Blog / News

Reminder - Q3 2019 Non-Resident Income Tax filing

Raymundo Larraín Nesbitt, October, 1. 2019

Marbella-based Larraín Nesbitt Lawyers has over 16 years' taxation & conveyancing experience at your service. We offer a wide range of 40 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.

Just a gentle reminder to all non-residents, who own property in Spain and rent it out (whether long or short-term i.e. holiday home); you must file your Q3 2019 quarterly tax return now in October. You are being taxed on your rental income for the previous three months: July, August and September.

For 2019, the non-resident tax calendar is as follows:

Q1 January – March. Filed on the first 15 days of April.
Q2 April – June. Filed on the first 15 days of July.
Q3 July – September. Filed on the first 15 days of October.
Q4 October – December. Filed on the first 15 days of January 2020.

Our cut-off date to accept filing Q3 2019 non-resident tax returns is Tuesday the 15th of October 2019.

Please do not wait until the last moment to submit your quarterly tax return. We file this tax online all over Spain within 24 working hours.

We can offer you this tax service for a very competitive fee: 125 euros plus VAT.

The quoted fee is per property and per tax quarter, it includes up to two joint owners i.e. husband & wife.

Our fees are tax-deductible from the tax to pay.

The main highlight of this tax service is that we reduce your rental income tax by 70%, or more, on applying for landlord tax relief on all your property-related expenses.

Q3 2019 tax submission period

From the 1^st of October to the 20^th of October 2019.

Related tax service

Holiday Rental Accounting Service (HRAS)

Related taxation articles

Holiday Rental Laws in Spain – 8th of March 2015
Non-Resident Taxes in Spain – 8th December 2015
Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
Renting in Spain - Landlord´s Taxation – 8th of January 2017
Holiday Home Taxation in Spain – 8th of July 2017
Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
Non-Resident Income Tax – 8^th December 2017
Holiday Rental Accounting Service (HRAS) – 16^th January 2018
Holiday Rental Taxation in Spain – 8th July 2018
Renting in Spain: are you still overpaying income tax every quarter? – 16^th October 2018
You are taxed at source on renting out in Spain – 30^th November 2018
Did you get an email from AirBnb over your Spanish tax details? – 21st December 2018
Important information from the Spanish Ministry of Finance – 7^th January 2019
Property portals and rental platforms to pass on landlord details to the Spanish Tax Authorities. Are you prepared? - 12th January 2019
Holiday lettings: VAT invoice dissected – 11th February 2019
Requerimiento - Spanish tax agency's summons – 7th March 2019
Save 70% on your landlord tax bill – 8th March 2019

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. VOV.

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Planning AMNESTY in Andalusia

Raymundo Larraín Nesbitt, September, 27. 2019

Marbella-based Larraín Nesbitt Lawyers has over 16 year’s taxation & conveyancing experience, offering you 40 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.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
25^th of September 2019

Yesterday Tuesday the 24^th of September 2019, the Junta de Andalucía passed a new law which effectively paves the way to legalizing over 327,000 illegal properties in the region of Andalusia. EDIT: The new law was published in Andalusia’s Official Law Gazette (BOJA):

Decreto-ley 3/2019, de 24 de septiembre, de medidas urgentes para la adecuación ambiental y territorial de las edificaciones irregulares en la Comunidad Autónoma de Andalucía.

In PDF format: link.

I must point out that the law itself, and the Junta by extension, are very careful to go out of their way to not label it as a ‘planning amnesty’. I stress that (officially) this is NOT an amnesty.

Silly me, being a country boy, I cannot help but think of a popular quote I’ll borrow from James Whitcombe Riley:

“If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.”

So, although this unprecedented law has the impact and the hallmark of a large scale amnesty, please bear with me if I clumsily label it as an ‘amnesty’, because according to all official sources it ‘clearly’ is not, capisce? Semantics.

The former Socialist Government, that was in power in Andalusia for almost 40 years, managed to regularize a whopping 1,500 illegal properties in all this time. This new law slashes the Gordian knot and opens the way for hundreds of thousands of property owners, mostly rural ones, to see their illegal properties regularized once and for all. This will have an incredibly positive impact on the market and it was a much needed measure. Needless to say, it will make the job of selling rural properties a breeze compared to the nightmare thousands of expats having been facing over selling their AFO’s.

The law looks particularly at grouped houses or urbanizaciones. The onus falls on the owner to kickstart the legalization procedure. The great breakthrough this law brings to the table is that, unlike before, these legalizations are not tied to the approval of each municipal Master Urban Plan (Plan General de Ordenación Urbana, popularly dubbed as PGOU). This greatly pushed back the procedure by several years, if at all.

To my mind this is an amnesty in all but name. This is yet another brazen step in the right direction for the Junta de Andalucía. Again, kudos to them for breaking this nightmarish gridlock that has kept thousands of expat families worried sick for countless years. It is very refreshing to see politicians doing their job.

Watch this space for more updates on this.

We offer the most competitive fees in the market.

Conveyancing – Buying fees on application

We are specialized in conveyancing

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

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, inheritance, taxation and litigation. 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.

Blog post originally published in Spanish Property Insight: Planning AMNESTY in Andalusia

Legal services available from Larraín Nesbitt Lawyers

Conveyancing-related articles

Buying distressed property in Spain – 8th August 2011
Buying resale property in Spain – 21st February 2013
Buying off-plan property in Spain – 8th of June 2013
How to buy commercial property in Spain – 4th July 2014
How to buy rural property in Spain – 8th August 2014
How to Buy Property in Spain Safely – 10th October 2014
House Hunting in Spain – Interview with the The New York Times. June 2015
Buying property in Spain from a private seller (Resale Property) – 21st of February 2017
Buying property in Spain from a developer (Off-Plan Property) – 8th March 2017
How to inspect an off-plan property overseas – Q&A with The Sunday Times. July 2017
Buying property in Spain – 10 reasons to hire a lawyer – 8th November 2016
8 Tips on Buying Off-Plan in Spain – 8th June 2018
Tax advantages on becoming resident in Spain – The Address magazine (pages 358 – 373). December 2018
Taxes on buying Spanish property – 8th December 2018
Do’s and don’ts on buying property in Spain – 8th April 2019
8 tips on buying a home in Spain – 8th June 2019
Planning AMNESTY in Andalusia – 25^th September 2019

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The (non) importance of a Spanish Title deed

Raymundo Larraín Nesbitt, September, 21. 2019

You can review here our client’s testimonials.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

This blog post has a follow up here: The (GREAT) importance of the Land Registry in Spain – 1st March 2020

By Raymundo Larraín Nesbitt
Lawyer - Abogado
21^st September 2019

I was talking the other idea with some clients and the conversation left me reeling; it made me realize the importance of a common mistake foreigners make, particularly British. A simple honest mistake that can lead you to lose your house.

It turns out a family member had not paid for several years the Community of Owners nor the local taxes to the town hall (IBI tax) where the property was located. They requested from us a nota simple. The nota simple revealed they had two legal embargoes against the property and that two property proceedings were under way to impound it.

I talked with my clients letting them know it was imperative they cleared up the arrears or else they risked losing the property ownership to their creditors. Their smug reply stunned me. They told me not to worry, as the property transfer was not possible so long as they held the original Title deed stored in a safe in England! I was gobsmacked.

Frankly, I did not even know where to begin to explain how wrong they were. It would seem some friendly agent told them a load of tosh. This poppycock will lead them to lose their house.

This small anecdote paved the way for this short blog post explaining that an original Title deed in Spain is in truth not that important, unlike in other countries in which transfer of ownership is not possible without it.

Personally, I much prefer using original Title deeds in conveyancing because they have all the useful seals and extra information from the tax office and from the Land Registry. However, in Spain if your original property deed gets lost, burnt or vandalized by a toddler it really bears no importance. You can always request a simple copy or else an authorized copy from the Notary before which it was signed. If you do not have the Notary details, or have forgotten them, they are always available in the nota simple, which can easily be requested from us in under 24 hours.

Back to my original story, it goes without saying that a creditor pursuing a loan in Spain against a property can take lawful possession of it through the law courts without having access to the ‘original’ Title deed. Anyone telling you the opposite, doesn't know what they are talking about.

We offer the most competitive fees in the market.

Conveyancing – Buying

We are specialized in conveyancing

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

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, inheritance, taxation and litigation. 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 services Larraín Nesbitt Lawyers can offer you

Related articles

Escritura – Title deeds explained – 8^th April 2013
Nota Simple: What is it and how do you get one? – 8th April 2013
Nota Simple – Land Registry Search (LRS) – 10th November 2017

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IRPH mortgage loan benchmark index in the line of fire

Raymundo Larraín Nesbitt, September, 11. 2019

You can review here our client’s testimonials.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
11^th of September 2019

The ECJ's Attorney General passed yesterday a formal opinion on the latest scandal that engulfs the Spanish banking sector: IRPH index in mortgage-backed loans.

Although his opinion is not binding, the fact is that the ECJ normally follows his legal opinions and acts upon them. The ECJ will rule next January 2020 on this clause which affects over one million mortgage loans in Spain.

His opinion basically was that the elaboration of this index, which dates from 1994, is convoluted and your average layman has no hope in hell in understanding how it is calculated and how it works. Shocking, who would have guessed?

Spanish banks allegedly may exert a ‘certain’ degree of control over the IRPH (which happens to be calculated in Spain), as opposed to the EURIBOR (which is calculated at a supranational level, European-wide). The fact is the IRPH has remained stubbornly higher (significantly so) than the EURIBOR rate by at least 100 basic points, no less. Needless to say, this surprising deviation (given the QE policy of the ECB to flood the money markets with cheap money in an attempt to stave off a severe Great Recession) favours lenders greatly which just may go on to explain why Spanish lenders have proven so very keen over the last decade to push and reference all new mortgage loans to the IRPH index in lieu of the EURIBOR. But that’s just idle speculation on my part, who knows?

As a result of the formal opinion of this ECJ high-ranking lawyer, it is highly likely the ECJ will rule next January against the IRPH, considering it an abusive clause. Needless to say, this will open the floodgates to yet another tidal wave of litigation against the beleaguered Spanish bank sector which already struggles to remain afloat in the wake of hundreds of thousands of lawsuits lost. Experts estimate the compensation due to borrowers starts at 4 billion and may go as high as 44 billion euros, depending on the retroactivity of cases.

Logically, when the news broke out, it triggered a massive stock slide which resulted in the banking sector being mauled.

Fun fact: Spain’s Supreme Court ruled back in 2018 (in favour of banks, surprise!) that the IRPH index was in fact transparent and legal and quashed all consumer cases on grounds of an abusive clause.

It will be most interesting to read next January the ECJ’s ruling on this matter which, in all likelihood, will neatly overrule Spain’s Supreme Court criteria - yet again - in favour of consumers, borrowers and struggling families at large. Ah, déjà vu.

My heart goes out to lenders, bless their warm hearts.

We offer the most competitive fees in the market.

Conveyancing – Buying

We are specialized in conveyancing

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

Legal services Larraín Nesbitt Lawyers can offer you

Mortgage-related articles

Bank Repossessions in Spain – 21st September 2007
Dacion en Pago Procedure – 21st November 2008
Spanish Mortgage Loans: Beware of Abusive Clauses – 4th June 2009
Advice to Struggling Mortgage Borrowers in Spain – 8th March 2011
Spanish Mortgage Loans: An Overview – 21st February 2012
Dación en Pago: Finally, a Borrowers’ Right – 8th March 2012
Mortgage Collar Clauses Revisited (‘Cláusulas Suelo’) – 8th December 2013
Bad Debtor’s List (‘Fichero de Morosos’) – 8th April 2014
Spanish Creditors Pursuing Debts Abroad – 8th May 2014
Dación en Pago Explained or How to Hand Back the Keys – 8th December 2014
European Court of Justice Slams Floor Clauses (‘Cláusulas Suelo’)– 27th December 2016
Recap of Legal Actions in Spain against Banks & Others– 21st March 2017
Mortgages: fixed or variable rate? – 11th June 2018
100% mortgages strike back! – 21st August 2018
Banks to pay Stamp Duty on mortgage loans (again) – 9th November 2018
New Mortgage Law to be passed – 21st November 2018
Spain’s New Mortgage Law – longer bank repossession evictions for struggling borrowers – 11th May 2019
IRPH mortgage loan benchmark index in the line of fire – 11th September 2019

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Spanish Tax Office to fine 5,000 taxpayers over tax form 720

Raymundo Larraín Nesbitt, September, 1. 2019

By Raymundo Larraín Nesbitt
Lawyer - Abogado
1^st of September 2019

Tax form 720. Only this form has been single-handedly responsible for a mass exodus of expatriates, let alone Brexit and the CRS.

The Spanish daily El País reports that over 5,000 taxpayers have been fined as a result of non-compliance with the now infamous tax form 720.

We publish this gentle reminder on who is obliged to submit this tax form. Please note that on submitting it, there is NO tax to pay, it is just for reporting purposes only.

On being tax resident in Spain, you are already taxed on submitting once a year your IRPF (personal income tax) and, if you are affluent, you are also taxed by Patrimonio (Wealth tax) in some regions. In Madrid no one pays for Patrimonio, which goes on to explain the huge concentration of HNWI and UHNWI in the capital. Hopefully, Andalusia will soon follow suit and suppress it as well, becoming Spain’s leading low taxation area.

Who needs to declare?

All Spanish tax residents who own assets overseas over €50,000.

E.g. Mr. and Mrs. Smith live all year round in Mijas Costa, Spain. They own two houses in Berwickshire, England, have open bank accounts in the UK and receive UK-based pensions.

Mr. and Mrs. Smith are in fact tax resident in Spain and they both need to submit tax form 720.

Again, and for the avoidance of doubt, if you are non-resident in Spain you do NOT need to file this tax form; it’s only for residents.

Who is considered tax resident in Spain?

The Spanish Tax Office applies - amongst others - the following broad criteria:

You spend more than 183 days in a calendar year in Spanish territory.
Your centre of financial interests is located in Spain.
Your spouse and/or underage children live in Spain.

Obligation to report?

You must report all assets in a particular category if the value of your total assets in it exceeds €50,000.

Reporting categories

There are three reporting categories: bank accounts, investments and immovable property.

If you have already filed tax form 720 in the past

You only need to file it again if:

The value of an existing asset grew by more than €20,000, or
You sold an asset, or
You obtained a new asset.

Penalties for non-compliance

The disproportionate fines levied are (very) stiff.

Failing to file 720 or filing it incorrectly: €5,000 per infraction.
Minimum fine of €10,000 for each group of assets.
Penalty of 150% on unpaid income tax.

The Common Reporting Standard and you

Please take good note that with the advent of the Common Reporting Standard (CRS), signed by over 100 countries to combat tax evasion, as from the 1^st of January 2018, the Spanish Tax Office is being spoon-fed fiscal information by your home tax office.

For example, both HM Revenue & Customs and Ireland’s Revenue Commissioners are busy supplying the Spanish Tax Office with detailed information (and vice versa) on all your overseas assets and reported income derived abroad as from the 1^st of January 2018.

We strongly advise you to submit tax form 720 if you are resident in Spain to avoid steep penalties.

Larraín Nesbitt Lawyers offers this tax service: Tax form 720

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

Larraín Nesbitt Lawyers is a law firm specialized in taxation, conveyancing, 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) 951 894 675 or by completing our contact form to book an appointment.

Tax services available from Larraín Nesbitt Lawyers

Non-resident taxation-related articles

Spain’s Wealth Tax Reloaded – 8th September 2011
Spanish Wealth Tax (Patrimonio) – 8th November 2011
Fiscal Novelties Affecting Spanish Property Owners – 8th December 2012
Buying and Owning Spanish Property through Companies: Pros and Cons – 7th March 2014
Taxes on Selling Spanish Property – 8th December 2014
Changes to Spain’s Inheritance and Gift Tax Law – 21st February 2015
La Complementaria or ‘Bargain-Hunter Tax’ – 8th May 2015
Taxes on Buying Spanish Property – 8th July 2015
Dispelling Spanish Inheritance Tax Myths – 8th August 2015
Non-Resident Taxes in Spain – 8th December 2015
Spanish Inheritance Tax for Non-residents (Part I) – 8th February 2016
Spanish Inheritance Tax for Non-residents (Part II) – 8th March 2016
Spain’s Non-Dom Tax Scheme – 8th July 2016
Inheritance Tax Novelties in Andalusia. FAQ on IHT – 8th September 2016
Renting in Spain - Landlord´s Taxation – 8th of January 2017
Renting in Spain: Non-Resident Landlord's Rental Tax Relief – 14th of January 2017
Which beneficiaries are hit worst by Spanish Inheritance Tax (IHT)? – 2nd June 2017
Holiday Home Taxation in Spain – 8th of July 2017
Andalusia to slash Inheritance tax for inheritances under 1 million euros – 21st September 2017
Spanish Inheritance Tax Assessment Report (SITAR) – 8th of October 2017
Non-Resident Income Tax – 1st December 2017
Non-Resident Income Tax – 8^th December 2017
Tax advantages on becoming resident in Spain. – 8^th March 2018
Holiday Rental Taxation in Spain – 8th July 2018
Renting in Spain: are you still overpaying income tax every quarter? – 16^th October 2018
You are taxed at source on renting out in Spain – 30^th November 2018
Taxes on Buying Spanish Property – 8th December 2018
Property portals and rental platforms to pass on landlord details to the Spanish tax Authorities. Are you prepared? - 12th January 2019
Holiday lettings: VAT invoice dissected – 11th February 2019
Save 70% on your landlord tax bill – 8th March 2019
Spanish Tax Office to fine over 5,000 taxpayers on tax form 720 – 1^st September 2019

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5 reasons to invest in real estate in Spain

Raymundo Larraín Nesbitt, August, 21. 2019

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
21^st of August 2019

Store of value. In times of political instability, which lead to stock markets in upheaval, gold and real estate have traditionally been a safe haven where affluent ploughed their money capping off the storm.
Security. Real estate is a tangible asset which you can touch and see, unlike cryptocurrencies and other intangible assets where thefts are rife.
Capital appreciation. Real estate increased by one digit over the last four years in Spain, in some areas even by two digits. Some experts even talk of a new property boom underway. On the long run real estate always trumps any other asset class, including stocks.
Soaring rental yields. Rental yields in Spain have soared by two digits over the span of three years. Spain is the world’s second tourist destination creating a huge demand for holiday accommodation.
New laws passed in Andalusia allow ultra-low inheritance and gift tax. April 2019 saw the approval of a new spate of laws in the region of Andalusia which, for the first time in 40 years, allow owners to pass on their properties to their beneficiaries without having to pay hardly any tax, or no tax at all in most cases. More on these new laws explained here.

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Oops! Accidentally revoking your Spanish will …

Raymundo Larraín Nesbitt, August, 1. 2019

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
1^st of August 2019

It is customary that when a solicitor drafts a will in the United Kingdom they add in a provision along the lines of “this new will revokes any other prior wills.”

This little line automatically revokes any prior Spanish will making it null and void. The legal implication of this is that to distribute the Spanish estate, as there is no longer a valid Spanish will, the family is now stupidly forced to go through a Grant of Probate in the UK; which normally exceeds one year, attracting in its wake penalties and delay interests from the tax office in Spain. All of which could have been easily avoided…

So, when you happen to make a new will in your home country, or elsewhere, please ensure your solicitor or lawyer adds in a provision safeguarding the validity of any previous existing wills made in Spain.

This little word of advice will save your family at a time of bereavement considerable aggravation, stress, money, hassle, extra fees and disbursements, tax penalties on submitting taxes late, delay interests, sworn translations, additional non-required Apostille seals etc

We all have our 'blond' moments, from time to time; just try and avoid this 'oops'.

You are welcome.

“I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. I watched C-beams glitter in the dark near the Tannhäuser Gate. All those moments will be lost in time, like tears in rain. Time to die.” – Rutger Hauer (as Roy Batty in Blade Runner)

Rutger Oelsen Hauer (1944 - 2019). Ducth actor, writer and environmentalist. Likely the best Dutch actor ever, he was certainly one of the top in the world. With such 80's classics under his belt as Blade Runner and Ladyhawke, he earned his place. He sadly past away on the 19th July 2019 in Netherlands.

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

Larraín Nesbitt Lawyers is a law firm specialized in inheritance, conveyancing, taxation 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 services available from Larraín Nesbitt Lawyers

Inheritance-related articles

Non-Residents: Six Advantages of Making a Will in Spain – 8th August 2012
Spanish Wills and Probate Law in Light of European Regulation 650/2012 – 8th January 2015
Changes to Spain’s Inheritance and Gift Tax Law – 21st February 2015
Dispelling Spanish Inheritance Tax Myths – 8th August 2015
Spanish Inheritance Tax for Non-Residents (Part I) – 21st February 2016
Spanish Inheritance Tax for Non-Residents (Part II) – 8th March 2016
Non-Resident: Why you need to make a Spanish will – 24th June 2017
Andalusia to slash Inheritance tax for inheritances under 1 million euros – 21st September 2017
Spanish Inheritance Tax Assessment Report (SITAR) – 8th October 2017
7 Advantages of Making a Spanish will – 3^rd January 2018
Seven Advantages of making a Spanish will – 8^th May 2018
Old Spanish wills made by (resident) British nationals are being declared void – 8^th May 2018
Andalusia to abolish inheritance tax in 2019 – 29^th January 2019
Andalusia, now a tier 1 region for low taxation – 3rd July 2019
How to mitigate your inheritance tax bill in Spain – 8th July 2019
Oops! Accidentally revoking your Spanish will – 1^st August 2019
Brexit and Inheritance & Gift tax in Andalusia – 8th August 2019
Inheritance tax in Spain: regional tax reliefs to benefit ALL non-residents in the future (even outwith EU/EEA) – 29^th July 2019

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Reminder - Q2 2019 Non-Resident income tax filing

Raymundo Larraín Nesbitt, July, 1. 2019

Just a gentle reminder that all non-residents, who own property in Spain and rent it out (whether long or short-term i.e. holiday home), must file their Q2 2019 quarterly tax return in July. You are now being taxed on your rental income for the previous three months: April, May and June.

For 2019, the non-resident tax calendar is as follows:

Q1 January – March. Filed on the first 15 days of April.
Q2 April – June. Filed on the first 15 days of July.
Q3 July – September. Filed on the first 15 days of October.
Q4 October – December. Filed on the first 15 days of January 2020.

Our cut-off date to accept filing Q2 2019 non-resident tax returns is Friday the 12th of July 2019. Please do not wait until the last moment to submit your quarterly tax return. We file this tax online all over Spain within 24 working hours.

We can offer you this tax service for a very competitive fee: 100 euros plus VAT.

The quoted fee is per property and per tax quarter, it includes up to two joint owners i.e. husband & wife.

Our fees are tax-deductible from the tax to pay.

The highlight of this tax service is that we reduce your rental income tax by 70%, or more, on applying for landlord tax relief on all your property-related expenses.

Q2 2019 tax submission period

From the 1^st of July until the 20^th of July 2019.

Related tax service

Holiday Rental Accounting Service (HRAS)

Related taxation articles

Holiday Rental Laws in Spain – 8th of March 2015
Non-Resident Taxes in Spain – 8th December 2015
Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
Renting in Spain - Landlord´s Taxation – 8th of January 2017
Holiday Home Taxation in Spain – 8th of July 2017
Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
Non-Resident Income Tax – 8^th December 2017
Holiday Rental Taxation in Spain – 8th July 2018
Renting in Spain: are you still overpaying income tax every quarter? – 16^th October 2018
You are taxed at source on renting out in Spain – 30^th November 2018
Did you get an email from AirBnb over your Spanish tax details? – 21st December 2018
Important information from the Spanish Ministry of Finance – 7^th January 2019
Property portals and rental platforms to pass on landlord details to the Spanish Tax Authorities. Are you prepared? - 12th January 2019
Holiday lettings: VAT invoice dissected – 11th February 2019
Requerimiento - Spanish tax agency's summons – 7th March 2019
Save 70% on your landlord tax bill – 8th March 2019

... Read more

Spain’s New Mortgage Act

Raymundo Larraín Nesbitt, June, 21. 2019

Lawyer Raymundo Larraín briefly reviews Spain’s new Mortgage Act which came into force on the 16^th of June 2019.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
21^st of June 2019

So, you fancy buying a property in Spain with your partner and take out a loan? Well, you should read this post first.

The last time I wrote on this subject was last November, New Mortgage Law to be passed, and then again in May this year, Spain’s New Mortgage Law spells longer bank repossession evictions for struggling borrowers.

Spain’s new Mortgage Act brings a slew of changes that effectively change the game as we know it – moving the goal posts. For once, I am glad to report that the goal posts are actually being moved (for the most part) in benefit of consumers/borrowers, to the detriment of lenders.

The positive raft of changes comes about instigated by EU Authorities, as Spain is effectively transposing a EU Directive from 2014, which seems to have taken for ever BTW.

Whilst all the below-listed changes may sound great on paper, in practice the well-meaning intentions of EU lawmakers may create serious issues to the point of jeopardizing some property deals. The over-protective nature of some of the new requirements will likely translate into some buyers getting cold feet and pulling out, as waiting times and entry barriers have been effectively erected on lending.

As this is just a blog post, I am not going to go into detail on the new changes. I will simply collate the most important ones in bullet points for ease of comprehension.

All changes effective as from 17^th June 2019.

Floor clauses (collar clauses) will be completely removed in all mortgage loans. For more reference: European Court of Justice Slams Floor Clauses (‘Cláusulas Suelo’). Floor clauses (cláusulas suelo, in Spanish) was one of the abusive mortgage loan clauses I denounced back in 2009 in my article (point one): 10 Common Abusive Clauses in Spanish Mortgage Loans.
Repossession procedures will now only take place when a borrower falls in arrears 12 quotas or 3% of the capital for the first half of the loan. However, if the default occurs on the second half of the loan, a lender may not start a repossession before 15 quotas are unpaid (approximately 15 months) or else 7%. In other words, as these quotas are normally repaid on a monthly basis, lenders will now have to wait at least a full year before they are able to instigate a repossession procedure against a borrower. Up until recently lenders had to wait 3 months before they could repossess. Moreover, this 3-month rule was a recent change in itself, as lenders post-crash could execute a repossession with only one quota in arrears, which was simply bonkers. I denounced this abusive mortgage clause back in 2009 in my article (point nine): 10 Common Abusive Clauses in Spanish Mortgage Loans.
A borrower must now visit a notary twice. Yes, you read right. The first time without a lender where the borrower will be given the opportunity to ask the Notary anything on their particular mortgage loan terms (all you ever wanted to ask on mortgage loans but were afraid to ask). The second visit will be with the lender to sign the Mortgage deed. Notaries will be ‘forced’ to pass a test to borrowers to see if they have fully comprehended the clauses of their own loan contracts (sic)!
The borrower will be handed over a copy of the mortgage contract at least 10 days ahead of signing at a Notary the Mortgage deed.
Changes to who pays for what on taking on a mortgage loan:

Borrower pays for:

Properties’ appraisal, tasación in Spanish (on average between 400 to 700 euros). Borrower is free to choose the valuer.

Lender pays for:

Stamp Duty (AJD) on the full mortgage loan amount.
Gestoría fees.
Notary fees.
Land Registry fees.

Lenders to pay now for Stamp Duty on the mortgage loan (as we’d reported previously). Only this change all unto itself translates into borrowers saving thousands of euros with this new law. Will lenders slyly pass on the increased costs to borrowers with more draconian mortgage terms? Likely. We shall have to wait and see.

Lenders may no longer tack on a mortgage loan ancillary non-requested linked financial services and products i.e. home insurance, life covers, pension plans, credit cards etc. This was one of the abusive mortgage clauses I denounced in my 2009 article (point 6): 10 Common Abusive Clauses in Spanish Mortgage Loans.
Early mortgage redemption penalties are now capped, being significantly reduced. In plain English, you can now repay your loan ahead of time without your bank imposing a huge penalty on you. Remember that lenders’ core business is to lend money and charge interests on it; if you repay a loan much sooner than agreed, your lender loses a lot of money over time. Which is why they impose these early redemption penalties, which are now capped.

Conclusion

The plethora of novelties are mostly positive for borrowers, bolstering their consumer rights.

However, while I’m always up for empowering consumer (borrowers’) rights, excessive over protectionism may create serious practical issues. If anything, Authorities should make it easier for potential buyers, not introduce uncalled for obstacles and additional red tape. Buyers already have to jump through enough hoops as it is.

For example, forcing borrowers to pass a test on their own mortgage clauses (!) is simply a bridge too far (read daft). It may be fine for chums like Juan Lopez, who is Spanish resident, and has no qualms in popping over to his Notary twice. But what about non-residents like Mrs Édith Piaf, who is a busy French career woman? How do I explain to my Paris-based client that she needs to book flights to Spain to visit a Notary twice? Does this seasoned professional really need to pass a test to gauge her contractual comprehension skills? I mean, really? Does this happen in any other country in the world? Talk about Spain being different.

What about the lost in translation shenanigans? Spanish notaries seldom speak any other language other than Spanish. Is he going to test her in French if her command of Spanish is non-existent? Will a translator be needed to step in to bridge the gap? Will her lawyer need to polish up on his language skills? What about other challenging languages? Is this an extra to pay now? Is a translator seriously expected to comprehend complex legal and financial mortgage loan clauses worded in archaic technical jargon and translate it seamlessly into Russian, Finnish, Dutch etc? Mortgage deeds in Spain are on average a 70-page plus document abounding in nuances, technicalities and mathematical formulas. That’s a whole lot to understand, translate and convey in one session. Who is going to pay for all this extra time and effort?

Sometimes excessive hand holding backfires leading to absurd new problems. Hopefully common sense will prevail.

We seem to have gone from one extreme to the other; from just “sign on the dotted line,” to testing borrowers on their mortgage knowledge. Striking the right balance is always a challenge.

“Virtue is the happy medium between two extremes.” – Aristotle

Spain’s new mortgage law came into force on 16^th of June 2019. It will greatly alleviate struggling family’s finances greatly bolstering consumer & lender rights.

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Mortgage-related articles

Bank Repossessions in Spain – 21st September 2007
Dacion en Pago Procedure – 21st November 2008
Spanish Mortgage Loans: Beware of Abusive Clauses – 4th June 2009
Advice to Struggling Mortgage Borrowers in Spain – 8th March 2011
Spanish Mortgage Loans: An Overview – 21st February 2012
Dación en Pago: Finally, a Borrowers’ Right – 8th March 2012
Mortgage Collar Clauses Revisited (‘Cláusulas Suelo’) – 8th December 2013
Bad Debtor’s List (‘Fichero de Morosos’) – 8th April 2014
Spanish Creditors Pursuing Debts Abroad – 8th May 2014
Dación en Pago Explained or How to Hand Back the Keys – 8th December 2014
European Court of Justice Slams Floor Clauses (‘Cláusulas Suelo’)– 27th December 2016
Recap of Legal Actions in Spain against Banks & Others– 21st March 2017
Mortgages: fixed or variable rate? – 11th June 2018
100% mortgages strike back! – 21st August 2018
Banks to pay Stamp Duty on mortgage loans (again) – 9th November 2018
New Mortgage Law to be passed – 21st November 2018
Spain’s New Mortgage Law – longer bank repossession evictions for struggling borrowers – 11th May 2019
Spain’s New Mortgage Act – 21st June 2019

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Spanish Income Tax (IRPF) - 2019

Raymundo Larraín Nesbitt, June, 10. 2019

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By Raymundo Larraín Nesbitt
Lawyer - Abogado
10^th of June 2019

Spanish tax residents need to file once a year IRPF tax (Income tax). Spanish residents pay tax in Spain on their worlwide income and assets. For 2019, our cut-off date to accept filing IRPF tax returns is Friday the 21st of June 2019. Please do not wait until the last moment to submit your tax return. We file this tax online all over Spain within 24 working hours.

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You are Spanish tax resident if:

You spend more than 183 days in a calendar year in Spanish territory.
Your centre of financial interests is located in Spain.
Your spouse and/or underage children live in Spain.

2019 tax submission period

From the 1^st of April until the 28^th of June 2019.

Related tax service

Spanish Resident Income Tax (IRPF)

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Tax advantages on becoming resident in Spain – 8th March 2018

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