Lawyer Raymond Nesbitt admonishes on the legal consequences (read substantial fines) of self-registering your holiday-home letting before the ATR without being fully compliant.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
21^st of July 2017

More and more I’m receiving complaints from landlords with holiday rentals in the region of Andalusia who have self-registered before Andalusia’s Tourism Registry (ATR) without being fully compliant. Most of them are going to be landed with stiff fines as I explain below. This has prompted me to write a gentle reminder to all landlords on the legal consequences of registering a property that is not fully compliant in the region of Andalusia.

Three weeks ago, the II Congress of Tourism of the Costa del Sol was held at Marbella. In this congress, the head of the ATR made it clear that when you register your holiday rental in Andalusia you are held responsible and liable for your own self-declaration. It works similar to self-certified mortgages; the person that makes the statement becomes personally liable and will be held accountable of the form he fills in as he declares he is fully compliant on enrolling his property (which frequently is not the case!). The ATRs Director confirmed they had already fined 60 properties in Malaga province alone and hundreds more were in the pipeline on failing to register the properties because they were not fully compliant.

A typical example of this (real case) is a landlord who has not attained a Licence of First Occupation (or equivalent document) for his property but does not want to miss out on the summer letting season. So, what he does is to register 'provisionally' his property on the ATR in the hope of attaining a LFO further down the line (months or even a year after). Put simply, there is no ‘provisional’ registration; or you are in or you are out, period. There is no in-between.

Unbeknownst to landlords, the first thing the ATR checks is if a property has been issued with a LFO by its town hall. The landlord will be fined because, under his own personal responsibility, he declared to be fully compliant when it was simply not the case. He will be landed a fine of minimum €2,000 for this. To give a better idea of what enrolling before the ATR entails, it´s like walking up to a police station and self-admitting to a felony yet acting surprised when punishment is administered! It is basically the same case.

Bottom line, do NOT register your property as a holiday rental before Andalusia’s Tourism Registry unless you fully meet all the law’s requirements (foremost having a LFO) – otherwise you risk being fined!

More details on registration requirements in my blog post: Holiday Rentals in Andalusia Made Easy.

If you are uncertain on whether you fulfil the requirements, contact us free of compromise.

Our law firm offers full registration services of holiday rentals for : POA.

We also offer a comprehensive Holiday Rentals Accounting Service.

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 offer you

• Conveyancing – Buying
• Registration of Holiday Rental Homes
• NIE Number (Tax Identification Number)
• Holiday Rentals Accounting Service

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 – Interview 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

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.

2.017 © Raymundo Larraín Nesbitt. All rights reserved.

Lawyer Raymond Nesbitt explains the importance of being represented by your own lawyer on signing any legal document before a Notary Public.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
14^th of July 2017

A recent case published in Diario Sur in English illustrates the importance of being assisted by your own lawyer on signing legal documents before a Notary Public. An elderly couple, with a villa in Marbella, was seeking a fast loan of €25,000 to finance medical treatment.

The couple approached a group that advertised locally and were cajoled into drafting a document and have it witnessed by a Spanish Notary Public. The foreign couple were goaded to believe, and wrongly assumed, that the Notary Public, being a lawyer himself, would act impartially and would warn them in case there was some odd clause in the contract. They did not believe retaining a lawyer was necessary.

The couple were forced to return to their home country to take care of one of the partners who was ill. Upon their return to Marbella some time later they discovered their villa had its electrical supply cut off. On further investigation, it transpired the property no longer belonged to them, it belonged to a company.

What this couple had in fact done at the Notary was to sign their property over in a Deed to a company as a share capital increase of said company. In return, they had been given shares of the company. So basically, they had undersold a luxury villa in Marbella to a company in exchange of 25k! A tall price to pay for a small loan.

Had this couple been represented by their own lawyer, he would have immediately picked up on the fraud and refused to allow them to sign the Deed. But because the couple thought they knew better, and confident that the Notary would act on their behalf, they signed over their Spanish property for a fraction of its real market price. Cases like this are not rare and happen frequently.

What lessons can be gleaned from the couple’s misfortune?

• A Notary Public is a public servant whose role is to ensure legalities are observed and that payment of taxes will be carried out to the State. His role is to be neutral and does NOT advise the parties, much less in their own language, nor translates documents. Do not rely on a Notary Public to act as your own private lawyer because that is not his role.
• A lawyer, solicitor in Spanish, is a qualified agent that acts and defends his client’s interests. Skimping on lawyer’s fees is ill-fated as the only worse off will always be the client.
• You must be wary of signing any type of legal documents at a Notary Public without being represented by your own lawyer. Beware of those who advocate that hiring lawyers is an unnecessary expense. Think for a moment what vested interest they may have in their being no lawyers involved.

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.

Legal services Larraín Nesbitt Lawyers can offer you

• Property Litigation
• Debt Recovery
• Recognition and Execution of Foreign Court Rulings
• Land Registry Search (Nota Simple)
• Company Registry Search

Loans related articles

• Lifetime Loans or Reverse Mortgages in Spain Explained – 21st February 2011
• Advice to Struggling Mortgage Borrowers in Spain – 8th March 2011
• Spanish Mortgage Loans: Beware of Abusive Clauses – 8th January 2012
• Spanish Mortgage Loans: An Overview – 21st February 2012
• Mortgage Collar Clauses Revisited (‘Cláusulas Suelo’) – 8th December 2013
• Bank Repossessions in Spain – 21st February 2014
• 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

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.

2.017 © Raymundo Larraín Nesbitt. All rights reserved.

Lawyer Raymond Nesbitt explains the legal requirements of holiday rentals in Andalusia. The idea behind this blog post is to give a simplified version of his in-depth article with all the minutiae: Holiday Rental Laws in Andalusia (Decree 28/2016).

Blog post copyrighted © 2017. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
3^rd of July 2017

Holiday Rentals in Andalusia Made Easy

Holiday rentals in Spain are experiencing an unprecedented explosive growth, nothing short of a new property boom.

So much so, that holiday rental asking prices are reportedly soaring by two digits year-on-year as highlighted by recent headlines in Spanish Property Insight and other media outlets:

Rental prices smash boom-time records in six regional capitals led by Barcelona

Front-line beach rental prices up 10pc in a year

Rental asking prices rising fast say portals

As a result, drawn by this new rental frenzy, more and more buy-to-let landlords wishing to capitalise on their Spanish properties are jumping into the fray letting them out short-term to tourists.

If you are interested in registering your holiday rental or hiring our Holiday Rental Accounting Service for your holiday rental business, please contact us.

More information on holiday rental taxation: Holiday Home Taxation in Spain.

Andalusia

The Spanish region of Andalusia passed its own holiday rental law last year. It is known as Decree 28/2016. More details in my article: Holiday Rental Laws in Andalusia (Decree 28/2016).

Almost every region in Spain has its own law on holiday rentals. For a full region-by-region list check my article: Holiday Rental Laws in Spain.

Holiday Rental Excluded Properties

• Properties which are lent to friends or family without an exchange of money (free).
• Properties rented to the same individual for over two months.
• Rural properties.
• Properties within tourist apartment complexes (Apartamentos Turísticos).

Requirement List

• The property must have attained a Licence of First Occupation.
• Rooms must be ventilated and have blinds or shutters to obscure them when necessary.
• Be furnished and equipped with appliances ready for their immediate use.
• Air conditioning unit affixed in every bedroom, including living room (for properties let between May to September).
• Heater must be made available in every bedroom, including living room (for properties let between October to April).
• First aid kit.
• Tourist information including services and amenities in the surrounding area.
• Complaints book.
• Mandatory cleaning service at the start and end of every new lodging.
• Clean bed linen at the start of every new lodging.
• 24-hour contact number for complaints or queries.
• Instructions for the use of household and kitchen appliances.
• Inform lodgers on the use of communal areas, pet regulations, smoking restrictions.

Mandatory Registration before Andalusia’s Tourism Registry (ATR)

If you are going to rent out your property as a holiday rental in Andalusia it is mandatory you first register it before the ATR.

Our law firm offers full registration, POA.

More information on this legal service here: Registration of Holiday Homes.

Non-compliance: Fines and Sanctions

Humongous fines ranging from €2,000 up to €150,000 are levied on non-compliance with this new law.

Over sixty properties have already been fined, hundreds more in the pipeline.

Don´t let it happen to you, contact us.

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 offer you

• Conveyancing – Buying
• Registration of Holiday Homes
• NIE Number (Tax Identification Number)
• Holiday Rentals Accounting Service

Holiday 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
• 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 ban 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

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.

2.017 © Raymundo Larraín Nesbitt. All rights reserved.

Lawyer Raymond Nesbitt explains the advantages, general and specific, for non-residents on making a Spanish will.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
24^th of June 2017

Introduction

If you own property in Spain you should make a will covering it. One of the first questions I normally get asked is if a will witnessed in the United Kingdom or in the Republic of Ireland is valid for assets located in Spain. The straight answer is yes, they are perfectly valid in Spain.

However, despite them being legal, it does not make them practical. Far from it, foreign wills are most impractical as they take far too long to get executed in Spain, normally exceeding the timeframe given by the Tax Office (six months) to file and pay Spanish inheritance tax (IHT). Because they take so long, the timeline to file inheritance tax is surpassed which attracts steep surcharges (of up to 20% of the taxable base) plus delay interests and penalties besides all the unnecessary expenses. All this aggravation, wasted money and hassle could have easily been avoided on following my advice and making a Spanish will in Spain exclusive to your Spanish assets.

There are strong reasons on why qualified Spanish experts, such as lawyers, economists and tax advisers advise non-residents to make a second will exclusive to your Spanish assets.

In this blog post, I will be listing briefly the general advantages of making a Spanish will besides the specific advantages of executing a Spanish will as opposed to executing an English or Irish will.

1. General Advantages: Making a Spanish will as a Non-Resident.

• A Spanish will is exclusive to your assets located in Spain (it does not affect any other assets or wills in your home country).
• Drawing up a Spanish will may help your heirs mitigate their tax bill (see specific advantages below).
• Drawing up a Spanish will save your heirs time-consuming and expensive legal issues.
• Spanish wills are stored safely at no extra charge.
• Spanish wills drawn up before a Notary public (Open wills) add security.
• The content of a Spanish will is governed by your own national laws. Bequeath your assets to whomever you please avoiding pesky Spanish forced heirship rules.

2. Specific Advantages: Making a Spanish will Streamlines the Spanish Succession Procedure saving Time, Money and Hassle.

• Avoids fines for late payment on filing IHT.
• Avoids surcharges for late payment of IHT.
• Avoids delay or penalty interests for late payment of IHT.
• Avoids paying for two sets of legal fees (when only one needs to be paid).
• Avoids paying for unnecessary expensive sworn translations.
• Avoids your heirs wasting unnecessary time following redundant legal procedures which could have easily been avoided altogether.
• Avoids pursuing legalization of foreign documents to make them executable in Spain (i.e. Seal of Hague Convention).
• Avoids your heirs extra hassle at a time of bereavement.

Conclusion

Ideally, non-residents should make two wills; one in their home country ruling on their national assets and a second Spanish will which will rule exclusively on their Spanish estate.

As explained above, preparing a Spanish will – exclusive to your Spanish assets – will save your heirs considerable time, money and hassle at a time of bereavement. It will greatly streamline the succession procedure in Spain without attracting fines, surcharges and delay interests for late payment of inheritance tax.

If you want to delve further on how inheritance tax works in Spain, I have collated my articles below which cover the succession procedure from different angles.

Our law firm offers making a Spanish will legal service at a very competitive fee. Ask us.

Will writing service: from €195

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

• Making a Spanish will
• Spanish Inheritance Tax Assessment Report (SITAR)
• Probate and Succession
• Death Certificate
• Land Registry Search (Nota Simple)

Inheritance related articles

• New EU Regulation to be Passed on Succession and Wills –18th May 2010
• Non-Residents: Six Advantages of Making a Will in Spain – 8th August 2012
• Buying and Owning Spanish Property through Companies: Pros and Cons – 7th March 2014
• Taxes on Selling Spanish Property – 8th December 2014
• 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

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.

2.017 © Raymundo Larraín Nesbitt. All rights reserved.

Lawyer Raymond Nesbitt gives us a brief outline on the application for a so-called Golden Visa in Spain and its incredible advantages for non-EU nationals.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8th of June 2017

Golden Visa Spain

The Spanish Golden Visa scheme has become the gateway to Europe for thousands of applicants pursuing the European dream. They have combinedly invested over 2 billion euros since its launch in 2013. Spain has overtaken Portugal becoming Europe´s number one Golden Visa supplier.

This scheme allows applicants and its dependants unfettered access across Europe´s Schengen Area.

Although the procedure was initially tailored to attract affluent Chinese and Russian citizens, British nationals should seriously consider looking into this procedure with renewed interest.  

The reason is because the UK has opted out of the European Union. This scheme would allow British nationals that lack a EU passport to travel across Europe skipping pesky passport controls in equal terms to EU nationals. Just like before the UK decided to break away from Europe.

If you want more details, please read my in-depth article: Investor Guide to Spain’s Golden Visa Law. You can hire the Golden Visa legal service from our law firm. More information here: Golden Visa Application.

Thousands of non-EU nationals have already benefitted from this scheme, securing their families’ future and well-being.

Why haven't YOU invested in your family's future?

Golden Visa Advantages

• Fast-tracked. This law is specifically tailored to attract affluent non-EU investors, and helps cut through the red tape.
• Travel Europe visa-free. You can travel without a visa for 90 days out of every 180 days within the Schengen Area, but you will still need a visa to enter EU countries outside the Schengen Area (for example the United Kingdom).
• Clear rules. Initially 1 year (Residency Visa), then 2 years (Residency Permit), renewable indefinitely every 2 years.
• No need to become resident in Spain. You only have to visit Spain once to get or renew the Residency Permit. There is no minimum stay requirement, and you don’t have to become a fiscal resident or actually live in Spain.
• Family included. You may get additional permits for your spouse and children under 18 years (or disabled children over 18). Same-sex partners inclusive.
• Spanish nationality (optional). This is a 2-year Residency Permit, not the right to permanent residency or a Spanish passport. However, it can lead to long-term Spanish residency after 5 years of continuous residence, and citizenship after 10 years.
• Underaged children may study in Europe. Underaged offspring can live and study in Spain, in company of your partner, whilst you work and earn money abroad.
• Return on investment. Take advantage of Spain´s burgeoning real estate recovery. Prices are starting to rise led by Madrid and Barcelona. Rock-bottom property prices will not last forever.

General Requirements

 Applicants pursuing investor visas must comply with the following general requirements:

• Non-EU national.
• The investor applicant must be of legal age (18-years-old or over).
• The investor must not hold a criminal record whether in Spain or in the previous five years where he has resided.
• Not be already in Spain irregularly.
• Have access to medical insurance whether private or public.
• Have sufficient financial means to support both himself and his family whilst in Spain.
• Pay the relevant application fee.

Specific Requirements

Qualified residency permits to non-EU residents will be offered in return for any of the following:

• Investing at least €500.000 in Spanish Real Estate property (unencumbered, without taking a mortgage on said amount, you may apply for a mortgage on the excess).
• Investing at least €2.000.000 in Spanish Treasury Bonds.
• Investing at least €1.000.000 in shares of Spanish Companies.
• Depositing at least €1.000.000 in Spanish Bank Accounts.
• A ‘major’ business investment which fulfils at least one of the following three conditions:

1. Meaningful job creation as a direct result of the investment.
2. Significant socioeconomic impact in the geographical location where the activity will be carried out.
3. Technological or scientific impact.

The predecessors plant trees [and] the next generation cools off in the shade – Ancient Chinese proverb.

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.

Legal services Larraín Nesbitt Lawyers can offer you

• Golden Visa Spain
• Conveyancing – Buying

Golden Visa related articles

• Investor Guide to Spain’s Golden Visa Law – 8th November 2013
• 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

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.

2.013 and 2.017 © Raymundo Larraín Nesbitt. All rights reserved.

Lawyer Raymundo Larraín Nesbitt explains to us which taxpayers (inheritors) are likely the worse off on inheriting assets in Spain.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
2^nd of June 2017

Spanish Inheritance Tax is a complex tax that requires planning ahead to mitigate exposure to this tax. Our law firm has expertise mitigating the IHT burden. Ask us.

In this blog post I highlight the beneficiaries (those who stand to inherit assets in Spain) who will likely be the worse off by this tax.

Beneficiaries included in one or more of the following categories below will likely be landed with a humongous IHT tax bill unless they follow my advice and plan ahead:

• Beneficiaries classified in Groups III & IV for IHT purposes (distant relatives or else with no family ties).

Group III: Relatives in second and third degree: in-laws, brothers/sisters (siblings), nephews/nieces, aunts and uncles.
Group IV: Relatives in fourth degree, or without any kinship: a friend, common law partners, mistress.

• Large estate inherited. It is difficult to give a precise number as it is in relation with multiple factors.
• Pre-existing net wealth in Spain of the inheritor is large. The worst-case scenario is an inheritor classified in Group IV who already has a pre-existing net wealth in Spain of over €4,020,770.98 (over £3,000,000) and who inherits over €797,555. In such a case, the inheritor would be applied an extreme tax rate of 81.6% (34%*2.4). This is clearly a problem that only affects someone who was already a multimillionaire before inheriting; not exactly a problem that affects us all (unfortunately!).
• The assets or rights inherited are located in what I label as a ‘tier 2’ region for IHT purposes; meaning the regional exemptions are negligible or non-existent.
• Aged between 21 and 65 years old (because multiple lavish exemptions would not apply to that age group).
• Beneficiaries are non-resident in the EU or EEA (this is because lenient regional tax allowances do not apply to those resident outside the European Union or European Economic Area).

Conclusion

If you plan to leave an estate in Spain to your loved ones, and your appointed beneficiaries qualify for a combination of one or more of the above then you (NOT the beneficiary!) should consider speaking with our law firm to do some serious estate planning to mitigate their inheritance tax exposure – they will be forever grateful.

“If you fail to plan, you plan to fail” – Benjamin Franklin.

Founding Father of the United States. Exceptionally gifted scientist, inventor, diplomat, writer, printer, postmaster and political theorist. Even politician in his spare time; nobody’s perfect.

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
• Spanish Inheritance Tax Assessment Report (SITAR)
• Making a Spanish will
• Transfer of Estate to Heirs
• Death Certificate
• Land Registry Search (Nota Simple)

Related articles

• New EU Regulation to be Passed on Succession and Wills –18th May 2010
• Non-Residents: Six Advantages of Making a Will in Spain – 8th August 2012
• Buying and Owning Spanish Property through Companies: Pros and Cons – 7th March 2014
• Taxes on Selling Spanish Property – 8th December 2014
• 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

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.

2.017 © Raymundo Larraín Nesbitt. All rights reserved.

Lawyer Raymundo Larraín Nesbitt explains to us the questions you should level at your estate agent when you are hunting for office space in Spain. He also supplies us with some basic tips to avoid the most common pitfalls.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
24^th of May 2017

So, you have finally made up your mind and decided to take the plunge setting up your own business in Spain? Good for you.

One of your fist port of calls, on prowling for suitable office space in Spain, will be an estate agent and a seasoned lawyer.

The following are just some of the basic questions you should be asking them, or the landlord, before you commit to signing on the dotted line.

10 Questions you Should Ask your Agent on Leasing Office Space in Spain

1. Verify that who is leasing the property is in fact the owner or else is legally empowered to do so on his behalf before signing any document.

Nothing worse than making a huge down payment upfront only to realise you have been duped out of your money leasing from someone who was not legally empowered to do so.

2. What is the property size?

Do not get short changed on this as leases are often calculated based on the property size and if your property is considerably smaller you will get shafted overpaying.

3. Does it have fibre optic cabling pre-installed?

Nowadays modern business needs require high-speed connections to internet. You really do not want to get stuck leasing office space that still uses a 48k dial-up modem, do you?

4. Can you place your company logo on the exterior?

Something which is so basic is often taken for granted and overlooked on searching for office space. Unless you plan to set up a boiler room (hearsay has it that it is a very lucrative source of income in Spain) you need your company logo on the exterior. Some communities of owners do not allow this, some business centres (centro de negocios) also disallow this. Needless to say, you really need one unless you are into shady business.

5. How much is the rental's deposit?

As I care to explain in my article Urban Rental Law in Spain there is freedom to negotiate with a landlord how many month´s deposit is required as a rental guarantee. Whilst the general practice is a two-month deposit for commercial premises (as per law) I stress there is leeway to negotiate, particularly on high-end commercial lets. For example, a beachfront pad located in a prime location such as Puerto Banus (Marbella) could set you back 12 months. Particularly if you are a non-resident tenant with no ties to Spain, a landlord will ask for more cast-iron financial guarantees (to hedge himself) as you may be perceived as a risky option. It is convenient this is cleared and negotiated by the parties from the outset as it is often a contentious point. More information on rental guarantees in my article: Renting in Spain Safely.

6. Who Pays IBI tax and the Community of Owners Quota?

To avoid yourself nasty surprises this will be one of the first questions you should be asking. As a general rule, landlords shore up with both. However, in practice this may not be the case. So, make sure you ask first to be on the safe side. IBI tax is explained in my article Non-Resident Taxes in Spain. CO quota is explained in my article Community of Owners.

7. Who pays for Rubbish Collection Tax?

Again, a question that is frequently overlooked by would-be-tenants. The general rule is that the landlord pays for it but can be agreed otherwise so careful with the small print. Rubbish collection tax is explained in my article Non-Resident Taxes in Spain.

8. Who pays for the utilities (water & electricity)? Are the utilities connected (up and running)?

Although the answer may seem rather obvious at first, that it is the tenant who pays for both, in practice you may be surprised to learn that it is in fact the landlord who pays for water in office lets. Electricity is paid for by the tenant. You should also inquire if the utilities are currently connected to the supply grid unless you fancy the excitement of waiting for weeks on end (the infamous mañana, mañana one dreads to hear) for someone to actually turn up (unannounced) at the property and connect you…

9. Does it have (modern) A/C?

Spain is a hot country all year round, particularly in the summertime. You really do not want to get stuck signing off a 12-month commercial lease only to find out the AC system is a vintage General Electric machine harking back to the 50s. This is one expense you should not be dragging your feet on and splash generously; bottom line, get yourself a good modern AC system.

10. The Landlord

Success or business failure is often linked to your rapport with a landlord. Try to always be on his good side as they can easily make your life downright miserable. You should ask your agent on this.

Conclusion

Remember the golden rule that no matter how charming an estate agent may seem (Hollywood smile and all), he always works for the landlord; not for you. Don´t make (wrong) assumptions and do your own research.

For your own good, hire a competent lawyer from the outset to review any lease agreement before you commit and sign on the dotted line (or any other legal document for the matter). You will save yourself considerable money and aggravation on the long run sidestepping the most common blunders professionals are all too keenly aware of.

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:

• Rentals
• Taxation
• Conveyancing – Buying

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
• How to Buy Commercial Property in Spain – 4th July 2014
• 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
• Decree 20/2002: Andalusia’s Holiday Rural Rental Decree – 8th of April 2016
• Urban Rental Law in Spain – Spain’s Tenancy Act (Ley de Arrendamientos Urbanos, LAU) – 8th of May 2016
• Energy Performance Certificate – 7th of November 2016
• Renting in Spain - Landlord´s Taxation – 8th of January 2017
• Renting in Spain: Non-Resident Landlord's Rental Reliefs – 14th of January 2017
• 10 Questions you Should Ask your Agent on Leasing Office Space in Spain – 24th May 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.

2.017 © Raymundo Larraín Nesbitt. All rights reserved

Lawyer Raymundo Larraín Nesbitt explains to us the relevance of a new ruling from Spain´s Constitutional Court that affects all vendors of Spanish property, including non-residents. Specifically, vendors selling property at a loss and how they can claim back a full refund on their Plusvalia tax, plus legal interests.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
Thursday 18^th of May 2017

Following up on my blog posts from March 2017, Spain’s Constitutional Court rules ‘Plusvalia’ tax is illegal if property is sold at a loss and Recap of Legal Actions in Spain against Banks & Others, Spain’s Constitutional court in a new landmark ruling from last 11^th of May stated that the ‘plusvalía’ tax can no longer be charged by town halls when a vendor sells a property at a loss. This ruling has nationwide effects.

In plain English; no profit, no taxation.

I strongly recommend my blog posts from March are read in tandem with this other post to fully understand the new tax situation.

As a quick recap, on selling property in Spain, a vendor is liable for two taxes (you can read further in my article Taxes on Selling Spanish Property):

1. Capital gains tax (paid to regional Authorities).
2. ‘Plusvalía’ tax (levied by town halls).

Regarding the first tax, capital gains tax, I had already covered in a detailed article the consequences of receiving a ‘Complementaria’ or Bargain-Hunter tax and how to appeal it successfully. I won´t mention it further in this post.

Today´s blog post will focus on the second tax listed above; the so-called ‘plusvalía’ tax. On selling, property vendors need to pay this tax as a result of the increase of value in the land to the town hall where the property conveyed is located. If there is no increase in value it stands to logic no tax should be collected, right? Wrong!

Town halls have fought tooth and nail to avoid this as they are overdependent on this local tax. This tax constitutes in most cases their main source of income. Only last year over 140 million euros were collected in Malaga province alone.

In March’s blog post I explained how the Constitutional Court ruled that some articles of a regional law from the Basque Country were deemed unconstitutional. The wording used in that regional regulation was in fact a blatant copy of a national law, word-for-word. So, it stands to logic I argued that if the court declared it was unconstitutional for the Basque Country it follows that its null and void effects should also be made extensive nationwide; which is exactly what´s happened two months on.

The new key ruling from 11^th of May has done just that. Spain’s Constitutional Court has declared, with nationwide effects, that when a vendor sells a property at a loss they are no longer liable to pay plusvalía tax. 

Before you put the champagne on ice, please continue reading for the small print…

Practical Effects of this New Ruling

• All vendors who sold property at a loss as from May 2013 can now request a full refund of plusvalía tax plus legal interests on top (a lawyer needs to be hired).
• It is estimated over 550,000 vendors qualify for this refund since 2013.
• Refunds on average stand to be in excess of €1,000.

Does that mean I no longer have to pay this tax on selling at a loss?

No. You will be expected to pay this tax on selling a property whether you have made a profit or not on selling property.

Hang on, you just said that on selling at a loss you no longer had to pay this tax! This is as clear as mud!

The law has still not been amended. Spanish Courts cannot rewrite tax laws but may declare them null and void. Tax laws need to be formally repealed, redrafted and enacted by Congress. It may take a while until a consensus is reached on new legislation and is formally approved by all political forces.

In the meantime, town halls, despite all these rulings from Spain’s Constitutional Court, will continue to exact from vendors the plusvalía tax as if nothing had changed.

As I wrote back in March, town halls are heavily reliant on the plusvalía tax to finance their public coffers. Ruling or not, they will continue to demand this tax until a new tax law has been approved on the matter. Don´t hold your breath waiting.

What to do If you sold property at a loss after May 2013

To claim, you must first pay the plusvalía tax as normal.

Only once paid, can your lawyer then lodge an appeal to claw back this tax successfully. Following this new ruling from May, the chances to attain a full refund (plus interests) are now excellent (they were moderate back in March when I first wrote on the subject prior to this new ruling).

Timeframe to Claim

Unfortunately, vendors can only claim back tax dating the last four years as any tax collected before May 2013 is now time-barred. In other words, any vendor who’s sold a property at a loss since May 2013, and has paid plusvalía tax, is now entitled to a full refund. The vast majority of vendors paid on average €1,000 or more in plusvalia tax on selling at a loss.

Can I claim without a lawyer?

You can certainly try and fail. You need a lawyer, period.

How to Claim

The process is not straightforward as it requires the input of professionals. It does not suffice to show the difference between the buying and selling price in the Title deeds as it will surely be turned down by the Administration. You need to appoint a competent law firm to act on your behalf to claw back this tax. To appeal the tax successfully a technical report must be commanded to back the legal recourse.

Contact us for more information on your matter. We will be glad to assist you.

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.

Blog post also published at Spanish Property Insight: Selling property at a loss in Spain: ‘Plusvalía’ tax no longer payable

Legal services Larraín Nesbitt Lawyers can offer you

• Litigation
• Taxation
• Conveyancing – Selling

Related articles

• Taxes on Selling Spanish Property – 8th December 2014
• ‘La Complementaria’ or Bargain-Hunter Tax – 8th May 2015
• House Hunting in Spain – 17th June 2015. The New York Times
• Non-Resident Taxes in Spain – 8th December 2015
• Snagging List Explained – 28th October 2016
• Energy Performance Certificate Explained – 7th November 2016
• Selling Property in Spain – 10 Reasons to Hire a Lawyer – 8th December 2016
• 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

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.

2.017 © Raymundo Larraín Nesbitt. All rights reserved.

Lawyer Raymundo Larraín Nesbitt explains what documents are required when driving in Spain.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
Wednesday 10^th of May 2017

                                                                                                                                              Photo credit: José Manuel Casal

Whilst driving in Spain, you can be stopped at any point in time by the Guardia Civil or the National Police. It is strongly advised that you carry all the documents required by law (whether you are resident or non-resident).

In addition, Spanish-plated cars are expected to carry a series of extras which can also be checked besides the documents.

1. Spanish-Plated Cars: Mandatory Documents

• European Driving licence (in force).
• Permiso de Circulación (vehicle registration document).
• Tarjeta de inspeccion técnica ITV (equivalent to the UKs MOT report.)
• ITV sticker (to prove you are driving an MOT-compliant car).
• Car insurance. Spanish police can now find online if your car is insured. It is no longer required you carry a receipt of having paid it.
• Resguardo Impuesto sobre Vehículos de Tracción Mecánica (IVTM). Receipt of having paid your annual town hall car tax.

Additional Extras Spanish-plated cars must comply with

It is mandatory, by law, to carry all the following:

• (Small) fire extinguisher.
• Two warning triangles.
• One yellow reflecting safety jacket.

2. Non-Spanish Plated Cars: Mandatory Documents

• Driving Licence (in force).
• MOT report (in force).
• Car insurance (green card).

Word of Advice

Whilst not strictly obligatory, which is why I do not list it above, I strongly recommend you carry at all times in your car at least two copies of a European accident report (parte amistoso de accidentes in Spanish). Your insurance company can supply you with these free of charge. They are most useful when somebody bumps into you on the road and you pull one out and complete it on the fly with the other driver’s car details.

I have done this several times in the past to much success always claiming from the other driver’s insurance company. It is also a very good idea to pull out your smart phone, like I do, and take several pictures of the accident to avoid ‘misunderstandings’ further down the line.  

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.

Driving in Spain related articles

New Driving Laws in Spain – 8^th December 2014

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.

2.017 © Raymundo Larraín Nesbitt. All rights reserved.