Blog / News

Buying off-plan in Spain? You need a Building Licence

Raymundo Larraín Nesbitt, March, 20. 2018

This blog post explains the key importance a Building Licence has for a buyer.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
20^th of March 2018

Today marks the start of springtime. This traditionally kickstarts the real estate season to buy property in Spain. Scores of Nordic, Swiss and German buyers will begin to assail estate agencies all over Spain in search of the perfect property.

A popular choice of late is buying offplan. Over the last year, dozens of new-builds have sprouted, particularly in the Estepona area. Whilst buying a new property has its advantages, it also has some major legal risks would-be buyers ought to be aware of.

In today’s post, I will comment on the recent change in 2015 to the bank guarantees law and how that can lead a buyer to lose all his money on buying offplan property.

Bank guarantees are a legal tool which act as a safety net on the deposits paid by a buyer should the developer file for bankruptcy or should the development not be completed.

The change in the law is that bank guarantees are only valid as from the time a developer attains a Building Licence from the town hall. Only as from this moment onwards are bank guarantees valid.

Many developers try to allay investor fears claiming they have an application for a Building Licence; well, that doesn’t suffice. Unless a developer has attained a Building Licence, all the money you have paid towards your new property is unsecured.

Should the developer go bankrupt or the development become stalled (for whatever reason) you will lose ALL your money. Even if you have been issued with bank guarantees rubber stamped by a bank, they are totally useless unless a Building Licence has been issued. More on this matter in our article: Law 20/2015: Important new bank-guarantee legislation explained for off-plan buyers.

This is one of many potential pitfalls offplan buyers can be faced with. Our law firm has over 15 years’ experience dealing in conveyance matters. Don’t risk your hard-earned money, speak to independent lawyers.

Conveyancing – Buying from €995.

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.

Legal services Larraín Nesbitt Lawyers can offer you

Conveyancing – Buying from €995
Conveyancing – Selling from €795

Conveyancing related articles

Bank Guarantees in Spain – 8th April 2013
Licence of First Occupation Explained – 8th April 2013
Buying Off-Plan Property in Spain – 8th of June 2013
Law 20/2015: Important new bank-guarantee legislation explained for off-plan buyers – 21st September 2015
Buying Property in Spain – 10 Reasons to Hire a Lawyer – 8th November 2016
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

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

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7 reasons on why you need legal representation on selling in Spain

Raymundo Larraín Nesbitt, March, 7. 2018

Selling in Spain? This blog post explains why you need to appoint legal representation.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
7^th of March 2018

Whilst some property owners may find it unnecessary, or even pointless, to hire a lawyer on selling, it is strongly recommended to avoid problems.

Avoid payment scams. A seller that does not hire a lawyer is vulnerable and may fall prey to payment scams. Please read our article Selling Property in Spain – 10 Reasons to Hire a Lawyer which explains the kind of scams a seller may be faced with without appointing legal representation.
Avoid abusive sales commissions. A seller that has no legal representation can be the subject of commission abuses by unscrupulous agents. An example of this here: commission abuses.
Lawyer's fees are 100% tax-deductible! The fees you pay us to sell your property are fully deductible from the sales tax (CGT), meaning you pay less tax on hiring us.
Tax mitigation. We will mitigate your capital gains tax liability on selling. We can offset both the associated purchase costs as well as the refurbishment expenses on your property to reduce your tax burden as much as is legally admissible (contingent on the vendor supplying us with original VAT invoices). More information in our tax blog: Save taxes on selling your Spanish home! – 1st March 2019
Refund of 3% of the sales price. Non-residents, on selling in Spain, are withheld 3% of the sales proceeds by the buyer's lawyer. This money is paid into the Spanish Tax Office. We can apply for a refund on your behalf (if applicable).
Cancelling pre-existing mortgages. If there is an existing mortgage/charge against the seller's property this needs to be formally cancelled by a lawyer prior to selling on signing a deed witnessed by a Notary public. No buyer will acquire a property with an existing charge against it.
Are you selling at a loss? We can apply for a tax rebate on your ‘plusvalia’ tax. More details in our article: Have you sold property at a loss in Spain? You can now apply for a tax refund.

Most of the points above can only be done on retaining a qualified lawyer. Hiring a lawyer on selling adds security and helps you pay less taxes.

Do you still think you do not need a lawyer on selling in Spain? We offer the most competitive fees in the market.

Conveyancing – Selling

We are specialized in conveyancing.

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

Legal services Larraín Nesbitt Lawyers can offer you

Conveyancing – Selling from €795
Conveyancing – Buying from €995

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

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Spain’s Supreme Court quashes borrower’s hopes on refunds for mortgage set up costs

Raymundo Larraín Nesbitt, March, 1. 2018

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
1^st of March 2018

Spain’s Supreme Court ruled yesterday 28^th of February that Spanish lenders would not have to refund borrower’s Stamp Duty Tax on their Spanish mortgage. This new ruling allows Spanish lenders to dodge a multi-billion euro bullet. This now leaves the door ajar to be appealed before the European Court of Justice.

In a blog post we published well over a year ago (Lender’s to pay for mortgage setup costs – 27th of January 2017) we severely criticized this opportunistic litigation approach as the risks it entailed, in our humble opinion, were perilously close to indulging into reckless litigation that could leave borrowers seriously out-of-pocket on losing their court cases.

We warned yet again in our blog post of 16^th March 2017 (Recap of Legal Actions in Spain against Banks & Others) that we personally found “bleak” the success odds of litigating against lenders for the purpose of recovering the set-up mortgage costs (point three). In line with this, our law firm tried to talk clients out of pursuing this litigation course because we did not see the likelihood of this turning out positive.

Fast-forward a year later, and the Supreme Court ruled yesterday against borrowers being refunded Stamp Duty for exactly the same legal reasons we pointed out in our January 2017 blog post.

Notwithstanding the above, borrowers litigated en masse to recoup Notary fees, Land Registry fees and the Stamp Duty tax. Law courts have been awarding the Notary and Land Registry fees with a mixed bag of results (some rule that 100% should be awarded whereas other regional ones are of the opinion that only 50% should be awarded). This disparity in rulings prompted the Supreme Court to clarify the situation with yesterday’s ruling to settle the matter once and for all and unify Doctrine.

However, the lion’s share of the set-up costs was always the Stamp Duty which accounts for well over 90% of the set-up costs. It was this contentious point that made or break the case.

The Stamp Duty Act, a decades-old law, always made it clear that the taxpayer was the borrower, not the lender, so there was little to no room to manoeuvre. So, for this reason we labelled these legal actions with a “bleak” success outcome as opposed to other litigation options which have proven most successful.

It will be interesting to see what happens with the thousands of cases that were instigated on a no win no fee basis. I suspect that in many cases plaintiffs were not warned by their litigation lawyers that if they lost their case they would likely have to pay for the defendant’s set of legal costs; that is the bank’s lawyer’s fees, court runner's fees besides other lender's costs. More on this: No win no fee: not always a good idea.

Only the ECJ can now turn the tide of events in favour of borrowers…

You can find a press release from the Supreme Court here.

“Lawyers exist to protect us from other lawyers.”

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 Larraín Nesbitt Lawyers can offer you

Litigation
Conveyancing – Buying from €995
Conveyancing – Selling from €795

Litigation related articles

Is Litigation Against Spanish Developers Worthwhile? – 23^rd May 2008
10 Reasons why your Case against a Developer may be thrown out of Court in Spain – 8^th September 2012
Supreme Court Rulings on Bank Guarantees – 8th April 2015
Off-Plan Bank Guarantees and Supreme Court Rulings – Payback Time – 8^th June 2016
Lender’s to pay for mortgage setup costs – 27th of January 2017
Spain’s Constitutional Court rules ‘Plusvalia’ tax is illegal if property is sold at a loss – 3rd March 2017
Recap of Legal Actions in Spain against Banks & Others – 21st March 2017
Selling property at a loss in Spain: ‘Plusvalía’ tax no longer payable – 18th May 2017
Have you sold property at a loss in Spain? You can now apply for a tax refund – 8th November 2017
Spain’s Supreme Court quashes borrower’s hopes on refunds for mortgage set up costs – 1st March 2018

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Brexit and You

Raymundo Larraín Nesbitt, February, 19. 2018

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
21^st of February 2018

We have all listened to the embellished speeches, to the staunch defence of lofty ideals and as a result witnessed a splintered society consequence of the dissension sowed by irresponsible self-serving career politicians always eager to advance their own power even it is at the expense of a nation’s future. We are all too familiar with the political spiel, but how does Brexit really affect you, how does it affect your pocket? Image credit: Theophilos Papadopoulos

This is something seldom spoken about. I will try to briefly summarise in this blog post the (short-term) impact of this landmark political decision from the Spanish perspective of non-resident British wishing to find a bolthole under the sun.

Income tax: Increased from 19% to 24% (that's a hike of 26% in tax rate post-Brexit).
Inheritance tax: Lenient regional tax allowances will no longer be available; only national ones which are negligible. This translates into a change going from expats having to pay no inheritance tax, or very little, to a punitive inheritance bill.
Inheritance tax: Local tax allowances will no longer be available.
Rentals: British residents will no longer qualify to benefit from generous landlord tax relief which reduce, on average, a rental income tax bill by 70%. This means that expat landlords will now face a huge spike in their quarterly tax returns on renting out.
Capital gains tax: No rollover relief (under 65-year-olds) on reinvesting the sales proceeds in a new main home located in the United Kingdom. Which means cgt must now be paid on selling.

Brexit has quantifiable adverse monetary effects for hundreds of thousands of expats.

It is my personal opinion that Brexit is an ill-conceived idea fruit of the unbridled arrogance of a single politician that took a gamble with all our children's future and lost miserably. Besides polarizing society and fracturing our unity as a nation, it will greatly weaken the United Kingdom for generations to come and plays right into the hands of our nation's enemies that work tirelessly to weaken our resolve and undermine our institutions that secure peace and prosperity for us all. It should give us pause to see them openly advocating and supporting Brexit.

With all its flaws, the European Union has brought peace and prosperity to Europe for three quarters of a century (backed unwaveringly by our US cousins). A Europe which historically is prone to be ravished by petty wars. Turning our back on this political feat leaves the door ajar to political instability, to in-bred nationalisms, which power-hungry men to the East will be only too eager to exploit. For the sake of our children's future, we should avoid this historic error.

“Those who cannot remember the past are condemned to repeat it.” – George Santayana.

What the future holds

Leaving my crystal ball aside, as a Member State, the United Kingdom is compelled to negotiate in block with the European Union’s appointed chief Negotiator, Mr Michel Barnier. I’m sure general de Gaulle would feel somewhat vindicated by the poetic justice of a Frenchman in the role of having to slap a ‘non’ to the UK – repeatedly –. There is no hiding this fiasco will be the most expensive divorce settlement in recorded history, some 60 billion euros. Which goes on to explain why the pound is sitting at an all-time low.

That said, once it is a fait accompli next 29^th of March 2019 at midnight, and the dust settles, the United Kingdom will be unshackled to once more strike individual deals with Member States. Amongst them, Spain.

It is undeniable the sway British hold over the Spanish economy. British are, by a long shot, the number one nation exporting tourists to Spain with over 18 million pa (and growing). The Tourism industry, set up slily by general Franco in the sixties, is Spain’s number one contributing GDP industry with over 16% (in fact, Spain became in 2017 the world’s second tourist destination overtaking the US). Not to mention that British unwaveringly spearhead the real estate market in Spain by number of non-domestic sales year-on-year. Likewise, the construction business in Spain accounts for a significant GDP contribution, with almost 6%. So, given the British clout over Spain's economy, like it or not with cherries on top, if the United Kingdom sneezes, we catch a cold in Spain.

British nationals, with the intent of acquiring property or who plan to become resident in Spain (i.e. retire), should be treated über generously from a taxation point of view to foster investments in Spain. Additionally, healthcare plays a major role for senior citizens, so this matter should also be agreed upon allowing them full rights. Spain must compete (aggressively) with our neighbours Portugal and France to attract British investments. The hawk-eyed politicians of these two countries, especially the former, have been all-too busy over the last two years approving fiscal and legal measures to entice British investments that put to shame what short-sighted Spanish politicians have been doing (nada) with their attention all-consumed by domestic matters.

Bottom line, for the sake of us all, the Spanish government should bend over backwards to reach an attractive proposition post-Brexit casting aside any inbred prejudices. This would allay investor fears and money would once more pour into the Spanish coffers in droves. Unashamedly borrowing a slogan from Bill Clinton's campaign, "It's the taxation, stupid."

One can only hope Madrid gets a grip and realizes what is at stake here for the national economy. It is in the best interests of both nations that we seek a consensuated solution that works for us all in a brave new world.

“Politics: the art of creating new problems where none existed.”

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

Legal services Larraín Nesbitt Lawyers can offer you

Conveyancing-related articles

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How (not) to bypass regional Holiday Home Laws in Spain

Raymundo Larraín Nesbitt, February, 9. 2018

Photo: Nah ah! Judge Judy with her hallmark “no wagging finger”

Photo credit: Photobucket, Judge Judy.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
9^th of February 2018

Almost every region in Spain has regulated holiday homes over the last five years. These regional regulations define what is understood by ‘holiday home’. Boringly, almost every region has made a carbon copy excluding long-term rentals. So effectively, if your rent out your property long-term you do not have to comply with pesky holiday rental laws.

Now this is where it gets interesting. In the Balearics Islands long-term rentals are understood as those where a property is rented out to the same individual for more than a month. In Andalusia, a long-term rental is understood as leasing a property to the same individual for over 2 months.

Some would-be landlords, that lack the legal requirements to offer their plush properties as holiday homes (i.e. have NOT attained what is known as a Licence of First Occupation) or quite simply because they can’t be bothered to comply with the raft of new rental laws, are resorting to a devious mechanism to circumvent existing holiday home regulations. They are renting their properties out as fake ‘long term’ to intermediary companies, for say 8 months, and these in turn are busily subletting their properties short-term as holiday homes through property portals.

Landlords are all too aware their property is being sublet, as they purposely ‘forget’ to add the typical clause forbidding sublets which any lawyer worth his salt would advise. More on this in my blog post: Let-to-buy contracts: do not forget to add a clause forbidding sublets!.

These people think they are being smart flaunting existing regional holiday rental regulations. The fact is that regional inspectors will trawl internet ads on any portal (even if located and marketed outside Spain) and if the (Spanish) properties being offered as short-term accommodation lack the mandatory alphanumeric code or tourist licence registration number it will raise a red flag. Inspectors are not going to complicate themselves and will simply fine the registered Spanish property owner/s. Ignorance of law does not exempt from its fulfilment (article 6.1 of the Spanish Civil Code).

What this means in laymen’s terms is that all those property owners who mistakenly believe they have outsmarted regional laws on renting out their lush villas purportedly as long-term lease agreements, when in reality they are being offered by intermediaries as short-term accommodations in exchange of thousands of euros a week, are going to be landed in the future with humongous fines, plus penalties, plus interests on top. They are simply deluding themselves. More on landlord fines: Andalusia starts fining holiday home landlords.

The only legal way to circumvent holiday home regulations is signing a seasonal contract as explained in detail in my article: Seasonal lets: an alternative to holiday home rentals – 8^th of October 2017. Taking alternative ‘options’ is simply chancing it. Failure to pay fines (and associated penalties) will result in a charge being placed against your property which may even lead you to lose it.

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. Please contact us for a free initial consultation. 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

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
Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
Decree 20/2002: Andalusia’s Holiday Rural Rental Decree – 8th of April 2016
Urban Rental Law in Spain – Spain's Tenancy Act – 8th May 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
Community of Owners in Madrid to bar Holiday Rentals – 29th June 2017
10 Questions you Should Ask your Agent on Leasing Office Space in Spain – 24th May 2017
Holiday Rental Home Taxation in Spain – 8th July 2017
Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
How to inspect an off-plan property overseas – Q&A with The Sunday Times. July 2017
Holiday-home lettings: Do NOT register with Andalusia's Tourism Registry unless you are fully compliant – 21^st of July 2017
New Balearics Holiday Rental Law – 8^th of September 2017
Seasonal lets: an alternative to holiday home rentals – 8^th of October 2017
Let-to-buy contracts: do not forget to add a clause forbidding sublets! – 20^th October 2017
The magic of lettings in Spain – 21^st November 2017
7 illegal clauses in Spanish rental contracts – 8^th January 2018
Holiday Rentals Accounting Service (HRAS) – 16^th January 2018
How (not) to bypass regional Holiday Home Laws in Spain – 9^th February 2018

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Has your Spanish bank notified you they are going to disclose information about you to the Spanish Tax Office?

Raymundo Larraín Nesbitt, January, 30. 2018

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
30^th of January 2018

In my article from last December 2017, Non-Resident Income Tax, I wrote on the consequences for non-residents on what is known as the Common Reporting Standard or CRS, for short.

Spain signed in 2014 a treaty, along with over 100 other countries, for cross-border tax co-operation to combat tax evasion. As from 2018, the Spanish Tax Authority (AEAT) will automatically receive a great deal of fiscal information from non-resident owners, including UK and Irish nationals. And by the same token, the Spanish Tax Office will be collating a great deal of fiscal information on you from Spanish banks, and other sources, and sending it back to all those countries that signed the CRS treaty.

One of the (most visible) results of this budding cooperation between tax offices is the letter or e-mail you will have received in January 2018 from your Spanish bank/s informing you they are going to pass along a great deal of fiscal information on you to the Spanish Tax Office, which in turn will relay it over to your home country’s tax office. Sample email from Spanish bank requesting tax information.

Both countries, going forward, will now be busy cross-checking your fiscal declarations and tax residency to catch you out in case you have not been declaring and paying your taxes in your country of tax residence as well as in Spain.

If you are tax resident in Spain, even unbeknownst to yourself, and you have failed to declare your income you may be facing fines for tax model 720 follow a sliding scale. Any ‘incongruity’ is fined starting at €10,000 and any data ‘omitted’ is fined starting at €5,000. Fines can lead up to a staggering 120% of the undeclared amounts you hold abroad on being resident in Spain. The afore does not preclude the fines for Income Tax which additionally can be up to 150%.

Bottom line, for your own sake, if you own assets or derive any income in Spain, get your taxes sorted out pronto because it is a ticking time bomb and time is running against you. Speak to us to sort out your tax matters and become fully tax compliant. We can help you sort out your tax affairs regularising them for a nominal fee for your peace of mind. We only charge for our legal services; a pain-free stomach is gratis.

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. Please contact us for a free initial consultation. 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

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
Has your Spanish bank notified you they are going to disclose information about you to the Spanish Tax Office? – 30^thJanuary 2018

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Holiday Rental Accounting Service (HRAS)

Raymundo Larraín Nesbitt, January, 15. 2018

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
16^th of January 2018

The explosive two-digit year-on-year growth on rental income we have witnessed over the last years in Spain has brought a huge demand for professional holiday-home rental accounting services.

Larraín Nesbitt Lawyers is a Spanish law firm that offers a bespoke rental income accounting service for both legal and physical non-resident landlords. We file taxes all over Spain.

Our team of dedicated lawyers and economists will file and lodge your quarterly tax forms for a very competitive fee. Because of how admin intensive this procedure is, and the need for specialized tax software, landlords should not realistically hope to complete it on their own without attracting fines & penalties.

The most interesting part of our accounting service is that we reduce taxpayer's bills by 70%, or more, on average.

Following a new ruling from the European Court of Justice, we can now offer non-resident landlords generous tax relief. We can deduct all or part of your property-related VAT invoices. For a full list of tax-deductible items you can read our tax article: Holiday lettings: “Con factura, por favor.”

Property owners who rent properties out in Spain (whether long or short-term) and hire us, save quite a bunch in taxes. Real client examples of quaterly tax savings: Renting in Spain: are you still overpaying income tax every quarter?

"We will save you more money on taxes than what you spend on hiring us."

We take the stress off your taxation freeing you up, so you can relax and spend more time enjoying what you value most in life.

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

Q1 2019 January – March. Filed on the first 15 days of April.
Q2 2019 April – June. Filed on the first 15 days of July.
Q3 2019 July – September. Filed on the first 15 days of October.
Q4 2019 October – December. Filed on the first 15 days of January 2020.

Our Holiday Rentals Accounting Service (HRAS) offers all the following advantages:

We reduce landlord’s tax bills by 70%, or more, on average through tax relief.
Money-back guarantee. We will reduce your tax by a minimum of 40%, or your money back, no questions asked. All EEA/EU non-residents can benefit from this, including UK-residents (luxury rentals are excluded from this offer).
Deal only with native English-speaking lawyers and economists. No more ‘lost in translation’ shenanigans.
Registered professionals at the Spanish Law Society and Economist's Society.
We are members of the British Chamber of Commerce, Spain.
Very competitive fees.
Fast, responsive, easy-to-understand tax service.
We will let you know exactly (in %) how much tax we have saved you through our tax service.
Complete the quarterly tax forms in Spanish. We will email you a copy once filed for your records and for your peace of mind.
Submit the tax returns before the tax office in a timely manner (thus avoiding attracting penalties and surcharges on late payment).
Setting a fiscal representative’s address to deal with all tax-related correspondence generated throughout a fiscal year.
Reply to any tax notifications within the deadline ensuring tax compliance.
Appeal misunderstandings or material errors (additional fees may apply).
Mandatory Professional Indemnity Insurance which you can claim from in case of negligence or malpractice. Currently this cover stands at €1,000,000 with Larraín Nesbitt Lawyers.
Up-to-date knowledge on fast-paced fiscal changes.

Legal fees: €125/tax quarter/per property

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 (+34) 952 19 22 88 or by completing our contact form.

Tax & legal services Larraín Nesbitt Lawyers can offer you

Holiday-home letting 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
House Hunting in Spain – Interview with The New York Times. June 2015
Taxes on Buying Spanish Property – 8th July 2015
Non-Resident Taxes in Spain – 8th December 2015
Resurgent Spain: Málaga Sees Strong Sales – Interview with Mansion Global (The Wall Street Journal). December 2015
Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
Decree 20/2002: Andalusia’s Holiday Rural Rental Decree – 8th of April 2016
Urban Rental Law in Spain – Spain's Tenancy Act – 8th May 2016
Buying Property in Spain – 10 Reasons to Hire a Lawyer – 8th November 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
Buying Property in Spain from a Private Seller (Resale Property) – 21st of February 2017
Buying Property in Spain from a Developer (Off-Plan Property) – 8^th March 2017
NIE Number Explained – 8th May 2017
Community of Owners in Madrid to bar Holiday Rentals – 29th June 2017
Holiday Rental Home Taxation in Spain – 8th July 2017
Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
How to inspect an off-plan property overseas – Q&A with The Sunday Times. July 2017
Holiday-home lettings: Do NOT register with Andalusia's Tourism Registry unless you are fully compliant – 21^st of July 2017
New Balearics Holiday Rental Law – 8^th of September 2017
Seasonal lets: an alternative to holiday home rentals – 8^th of October 2017
Let-to-buy contracts: do not forget to add a clause forbidding sublets! – 20^th October 2017
The magic of lettings in Spain – 21^st November 2017
Non-Resident Income Tax – 8^th December 2017
7 illegal clauses in Spanish rental contracts – 8^th January 2018
Holiday Rental Accounting Service (HRAS) – 16^th January 2018
Holiday Rental Taxation in Spain – 8th July 2018
Renting in Spain: are you still overpaying income tax every quarter? – 16^th October 2018
You are taxed at source on renting out in Spain – 30^th November 2018
Did you get an email from AirBnb over your Spanish tax details? – 21st December 2018
Important information from the Spanish Ministry of Finance – 7^th January 2019
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

... Read more

7 Advantages of Making a Spanish will

Raymundo Larraín Nesbitt, January, 3. 2018

This blog post is an excerpt from my original article of the 3^rd September 2009.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
3^rd of January 2018

Ideally, foreigners should make two wills; one in their home country ruling on their national assets and a second Spanish will drawn up in Spain which will rule exclusively on their Spanish estate.

Our law firm can draft you a Spanish Will. More on this service: Will Service.

1. A Spanish will affects only your Spanish estate.
2. Drawing up a Spanish will help your heirs mitigate their tax bill. There’s a deadline of 6 months from the time of the testator’s demise to file and pay Spanish Inheritance Tax (IHT). Late payment of IHT attracts surcharges, penalties and delay interests. A Spanish will cuts through the red tape streamlining the succession procedure so tax is paid on time within the deadline (without attracting penalties and interests on top).
3. Drawing up a Spanish will saves both money and hassle. If you only make an English will, your beneficiaries will have to follow a Grant of Probate in the United Kingdom (over £1,200). You'll need to translate into Spanish by a sworn translator all legal documents, notarise them and affix to each of them the Apostille of The Hague Convention.
All this greatly increases the expenses for your beneficiaries, as well as significantly delaying the whole procedure of transferring your Spanish estate which will attract surcharges, penalties and delay interests (point two above). However, if you make a Spanish will, the above becomes redundant.
4. Spanish wills are stored safely at no extra charge. On making a Spanish will, you will be given only a “copia simple” (simple copy) or “copia autorizada”. The original is stored by the Notary in his files for record. Should you lose your copy, don’t panic. Moreover, all Spanish wills' details are safely stored at Madrid’s Central Registry of Last Wills. One can always request a copy and if you believe you are a beneficiary, they will let you know before which Notary it was witnessed.
5. Spanish wills drawn up before a Notary public add security. Making a will is a personal act. A Notary is a highly qualified law professional who witnesses the signing of the will. He will highlight any incorrection or illegality.
6. The content of a Spanish will is governed by your own national laws. This means that you are not constrained by Spain’s forced heirship rules. Additionally, if you are of British or Irish citizenship, you have free testamentary disposition in Spain. This means you can make a will exactly the same as you would in the U.K. or in Ireland, albeit with all the additional advantages for your loved ones that I’ve highlighted above.
7. Spanish wills can be worded in English. Spanish wills can be drafted in double barrel, English-Spanish, for your peace of mind. So you know fully, at all times, what you are signing at a Notary Public.

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

Legal services Larraín Nesbitt Lawyers can offer you

Inheritance-related articles

New EU Regulation to be Passed on Succession and Wills –18th May 2010
EU Pulls the Stops and Vows to Put and End to Inheritance Taxation Discrimination on Non-Resident Beneficiaries Inheriting in Spain – 20th May 2010
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
Inheritance Tax Novelties in Andalusia. FAQ on IHT – 8th September 2016
Which beneficiaries are hit worst by Spanish Inheritance Tax (IHT)? – 2nd June 2017
Non-Resident: Why you need to make a Spanish will – 24th June 2017
Non-resident: careful on making a will in Spain – 30th August 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

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Non-Resident Income Tax

Raymundo Larraín Nesbitt, December, 1. 2017

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
1^st of December 2017

The festive season is almost upon us. Most people have their minds set in the holiday break and spending some quality time with family and friends.

Unfortunately, it is also the time of the year where Non-Resident Income Tax is due (NRIT, for short). I have written this short blog post as a gentle year-end reminder.

If you own property in Spain, and are non-resident, you are liable to pay NRIT even if you do NOT rent your property out. You have until the 31^st of December to file NRIT without attracting penalties and surcharges.

On selling your property, the Spanish Tax Office will verify you are up do date paying NRIT; otherwise they will simply pocket all or part of the 3% retention a property buyer is forced to withhold on buying your property and pay it into the tax office. Losing 3% of the sales proceeds is a large amount of money for most people. Why not pre-empt this following my advice?

In order to avoid losing money on selling your property in Spain, you should hire a law firm such as ours to file this annual tax on your behalf. This annual tax in itself is actually ultra-low and acts with a purpose of ‘control’. We offer the following legal service for a flat fee:

Non-Resident Income Tax (Fiscal Representation): €90

You can contact us until the 21^st of December 2017 to file and pay your Non-Resident Income Tax. Stragglers are welcome!

What happens if I rent my property out in Spain?

In addition to filing the above annual tax, you will also have to pay a quarterly tax on your Spanish rental income.

When you let your Spanish property, regardless if it is short-term (i.e. holiday home or seasonal let) or long term, you should be filing and paying a quarterly tax on your rental income to the Spanish Tax Office. This tax is collected quarterly, on the first 20 days of every January, April, July and October.

We offer the following legal service which is very competitively priced:

Holiday Rental Accounting Service (HRAS): 100 euros/tax quarter (plus VAT)

On average, we are able to reduce 30 to 40% of a landlord’s taxable base on applying for landlord tax relief (including non-residents, as long as you are EEA/EU-resident).

More details in my article: Renting in Spain: Non-Resident Landlord's Rental Tax Relief – 14th of January 2017

We welcome you to contact us and discuss your tax matters, so you are fully tax-compliant (and pay less taxes of course!).

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

Larraín Nesbitt Lawyers is a law firm specialized in taxation, conveyancing, litigation and inheritance. We will be very pleased to discuss your matter with you. Please contact us for a free initial consultation. 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

Taxation-related articles

Spanish Wealth Tax (Patrimonio) – 8th November 2011
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
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
Holiday Home Taxation in Spain – 8th of July 2017
Non-Resident Income Tax – 1st December 2017
Non-Resident Income Tax – 8^th December 2017

... Read more

The magic of lettings in Spain

Raymundo Larraín Nesbitt, November, 21. 2017

By Raymundo Larraín Nesbitt
Lawyer and Director of Larraín Nesbitt Lawyers
21^st of November 2017

So, you’ve heard all the good news surrounding the explosive double-digit growth on Spanish rental asking prices and your curiosity has been peaked? You may feel half tempted to jump onto the bandwagon of landlords that make a nice little extra income in the summertime renting out to tourists.

But what is holding you back is being put off by all the newspaper articles hammering on the new batch of regional regulations sweeping Spain that have put in place stringent requirements to let properties out to tourists, require a mandatory rental licence from regional Authorities and which are subject to humongous fines on non-compliance. I know, what a bummer.

What if I were to tell you that you could legally sidestep all the above pesky requirements? There is a perfectly legal way to rent out your property in Spain to tourists during the summer season which does NOT require:

Registration of your rental with the regional Authorities. Tick.
No need to apply for a tourist rental licence. Tick.
Your property will not be subject to inspections by regional Authorities. Tick.
You do not need to meet daft expensive requirements such as A/C installed in every room, WIFI, mandatory rental insurance etc. Tick.
You will not be liable for massive fines on non-compliance. Tick.

Interested? Well, come and speak to the experts; we can make it happen for you. *

Making life simple.

*Not everyone qualifies, ask us.

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

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, taxation, litigation and inheritance. We will be very pleased to discuss your matter with you. Please contact us for a free initial consultation. 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

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
Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
Decree 20/2002: Andalusia’s Holiday Rural Rental Decree – 8th of April 2016
Urban Rental Law in Spain – Spain's Tenancy Act – 8th May 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
Community of Owners in Madrid to bar Holiday Rentals – 29th June 2017
Holiday Rental Home Taxation in Spain – 8th July 2017
Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
How to inspect an off-plan property overseas – Interview with The Sunday Times. July 2017
New Balearics holiday rental law – 8^thSeptember 2017
Seasonal lets: an alternative to holiday rentals – 8^th October 2017
Let-to-buy contracts: do not forget to add a clause forbidding sublets! – 20^th October 2017
Andalusia starts fining holiday home landlords – 31^st October 2017
The magic of lettings in Spain – 21^st November 2017
7 illegal clauses in Spanish rental contracts – 8^th January 2018
Holiday Rentals Accounting Service (HRAS) – 16^th January 2018

... Read more

< 27 >

Blog / News

Buying off-plan in Spain? You need a Building Licence

Raymundo Larraín Nesbitt, March, 20. 2018

Conveyancing – Buying from €995.

7 reasons on why you need legal representation on selling in Spain

Raymundo Larraín Nesbitt, March, 7. 2018

Conveyancing – Selling

Spain’s Supreme Court quashes borrower’s hopes on refunds for mortgage set up costs

Raymundo Larraín Nesbitt, March, 1. 2018

Brexit and You

Raymundo Larraín Nesbitt, February, 19. 2018

How (not) to bypass regional Holiday Home Laws in Spain

Raymundo Larraín Nesbitt, February, 9. 2018

Has your Spanish bank notified you they are going to disclose information about you to the Spanish Tax Office?

Raymundo Larraín Nesbitt, January, 30. 2018

Holiday Rental Accounting Service (HRAS)

Raymundo Larraín Nesbitt, January, 15. 2018

Legal fees: €125/tax quarter/per property

7 Advantages of Making a Spanish will

Raymundo Larraín Nesbitt, January, 3. 2018

Non-Resident Income Tax

Raymundo Larraín Nesbitt, December, 1. 2017

What happens if I rent my property out in Spain?

The magic of lettings in Spain

Raymundo Larraín Nesbitt, November, 21. 2017