi.

Mohandas Karamchand Gandhi (1869 – 1948). From an impoverished and humble social background, he would rise to become the Father of the modern Indian Nation. Trained lawyer, author, journalist, editor, staunch human rights activist and founder of the non-violent movement. He would be wrongfully incarcerated and would suffer unjust persecution throughout most of his adult life. Gandhi's mindset would be for ever changed after reading the book The Kingdom of God is Within You, from the universally acclaimed Russian writer Leo Tolstoy, in which Tolstoy reinterpreted the teachings of our Lord Jesus coalescing his ideas of non-violent resistance. In what can only be described as an extraordinary feat at the time, he single-handedly managed to lead the country to a peaceful independence, on following a nonviolent resistance movement, breaking the heavy chains of oppression from the British Empire; the world’s greatest superpower of the time. He also oversaw the peaceful breakup from the Muslim population, thus avoiding the horrors of a fratricidal civil war, which would go on to form their own country (Pakistan). Through Gandhi's peaceful actions, in both South Africa and India, he would go on to influence civil right movements and freedom activists the world over, including historically relevant figures such as reverend Martin Luther King and Nelson Mandela, both awarded with the Peace Nobel Prize. In a dark century, full of giants and great historical figures, Gandhi towers above them all, a shining beacon of Humanity. He is arguably the greatest historical figure of the 20th century.

In his spare time, he was a career politician; nobody’s perfect.

At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 years’ experience in conveyance & tax. We are also specialized in Immigration & Residency permits.

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

Animal Cruelty and the Law in Spain – 8th January 2016

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Non-Resident Imputed Income Tax end-of-year reminder (NRIIT) 2020

Raymundo Larraín Nesbitt, December, 1. 2021

The clock is ticking. If you are non-resident, and you own property in Spain, this is your last chance to file your Non-Resident Imputed Income Tax for year 2020. Even if you do not rent it out, you need to file this end-of-year tax. We file taxes online all over Spain.

Marbella-based Larrain Nesbitt Abogados has over 18 year’s taxation & conveyancing experience at your service. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
1^st of December 2021

The end of 2021 fast approaches.

One of our last blog posts for this year, is a gentle tax reminder.

All non-residents, who own property in Spain, need to file by the end of this year a tax called Non-Resident Imputed Income Tax (NRIIT, for short), even if you do not rent out your Spanish property. You are taxed on the previous year (2020).

We offer the following taxation service for a flat fee of 100 euros plus VAT/year.

We file your tax online within 24 hours.

Our last day to file this tax in 2021 is Wednesday the 22^nd of December.

We offer the most competitive fees in the market.

Non-Resident Imputed Income Tax (Fiscal Representation Service) €100/year

We are specialized in taxation

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

Larraín Nesbitt Lawyers is a law firm specialized in taxation, conveyance, immigration & residency, 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.

Legal & tax services available from Larraín Nesbitt Abogados (LNA):

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Now is the right time to buy property in Spain

Raymundo Larraín Nesbitt, November, 21. 2021

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Abogado - Lawyer
21^st of November 2021

As we have been pointing out over the last year, a series of factors have built up to create excellent buying opportunities. Real estate experts share a general consensus that now is the right time to buy property in Spain, specifically in Andalusia.

Ultra-low taxation. As we’ve covered in previous articles (Andalusia lowers Property Transfer Tax and Stamp Duty), early on this year Andalusia drastically reduced the taxes on buying property, to the point we have never seen such low taxes in this region. Furthermore, the tax breaks on buying property have now been extended indefinitely, so they are no longer time-gated. The Junta de Andalucia has also approved a batch of measures to also cut down several other taxes (Inheritance Tax, IRPF, Wealth tax etc) turning Andalusia de facto into an ultra-low taxation area, along with Madrid. In plain English, Andalusia and Madrid are now the two areas where you pay fewer taxes in all of Spain. And last I checked, Madrid had no beach, so the choice is easy. To sum up, the continued landmark tax changes implemented by the new regional government since April 2019 (lowering, negating or supressing them) are so eventful they have ushered in a new era of wealth-planning in Andalusia.
Ultra-low interest rates. Interest rates are sitting now at an all-time low, which enables would-be buyers to secure cheap loans (fixed interest is your best bet if the ECB hikes the interest rate in the future to offset a spike in inflation). Bank loans become ‘cheaper’ as inflation rises, as you actually owe less money to your lender (in real terms).
Pandemic & Brexit induced price reductions. The ongoing pandemic and Brexit have forced sellers to reduce their asking price creating once-in-a-lifetime buying opportunities for savvy investors.
Bull market. In Andalusia, we are undergoing since April 2021 a property boom that has prompted a rise in property prices, specifically in coastal areas. Property is appreciating an average of 8% p.a. in coastal resorts and rising YOY. In some exclusive locations, such as Marbella, property prices have risen by over 30% over the last two years.
Spike in inflation. In a financial context of a sharp rise in inflation, having your money stuck in a bank is a losing proposition. In an inflationary environment, money depreciates fast losing its value day-to-day. Finance experts agree that a smart way to hedge your savings against rising inflation is to take on a mortgage loan and invest in real estate to avoid losing purchasing power over the long run as bank deposits devalue over time with high inflation. This was the key strategy that many savvy investors followed in the 70’s, during a time of high inflation, which in hindsight made them very rich.
Buy-to-rent. Annual rental yields are over 5% net. If you also add on top the capital appreciation (point 4 above), you are looking at a safe investment that is netting you over 10% p.a. risk-free. No other safe investment offers you such yields in a context of an underperforming bond market. In addition to this, the Spanish Tax Office offers lenient tax breaks which on average reduce landlord’s tax bills by 70%, or more (if EU-resident). A landlord can offset most, if not all, of their property-related expenses, vastly reducing their income tax on buy-to-lets (i.e. holiday rentals). More on this topic in my articles: Rental prices soar for 5th consecutive year in Spain! and 8 Tips for Buy-To-Let Success in Spain.
Pound rally vs. Euro. Following up on point two above, expectations are high the BoE will raise the interest rate to combat the pernicious effects of inflation. In anticipation of this move, the pound rallied, since April this year, appreciating significantly against the Euro. This translates into UK buyers having greater 'purchasing power' on buying euro-denominated property. In plain English, any property in euros becomes much cheaper for sterling pound purchasers.

In short, it’s never been safer and more profitable to buy property in Andalusia than today. Don’t fight the current and move with the flow; take full advantage of Spain’s real estate property boom.

Are you really going to miss out?

At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 years’ experience in conveyance & tax. We are also specialized in Immigration & Residency permits.

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

Related services:

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