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.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

Normally I’d grow irritated on catching a plagio.

But this weeks’, erm let us politely call it ‘loosely inspired’ text, managed to pull off a smile from me when I saw who it was: the Spanish Tax Office!

I must admit I feel flattered.

With well over 270 tax & legal articles published since 2004 in several hundred websites, magazines and newspapers, we’ve caught over 1,300 individuals and companies plagiarizing us over the years. Every week we catch an average of two. Every article and blog post we write is painstakingly registered for copyright before it’s published (such as this one); any discussion over authorship rights ends before it even begins.

Spot the differences

Our tax blog published originally on the 21^st June 2018: Holiday lettings: with or without VAT?

“However, if you offer any of the following services listed below, your rental may be regarded by the Spanish Tax Office as assimilated to offering hotel accommodation:

• Concierge service.
• Daily changing of bed linen.
• Daily changing of bath towels.
• Daily cleaning of property/room.
• Room service (food and beverage), catering.
• Bed & Breakfast.
• Other ancillary hotel services such as: daily press, laundry cleaning, luggage storage service, accommodation booking (holiday reservation).
• Other.”

Spanish Tax Office’s website: PRIVATE HOLIDAY HOME RENTALS

https://www.agenciatributaria.es/AEAT.internet/en_gb/Inicio/_componentes_/_Le_interesa_conocer/Historico/La_tributacion_de_los_alquileres_turisticos.shtml

“In other words, accommodation services, in contrast to property rental, normally include the rendering of services such as concierge and permanent and continuous customer service in a space allocated for this purpose, daily cleaning of property/room and accommodation, daily changing of bed linen and bath towels as well as other services (laundry, luggage storage service, daily press, accommodation booking (holiday reservation), etc.) …”

“In particular, as well as the aforementioned ancillary services in the hotel industry, services such as daily cleaning of the property/room and the daily changing of bed linen and bath towels in the property are also included.”

Related articles

Plagiarism: Flattery or Just Plain Stealing? – 7th May 2010

Plagiarism: Flattery or Just Plain Theft? – 8th October 2016

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.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

                                                                                                                                                             Photo: Cala Gat at Rajada, Mallorca

Despite the misleading heading, this is actually good news for us all.

Up until now, only Spanish-resident landlords could benefit from a 60% reduction on gross income earnings derived from long-term lets (does not apply to short-term lets or holiday homes). This allowance is only applied to landlords which are (tax) resident in Spain and the property must be the permanent abode of the tenant. Currently, the Spanish Tax Office bars tax advisors from applying this tax break to fellow EU nationals.

However, this is currently being challenged at Brussels on grounds of discriminating fellow EU member state nationals as it infringes one of the main covenants of the founding Treaty of Rome from 1957, freedom of movement, which happens to be at the very core of the fabric on what constitutes the Union.

It is simply amazing how almost 15 years on I am still writing tax articles on grounds of fiscal discrimination towards fellow EU member nationals. Here’s one from June 2005, published in Essential Magazine Marbella, where I am discussing yet another similar fiscal discrimination challenged in Brussels which Spain also lost at the time.

In all likelihood (and in my personal opinion only, so take it with a pinch of salt), in compliance with the ECJ’s landmark ruling from 3^rd September 2014, the Kingdom of Spain is bound to lose this court case - and rightfully so!

All this is good and well, but how does it affect me, my pocket?

It means that when Spain foreseeably loses this court case, as is widely expected, and in coherence with previous ECJ rulings, all EU non-resident landlords (albeit resident in the Union i.e. the United Kingdom) will be able to take advantage from this ‘new’ tax allowance for the first time ever. Meaning landlords, whether resident in Spain or in the rest of the EU, will now be in equal footing, benefitting from the same 60% tax break Spanish landlords have already been enjoying for years.

In plain English, after Spain loses at Brussels, all EU landlords on long-term lets will stand to pay significantly less taxes on the rental income they derive from renting out immovable property located in Spain. Providing your tax advisor does actually claim this tax relief, granted. It will not be applied automatically on your tax return…

This new tax change will translate into all EU-based landlords to benefit from a huge discount on their long-term rental income tax bill. Once more, kudos to our Brussels overlords.

Short-term EU-based landlords (read holiday homes) had already been benefitting over the last 4 years from reduced taxation on being allowed to greatly mitigate their tax bills on renting out. On average, our law firm reduces our client’s tax bills by 70%, or more. More on this, in our taxation article: Save 70% on your landlord tax bill – 8th March 2019.

Bottom line, both long and short-term EU landlords alike can both expect a great mitigation on their Spanish tax bills in the near future.

Lower taxation is always good and necessary for the economy. It incentivizes and fosters foreign investments in Spain, chiefly on property purchases with a view to buy-to-let. Which in turn leads to job creation, greater disposable household income, increased wealth and political stability. And our spendthrift politicians get to spend more of our hard-earned taxpayer's money in whatever it is they spend it on.

Blog post dedicated to M. Jo Declercq.

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

Larraín Nesbitt Lawyers is a law firm specialized in taxation, inheritance, conveyancing, 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 952 19 22 88 or by completing our contact form to book an appointment.

Legal services Larraín Nesbitt Lawyers can offer you

• Rentals (contract drafting)
• Rentals (advising on pre-existing lease agreements)
• Registration of Holiday Homes (Andalusia)
• Holiday Rental Accounting Service (HRAS)

Rental-related articles

• Renting in Spain: Top Ten Mistakes – 8th of June 2011
• Let-to-Buy in Spain: The Smart Choice – 8th of April 2012
• Letting in Spain: The Safe Way – 10th of October 2012
• New Measures to Bolster Spain’s Ailing Rental Market – 8th of July 2013
• Tenant Eviction in Spain – 8th of June 2014
• Holiday Rental Laws in Spain – 8th of March 2015
• Urban Rental Law in Spain – Spain’s Tenancy Act – 8th May 2016
• Renting in Spain – Landlord’s Taxation – 8th of January 2017
• Holiday Home Taxation in Spain – 8th of July 2017
• Seasonal lets: an alternative to holiday home rentals – 8th of October 2017
• 7 illegal clauses in Spanish rental contracts – 8th January 2018
• Distinction between long-term and seasonal contracts – 21st February 2018
• Changes to Spanish Rental Laws – 8th January 2019
• Save 70% on your landlord tax bill – 8^th March 2019
• Spain's new rental laws in 2019 – 8^th March 2019
• Termination of long-term lease agreements and ‘silent renewal’ – 21^st April 2019
• Resident landlords can benefit from a 60% tax discount on long-term tenants - Challenged in Brussels – 21^st May 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.

2.019 © Raymundo Larraín Nesbitt. All rights reserved.

Marbella-based Larrain Nesbitt Lawyers has over 16 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.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

The last time I wrote on this subject was last November, New Mortgage Law to be passed, in which I wrote Congress was on the verge of approving the long-awaited EU Directive on Mortgage Law. Spain has had to wait for over 3 years to transpose this EU Regulation and only under threats of steep fines has it finally been approved.

As I mentioned back then, the most significant impact it will have is to push back the timeframe of bank-led repossession periods, from the current 3 months to 12 months, or more.

Back in 2009, when I wrote my article on Spanish Mortgage Loans: Beware of Abusive Clauses, I included as point nine the abusive and one-sided power lenders had to foreclose on a mortgage loan on defaulting only ONE instalment (that is, one month in arrears). I will self-restrain myself to avoid using harsh language, but it was totally bonkers. As I wrote at the time, there were a myriad legitimate reasons on why a borrower could miss out on repaying only one mortgage instalment.

After the property bubble imploded in 2008, and hundreds of thousands of bank repossessions were executed in Spain leaving bereft hundreds of thousands of young families,  the goal posts were mercifully moved to a 3-month repossession waiting time. Any lender would now need to wait 3 months of unpaid arrears before they were allowed to call in a bank loan.

Fast-forward to the 21^st of February 2019, when Spain’s Congress finally approved the new EU Directive which forces lenders, amongst many other changes, to wait for 12 months before being allowed to instigate a full-blown repossession procedure on an unserviced mortgage loan.

It is most disappointing – once again – that the European Union has had to step in decisively to look after Spanish consumers and borrowers and quash abuses from our unbridled financial sector (which we bailed out during the last bank meltdown, btw). If only some of our political class had backbone, this intervention would be unrequired.

On a completely unrelated note, I guess those multi-million pound loans from the banking sector to ALL Spanish political parties (which are never repaid and are always condoned) must have some sort of consideration in exchange.

Gosh, I wish I could just walk into a bank any morning and ask for a 60 million euro loan (offering no collateral) and then have my lender kindly condoning me the debt after a couple of years for no apparent reason, bless their warm hearts. But I guess you’d need to stoop down and become a career politician for that to work out. Too high a price, I guess.

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

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 available from Larraín Nesbitt Lawyers

• Conveyancing – Buying
• Conveyancing – Selling
• Non-Resident Income Tax (Fiscal Representation) from €90/year
• Holiday Rentals Accounting Service (HRAS) from €100

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
• 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

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. No lap dog politician, or banker, was harmed on writing this article. VOV.

2.019 © Raymundo Larraín Nesbitt. All rights reserved.

Credit photo: WWII poster, UK Gov.

Unless you have been living under a rock over the last 3 years, you will know the UK has voted to leave the Union in what is popularly dubbed as 'Brexit.'

Regardless on which side of the fence you are on, leaver or remainer, the fact is that Brexit will have a serious impact in our life’s. Specifically, on all those fellow expatriates who have taken Spain as their home and live here all year round.

It is specifically the expat community based in Spain who should pay close attention to all the changes that are continuously being negotiated that impact our life’s: healthcare, pensions, taxation, migration, passports, pets etc.

If you live in Spain all year round, we strongly advise you apply for Spanish residency. If you do not register yourself as a member of the Union before the UK breaks away, you will be stripped off a series of rights and entitlements to which you would otherwise have been entitled. You may also be regarded as an illegal alien in EU territory by the Authorities, which may even lead to your deportation to your country of origin.

For this reason, our law firm encourages all expats to keep tabs on the following webpage, run by the UK government, which is updated regularly on all Brexit changes:

• Living in Spain – UK Government

Brexit-related articles

• Spain: register your residency – UK Government
• Living in Spain – 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

Landlord, are you leasing long term in Spain? Read this unless you fancy locking yourself into a 8 or 10-year contract.

Marbella-based Larrain Nesbitt Lawyers has over 16 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.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

Spain has recently amended its rental laws in March 2019, in most cases to the detriment of landlords, creating serious legal obligations landlords should be acutely aware of. One of the issues that is important to understand is what happens to a long-term lease when it is over.

Most landlords wrongly assume that when the mandatory five years are up (or seven, for legal persons) the lease agreement is automatically terminated - crass mistake. If nothing is done, an automatic extension to long-term leases operates by law (known as ‘silent renewal’ in English legal jargon or prórroga tácita, in Spanish). The idea behind it is to protect and bolster furthermore tenant rights.

Silent renewal periods

For all long-term rental contracts signed on or after the 6^th of March 2019:

• Physical landlords: adds an extra 3 years to the lease. Making a long-term tenancy’s total duration 8 years.
• Legal landlords (i.e. companies): adds an extra 3 years to the lease. Making a long-term tenancy’s total duration 10 years.

Example: a contract signed on the 9^th of March 2019 by a private landlord. If by 2024 the landlord takes no action, the contract will be automatically extended for a further 3 years until the 8^th of March 2027.

Long term tenancies (contract duration, in years)

I'll throw in a little chart to make everyone's life easier (please excuse my appalling chart abilities).

How do you avoid this legal extension?

A lawyer needs to draft a formal notice of termination and serve it to your tenant by recorded delivery within a specified time limit. This must be done giving a 2-month notice if a landlord is a physical person and with a 4-month notice if the landlord is a legal person (i.e. a company). Emails, text messages, WhatsApp, etc are not legally admissible for this purpose.

I’m trying to sell on the property, how would this affect me?

It affects you. Under the new changes to our rental laws, any buyer acquiring a property needs to respect the whole duration of a pre-existing lease agreement until it ends. This means a buyer may have to wait several years before he is able to attain vacant possession. Needless to say, most buyers do not have the patience to put up with this, putting a damper on any house deal.

For this reason alone, it is strongly advised landlords take legal counsel before signing any lease agreement in Spain. There are many different types of rental agreements, and some will lock you into an 8 or 10-year contract if you are not mindful.

That said, there are always legal ways to circumvent such pesky matters. Talk to a lawyer, we can pre-empt such matters, so they do not jeopardize your house sale.

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

Larraín Nesbitt Lawyers is a law firm specialized in taxation, inheritance, conveyancing, 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 952 19 22 88 or by completing our contact form to book an appointment.

Article originally published at Idealista: Termination of long-term lease agreements and ‘silent renewal’

Legal services Larraín Nesbitt Lawyers can offer you

• Rentals (contract drafting)
• Rentals (advising on pre-existing lease agreements)
• Registration of Holiday Homes (Andalusia)
• Holiday Rental Accounting Service (HRAS)
• Recorded delivery service

Rental-related articles

• Renting in Spain: Top Ten Mistakes – 8th of June 2011
• Let-to-Buy in Spain: The Smart Choice – 8th of April 2012
• Letting in Spain: The Safe Way – 10th of October 2012
• New Measures to Bolster Spain’s Ailing Rental Market – 8th of July 2013
• Tenant Eviction in Spain – 8th of June 2014
• Holiday Rental Laws in Spain – 8th of March 2015
• Urban Rental Law in Spain – Spain’s Tenancy Act – 8th May 2016
• Renting in Spain – Landlord’s Taxation – 8th of January 2017
• Holiday Home Taxation in Spain – 8th of July 2017
• Seasonal lets: an alternative to holiday home rentals – 8th of October 2017
• 7 illegal clauses in Spanish rental contracts – 8th January 2018
• Distinction between long-term and seasonal contracts – 21st February 2018
• Changes to Spanish Rental Laws – 8th January 2019
• Save 70% on your landlord tax bill – 8^th March 2019
• Spain's new rental laws in 2019 – 8^th March 2019
• Termination of long-term lease agreements and ‘silent renewal’ – 10^th April 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.

2.019 © Raymundo Larraín Nesbitt. All rights reserved.

Buy to let in Spain? This blog post sheds some light on the new changes brought to holiday lettings in 2019.

Marbella-based Larrain Nesbitt Lawyers has over 16 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.

Photo credit: Photobucket, Judge Judy.

Blog post copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

As we reported back in March (Spain's new rental laws in 2019), a new law was approved which brought a raft of changes. In today’s blog post I will focus on the two changes which affect holiday lettings. Community of Owners have been greatly empowered to rule on them going forward. All changes effective as from 6^th of March 2019.

1. Community of owners may now ban holiday lettings outright

Spain’s Horizontal Act has now been amended allowing Community of Owners to vote by a simple majority of 3/5 (or 60%) to ban outright holiday rentals within a community.

I had already pointed out in a blog post in 2017 that this step was necessary, as the Horizontal Property Act at the time required unanimity to ban them, which logically was never going to happen because landlords would vote against it because of their vested interest.

This change has no retroactive effects.

2. Community of owners may now increase the community fees of all those owners who market their properties as holiday lets through holiday platforms

Spain’s Horizontal Act has been amended allowing Community of Owners to increase the communal quota assigned to a landlord of the overall community budget.

In plain English, communities of owners may now vote to increase the community quota of a property owner who uses his property/ies as holiday lettings. They can vote to increase it by as much as 20%.

This change has no retroactive effects.

• Conveyancing – Buying fees on application

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

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

Legal services Larraín Nesbitt Lawyers can offer you

• Conveyancing – Buying
• Conveyancing – Selling

Holiday lettings-related articles

• The Comunidad de Propietarios (Ley de Propiedad Horizontal/ Commonhold Law) – 8th July 2012
• Community of Owners in Spain: Challenging Assembly Resolutions – 10th October 2011
• Community of Owners Insurance Policies – 8th August 2013
• How to Cancel your Home Insurance Policy in Spain– 8th January 2013
• Renting in Spain: Top Ten Mistakes – 8th of June 2011
• Let-to-Buy in Spain: The Smart Choice – 8th of April 2012
• Letting in Spain: The Safe Way – 10th of October 2012
• New Measures to Bolster Spain’s Ailing Rental Market – 8th of July 2013
• Tenant Eviction in Spain – 8th of June 2014
• Holiday Rental Laws in Spain – 8th of March 2015
• Urban Rental Law in Spain – Spain’s Tenancy Act – 8th May 2016
• Renting in Spain – Landlord’s Taxation – 8th of January 2017
• Holiday Home Taxation in Spain – 8th of July 2017
• Seasonal lets: an alternative to holiday home rentals – 8th of October 2017
• 7 illegal clauses in Spanish rental contracts – 8th January 2018
• Distinction between long-term and seasonal contracts – 21st February 2018
• Changes to Spanish Rental Laws – 8th January 2019
• Save 70% on your landlord tax bill – 8^th March 2019
• Spain's new rental laws in 2019 – 8^th March 2019
• Community of owners may now ban holiday lettings – 11^th April 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.

2.019 © Raymundo Larraín Nesbitt. All rights reserved.

Buying in Spain? This blog post sheds some light on the differences between ground floors and penthouses.

Marbella-based Larrain Nesbitt Lawyers has over 16 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.

Blog post copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

Today, April’s fool, I decided to write a short blog post on the differences between buying a ground floor and a penthouse in Spain.

One of the first things that struck me when I moved to the United Kingdom to work for a British multinational, was the difference in concept between the UK and Spain regarding ground floors and penthouses.

In the UK, ground floors are considered the superior choice, the more expensive and prestigious option. Normally these properties are more accessible, as top floors in older buildings lack lifts (think of tenements); something which in Spain is almost taken for granted. You will be reminded of this each time you need to drag the groceries two flights of stairs in the UK. Besides this, ground floors have access to small, enclosed private gardens which are highly appreciated, especially in large cities. These, and several other reasons, translate into significant differences in property price. Hands down ground floors are the best option in the UK, even to rent out.

But how does this hold up in Spain?

Truth is not very well. In Spain, amusingly, this relation is in fact the opposite. Ground floors have traditionally been seen as ‘inferior’ properties and their price reflects this. Penthouses are in fact the coveted asset, specially in large cities where they are regarded as prime property and are a very sought-after commodity by those affluent enough to afford them.

What explains this difference in perception? Is it a reflection of differing cultural values, a whim? Personally, I think it has to do more with adaptation. There are objective justified reasons on why penthouses are – by far – the superior option in Spain; it is not something you can merely write off as a ‘cultural’ difference.

Penthouses have the following advantages over ground floors in Spain:

• Security. Ground floor properties are easier to break in. Penthouses on the other hand tend to be more secure, safeguarded. Additionally, a little known fact is that Spain’s Criminal Code severely punishes thieves when they climb to steal. Thieves know our Criminal laws even better than most lawyers do and for them the ratio of efficiency is more proficient on stealing from ground floors rather than penthouses – if caught. For exactly the same theft, lower floors are left off the hook on paying a small fine whereas stealing from a penthouse may lead to jail terms (if climbing is required). You will find that ground floors in Spain have been broken into several times, in some instances, several times within the same year. Those iron railings you see in the windows of ground floors are there for good reason, it is not just decoration.
• Noise. In a penthouse you don’t hear your upstairs neighbour walking all day long, let alone if they wear high heels. This is a major problem in older properties, especially with wooden floorings. The acoustic contamination of lower floors is significantly more acute than if you live in a quieter penthouse where you remain largely oblivious to street noises. Let us not talk about lifts. A ground floor will be permanently hearing the lift being taken all day long, whereas a penthouse won’t; because it is only used by the penthouse owner.
• Accessibility. Because almost every building in Spain has lifts, this issue that applies to UK properties would not apply in Spain. Moreover, in modern buildings, penthouse owners normally have a key lift which gives them exclusive access to the upper floor.
• Privacy. Whereas in the UK, ground floors tend to have their own private gardens of exclusive use sealed off with hedges, this does not apply in Spain. Anyone can have easy access to your garden, encroaching on you. Moreover, in some gated communities, your green garden is in fact legally labelled as a communal area; meaning other neighbours even have the right to come in! This means you cannot erect wooden fences or seal off your garden, because it is not really yours, and it is not really private, it belongs to the community of owners. Even on selling on the property, these metres squared will not be tallied in your title deed because it is a communal area in most cases. Penthouse owners on the other hand grow some very nice exclusive gardens to the point of creating their own mini jungles in large cities.
• Sunshine & brightness. Ground floors normally have little to no sunshine exposure, being normally dark. Penthouses bask in sunlight almost all day long.
• Cold. Ground floors in gated communities tend to be dank, as the water from top floor balconies trickles down on them, creating nasty humidity patches and mould growths which require continuous repainting of walls. Penthouses on the other hand, tend to be warmer as heat rises naturally and they are always blessed with more sunlight hours, especially if south-orientated. This in turn impacts your electricity and heating bills, as ground floors will need to spend more money to stave off the cold, unlike penthouses, which have a natural proclivity to store warmth.
• Views. Last but not least, is the obvious fact that penthouses tend to have a commanding view of its surroundings, whereas ground floors are entrenched, dark and normally lack any views.

For all the above reasons, buying a penthouse is the superior option; at least in Spain.

• Conveyancing – Buying Fees on application

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

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

Legal services Larraín Nesbitt Lawyers can offer you

• Conveyancing – Buying
• Conveyancing – Selling

Conveyancing-related articles

• 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
• Selling Property in Spain – 10 Reasons to Hire a Lawyer – 8th December 2016
• 7 reasons on why you need legal representation on selling in Spain – 7th March 2018
• Home Seller's Checklist – 11th September 2018
• Save taxes on selling your Spanish home!– 1st 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.

2.019 © Raymundo Larraín Nesbitt. All rights reserved.

Lawyer Raymond Nesbitt gives all Spanish tax residents a gentle reminder to submit tax form 720 over the next weeks. Last day to submit it is the 1^st of April 2019.

The following blog post has been summarised to avoid unnecessary tax technicalities. The quoted tax rates are subject to change from one year to the next. Seek professional legal advice on your matter – see disclaimer below. Image courtesy of Blog Self Bank.

Photo credit: AEAT logo

Blog post copyrighted © 2018, 2019. Plagiarism will be criminally prosecuted.

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

This tax form is for reporting purposes only, you do NOT pay any tax on submitting it.

I have structured this blog post as a FAQ for ease of comprehension.

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.

2019 submission period

From the 1^st of January until the 1^st of April 2019.

Can I file it after the submission period?

Yes, but penalties apply. Ask us.

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.

"¿Qué es poesía?, dices, mientras clavas
en mi pupila tu pupila azul,
¡Qué es poesía! ¿Y tú me lo preguntas?
Poesía... eres tú."

– Gustavo Adolfo Bécquer

Gustavo Adolfo Claudio Domínguez Bastida (1836 - 1870). Was a brilliant young Spanish poet belonging to the Romanticist bewegung. He was also a playwright, literary columnist and talented writer. Clearly, he had a penchant for blue-eyed girls. Posthumously he would be acknowledged as one of the most notorious and gifted figures in Spanish literature, displaying a truly rare artistic sensibility. He would die young aged only 34 from tuberculosis, known as the "the romantic illness," as befits any true romantic poet. His crowning achievement would become his Rimas y Leyendas (Rhymes and Legends), an assorted collection of bewitching tales and poems that draws from popular Spanish folklore.

Tax services available from Larraín Nesbitt Lawyers

• Tax form 720
• Non-Resident Income Tax (Fiscal Representation Service)
• IRPF (Spanish Resident Income Tax)
• Holiday Rentals Accounting Service (HRAS)
• Spanish Inheritance Tax (IHT)
• Spanish Inheritance Tax Assessment Report (SITAR)
• Wealth Tax
• Non-Domiciled Tax Scheme

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

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.

2.018 and 2019 © Raymundo Larraín Nesbitt. All rights reserved.

Have you received in 2019 a 'requerimiento' letter (tax summons) from the Spanish Tax Office/Agencia Tributaria/Hacienda/AEAT? Don’t panic, contact us ASAP to settle your unpaid non-resident taxes. We will sort out your taxes for a very competitive fee. Remember, you only have 10 days to regularize your tax situation once you receive this letter without attracting supplementary penalties. Contact us!

Blog post and inset photo copyrighted © 2019. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
8^th of March 2019

Come March, the Spanish Tax Office's central non-resident HQ in Madrid, has been busy sending out massively to non-resident property owners tax summons, or ‘requerimientos’ in Spanish legal jargon, similar to this one.

This is a legal notification made by recorded delivery whereby the tax office formally notifies you that you are not up to date with your non-resident tax obligations. In this case they are requesting to be supplied with copies of all non-resident taxes submitted from the year 2014 onwards. The tax office only gives you 10 days to regularize your tax situation in Spain (see inset photo). So, if you submit your backdated taxes as from 2014 onwards, within the 10 days, you will receive no penalty.

Failure to comply will result in them opening a tax inspection against you which may result in very steep fines (50 to 150% of all undeclared amounts) and, depending on the non-declared amount, may even derive in instigating legal proceedings against you.

Non-compliance with the Spanish Tax Authorities will result eventually in them placing a charge against your Spanish property for all the unpaid tax (plus penalties, plus delay interests, plus proceeding's expenses) and they may even seize your Spanish accounts ‘freezing’ them to secure the accrued debt.

Should you receive a similar letter from the tax office, as the one featured in this tax blog, don’t panic. Record the date on which you - or someone else - signed for it and get in touch with our law firm Larraín Nesbitt Lawyers immediately. Time is of the essence to avoid being landed with hefty penalties.

We will calculate and submit on your behalf, in a timely manner, your Non-Resident Imputed Income Tax (NRIIT) and also your Non-Resident Income Tax (NRIT) if you have been renting out your property since 2014 onwards (but not declaring any income in Spain).

As we care to point out in all our tax articles and tax blogs, you are taxed at source on renting out in Spain. So, if you have been declaring and paying income tax derived in Spain only in your home country (i.e. in the UK) you are at fault and must also pay tax in Spain on your Spanish income (e.g. on your rental income). It does not suffice that you only paid income tax in your home country on any income made in Spain. HM Revenue & Customs will give you tax breaks on any tax you have already paid in Spain, following the Double Taxation Treaty signed between the Kingdom of Spain and the United Kingdom.

The reason on why thousands of non-resident expats are now being mailed these tax summons in 2019, to bring their tax situation to date in Spain, is because of the advent of the Common Reporting Standard which we had been warning about over the last two years. More and more, the net closes in on all those expats who are not declaring & paying taxes in Spain.

It should be noted how the tax office is 'positively discriminating' non-resident property owners - they are being treated exquisitely. The fact they are giving you a slap on the wrist and allowing you 10 days to 'sort out' your tax situation - without any penalty - is beyond unusual. Any Spanish tax resident would not be treated with such leniency, and would have received, along with this tax summons, a steep fine to pay. 

One of the many advantages of appointing us as your tax representatives in Spain, is that we will receive all tax-related correspondence generated throughout a fiscal year by the tax office. This is ideal for all those non-resident taxpayers who have limited access to their Spanish mail box. We offer this service at no extra charge with our Fiscal Representation Service.

We lower by 70% our client’s tax bills, on average, on renting out. What are you waiting for? Call or email us. We make life simple.

We offer the most competitive fees in the market.

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

Holiday Rental Accounting Service (HRAS) €125/tax quarter/property

We are specialized in taxation

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) 952 19 22 88 or by completing our contact form to book an appointment.

Legal & tax services available from Larraín Nesbitt Lawyers:

• Non-Resident Income Tax (Fiscal Representation) from €90
• Holiday Rental Accounting Service (HRAS) from €100
• Registration of Holiday Homes (Andalusia)

Holiday lettings-related 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: “Con factura, por favor.” – 21st January 2019
• Holiday lettings: VAT invoice dissected – 11th February 2019
• Save 70% on your landlord tax bill – 8th March 2019
• Requerimiento - Spanish tax agency's summons – 7th 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.

2.019 © Raymundo Larraín Nesbitt. All rights reserved.

Selling in Spain? This blog explains how to greatly reduce your tax bill saving you thousands of euros in taxes.

Blog post copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

Congratulations, you have found a buyer for your Spanish property!

Your first port of call should be to hire a conveyancing law firm, such as Larraín Nesbitt Lawyers, with over 16 years’ conveyancing experience, assisting expats all over Spain.

It is a little-known fact amongst home sellers that you can greatly reduce your tax bill on selling in Spain. This is part of our job as conveyancers. More details in our article: 7 reasons on why you need legal representation on selling in Spain – 7th March 2018.

Tax-deductible VAT invoices

You may legally deduct all purchase and refurbishment expenses:

• Lawyer’s fees (on buying and selling the property).
• Notary fees (on buying the property).
• Land Registry fees (on buying the property).
• Taxes (on buying the property).
• All property-improvements i.e. glass curtains, refitted kitchen, roof retiling, wood flooring, A/C etc.

Our law firm can assist you greatly reducing the taxation on your sales proceeds. Why pay more taxes?

Larraín Nesbitt Lawyers can represent you on selling your property in Spain for a very competitive fee. Hiring a lawyer on selling adds security and helps you pay less taxes.

• Conveyancing – Selling 

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

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

Legal services Larraín Nesbitt Lawyers can offer you

• Conveyancing in Spain – Selling
• Conveyancing in Spain – Buying

Conveyancing-related articles

• 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
• Selling Property in Spain – 10 Reasons to Hire a Lawyer – 8th December 2016
• Rogue Estate Agent's Commission – 18th November 2016
• 7 reasons on why you need legal representation on selling in Spain – 7th March 2018
• Home Seller's Checklist – 11th September 2018
• Save taxes on selling your Spanish home! – 1st 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.

2.019 © Raymundo Larraín Nesbitt. All rights reserved.