Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

1. 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.
2. Security. Real estate is a tangible asset which you can touch and see, unlike cryptocurrencies and other intangible assets where thefts are rife.
3. 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.
4. 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.
5. 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.

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.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

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

• Wealth Planning
• Making a Spanish will
• Spanish Inheritance Tax Assessment Report (SITAR)
• Spanish Inheritance Tax
• Legal Property Report (LPR)
• Death Certificate
• Land Registry Search (Nota Simple)

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

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 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.

Copyrighted © 2019. Plagiarism will be criminally prosecuted.

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.

Contact us and pay less taxes in Spain. If you overpay taxes it is only because you want to.

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

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

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

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.

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

• 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
• 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

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 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.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

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.

We can offer you this tax service starting at a very competitive fee. Contact us for a quote (couples have a discount).

We can submit your tax form starting from early April through to the end of June. We strongly advice you to file your tax return as soon as possible and not to wait until the last week of June. If you are leasing properties in Spain (short or long-term), we can reduce your rental income tax by 70%, or more.

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)

Related article

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

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.