Marbella-based Larraín Nesbitt Lawyers has over 22 years' taxation & conveyancing experience at your service. We offer a wide range of over 60 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Copyrighted © 2025. Plagiarism will be criminally prosecuted.

Introduction

Spain’s new Housing Law of 2023, introduced a new index to which all residential rental contracts must be indexed going forward. It replaces the popular Consumer Price Index (or CPI, for short) which was used by almost all rental contracts in Spain.

IRAV stands in Spanish for ‘Índice de Referencia de Arrendamientos de Vivienda’ (or Rental Price Index, in English).

What is the IRAV?

It’s a new rental price index elaborated by Spain’s National Institute for Statistics (INE). Following the approval of the new Housing law, all landlords and tenants must use the IRAV to update their rental contracts every year in line with inflation. The IRAV will be updated and published monthly.

To which contracts does the IRAV apply?

The rental price update index applies only to contracts signed on, or AFTER, the new Housing Law came into force on the 26th of May 2023.

What happens with rental contracts that do not include a rental update clause?

As a general rule, landlords may not update the rental payment, which must remain the same during the contract’s duration until its termination.

What happens to rental contracts signed before the Housing Law was passed?

They carry on the same. If they had already included a rental update clause, they continue to use the price index to which they were benchmarked, such as the Consumer Price Index.

However, it should be noted the Spanish government capped the increase of the CPI which currently stands at 2% until further notice.

Does the IRAV apply to all rental contracts? 

No, as mentioned in the article’s introduction, it only applies to residential contracts.

Meaning other types of contracts are excluded from its application, such as:

• Holiday rentals
• Commercial rentals (offices)
• Parking spaces
• Storage rooms
• Etc

Give us a practical example of how IRAV works

Let’s imagine we signed a posh housing rental in Claudio Coello in Madrid in December 2023 for €3,000/month. After 12 months are up, every December, our monthly rental payment will reset in line with the published IRAV.

Our landlord’s lawyer will serve us a registered letter informing us our rental has now been updated as of the 1^st of December 2024 in line with the published IRAV. For the month of December 2024, the published IRAV was 2.28%.

So, the updated monthly rental will be €3,068.40, which will apply over the next 12 months until it is reset again next December.

LNA has a 100% track record of attaining Spanish visa & residency permits since 2013. We have assisted over one thousand satisfied visa clients and their families.

At Larrain Nesbitt Abogados (LNA) we have over 22 years of experience specializing in taxation, and property conveyance. We also assist clients with immigration & residency visas and inheritance procedures (probate). You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

Please note the information provided in this article 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. Ní neart go cur le chéile. Voluntas omnia vincit.

Larraín Nesbitt Abogados, small on fees, BIG on service.
2025© Raymundo Larraín Nesbitt. All Rights Reserved.

Marbella-based Larraín Nesbitt Lawyers has over 22 years' taxation & conveyancing experience at your service. We offer a wide range of over 60 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Copyrighted © 2025. Plagiarism will be criminally prosecuted.

12^th of February 2025
By Raymundo Larrain

• Introduction
• The political reasons behind this announcement
• The real reasons behind Spain’s rising rental and housing prices
• Negligible impact on the real estate market
• Negative effects of the proposed 100% tax on non-EUs
• Domestic challenges: difficult and lengthy implementation
• Foreign challenges: EU legal and technical constraints
• The principle of primacy of EU law
• A practical solution to circumvent the 100% tax
• Conclusion

Introduction

On Monday the 13th of January 2025, Spain’s president floated the idea to levy a tax of 100% on home purchases by all non-EU nationals (e.g. American and British citizens). This highly controversial announcement warrants a closer examination of its political motives, practical implications, negative effects, and legal feasibility.

The political reasons behind this announcement

To better understand the motives behind the proposal, we must place it within the broader context of Spain’s politics. The acting president, and his administration, are embroiled in high-profile court cases. The ongoing turmoil has politically undermined the Spanish government, leading to legislative stagnation over the past year due to a lack of political support.

Beleaguered by domestic political challenges, the president is allegedly mulling the idea of advancing the general election to summer in a bid to shore up his political support. The 100% tax proposal should be viewed through the lens of electoral strategy. It is a politically motivated announcement aimed at assuaging his disgruntled domestic audience rather than a serious policy initiative.

In Spanish politics, such proclamations often serve as “political bravado” rather than actionable measures. On Sunday 19^th of January, in a political rally in Extremadura, Mr. Sanchez claimed he wanted to “outright ban home purchases by non-resident buyers from outside the EU” on the grounds “they are all (property) speculators.”

Spain’s president has irresponsibly pinned the blame on the unbridled rise of housing and rental prices on property speculation fuelled by non-resident non-EU nationals. Non-EUs have been publicly singled out by the president as being singlehandedly responsible for Spain’s dramatic rise in housing and rental prices!

In plain English, non-EUs are being used by the Spanish president as a scapegoat to elude political responsibility for his own administration's failings. He is following a tactic of denial and deflecting the blame on foreigners (who do not get to cast a ballot, so there is no political cost in blaming them).

This is a ludicrous statement, and I explain in the points below why it is unfounded and untrue.

I will also care to explain the negligible effect the proposed tax rise will have on rising house prices, but it will however impact severely on local businesses and employment if it comes to fruition.

The real reasons behind Spain’s rising rental and housing prices

Spain has experienced a sharp demand for housing accommodation over the last few years.

Demand has outstripped the supply of new homes by a long shot which led to higher house prices. In some Spanish cities, and selected coastal areas, this translates into a two-digit growth year-on-year.

This dramatic rise in house prices has closed the doors to buying property by a great segment of the native population. This has sowed a growing discontent amid the president’s electoral base which demands energic and resolute measures from him to counter or even turn it around. This is what prompted Monday’s announcement.

However, despite the president’s claims in a political rally that house and rental price rises are fuelled by non-residents speculating with Spanish property, the real reasons are quite different as I care to explain below.

1. Rental prices.

As highlighted in multiple articles in the past, the misguided government’s housing policy and rental legislative initiatives, which are ideologically driven, have greatly backfired, driving rental prices sharply up over the years.

In effect, they have fuelled and exacerbated the unabated rise of rental prices nationwide (as landlords have massively pulled out of the property market, afraid of these new rental measures which go out of their way to protect tenants at the expense of landlords). Following the laws of demand and supply, these counterproductive laws passed by the Spanish government have led to higher rental prices as fewer units were on offer. Although the Spanish government pursued what I view as lofty goals (to assist vulnerable collectives to gain access to housing at affordable pricing) it did so by steamrolling landlords’ rights.

Spain has adopted and pursued social housing policies at the expense of owner’s private property. By completely ignoring the plight of landlords, and only focusing on tenants, the government forced scores of owners to withdraw en masse their properties from the rental market. It is estimated that, in the last 5 years, over 250,000 properties pulled away from the rental market.  This property shortage impacts on housing supply which, following the laws of demand and supply, leads to a sharp rise in rental prices. This market imbalance creates a vicious spiral that feeds upon itself, perpetuating and exacerbating the housing problem as fewer and fewer properties are made available to rent, driving rental prices up. The government, in view of higher rental prices, then enacts even more draconian rental laws with huge fines associated making the situation even more unbearable.

Moreover, the very vulnerable collectives the government vowed to protect by enacting these new rental policies are shunned by landlords which has exacerbated further their plight as they are now openly discriminated against in the rental market. New rental laws are completely biased towards tenants which makes landlords reluctant to rent as they stand to lose a great deal in the event their tenants fall into arrears.

In short, Spain’s lopsided housing policy has backfired, making it even more challenging for vulnerable social collectives to access affordable rental prices. In effect, the clumsy rental policies followed by the government have made it (much) worse for vulnerable tenants.

The road to hell is paved with good intentions.

1. Housing prices

There are several factors underlying a sharp rise in house prices over the last years, some domestic and others foreign. To simplify, I will only brush on what I believe are the main two culprits.

The combination of both points below led Spain to build 70% fewer houses than only a two decades ago which again, following the laws of demand and supply, severely impacts house prices driving them sharply up. If property demand remains steady, whilst supply is greatly reduced, property prices greatly appreciate. It’s not rocket science.

The main reasons behind Spain’s shortage of new homes (tight supply) are as follows:

• Post-Covid-19, the world faced a supply chain disruption on several fronts. This resulted in long delays and increased costs. As a result, building materials employed by property developers in new builds skyrocketed, which greatly impacted the final sales price. This led to significant parts of the Spanish population being priced out of the market.
• In addition, Spain amended its planning laws forcing developers to allocate 40% of their plots as earmarked for social housing. Again, the lofty idea behind this policy was to provide affordable housing to vulnerable social collectives. However, developers were not given the freedom to concentrate all the social housing within one space to avoid the remainder of the units being affected commercially. There is no point in building if you cannot sell the units. This change translated into property developers building properties abroad, or reducing the number of new builds, where planning regulations are more simpatico to them.

Negligible impact on the property market

Despite its provocative nature, the proposed policy would have a minimal impact on Spain’s overall property market. Of the approximately 587,000 annual property transactions in Spain during 2023, only 18,648 involved non-EU nationals. In other words, non-EU buyers accounted for 3% of the overall 2023 property sales following the official statistics supplied by the Notaries Association of Spain.

Give me a break, hardly a drop in a wide ocean.

Even if enacted, this tax would scarcely dent rising house prices or the broader real estate landscape. In short, the policy lacks practical significance and serves more as a grandiose rhetorical gesture than a meaningful solution to Spain’s unbridled rise in housing and rental prices, which is indeed a legitimate concern.

Negative effects of the proposed 100% tax on non-EUs

Foreigners, and in particular non-resident non-EU nationals, tend to concentrate in Spain’s beautiful coastal areas, Balearic and Canary Islands. These foreigners do not normally buy property in large Spanish cities such as Madrid, Barcelona, Valencia and Malaga with the notable exception of South American immigrants because of their cultural and linguistic affinity.

As a result of where these foreigners like to settle down, thousands of local businesses (private schools, real estate agencies, international supermarkets, interior and home decoration, restaurants, etc) may find themselves in dire straits after this announcement. All these people, all these companies, are heavily reliant on non-EU’s to conduct their daily business. The lion’s share, with a great difference, are British nationals who would be gravely affected by the new tax proposal. British nationals account for almost 20% of Spain’s Tourism, giving them de facto great leverage.

Make no mistake, this policy would also impact tourism, as some people may take to boycott the country. Tourism accounts directly for 12% of Spain’s GDP, and a further 6% indirectly. In plain English, Tourism moves one-fifth of Spain’s economy. The Achilles heel of Spain, besides its underwhelming political class, is its undiversified economy, excessively focussed on tourism. This unhealthy dependency on tourism was made apparent during the Covid-19 outbreak, which severed all tourism income and forced Spain to become even more reliant on issuing public debt to balance its bloated finances.

Moreover, property owners who are heavily dependent on foreigners to sell their high-end properties (as their price range is well out of reach of Spanish nationals) may be forced to a sharp drop in sale prices as their pool of prospective international buyers would dry up overnight, at least until the dust settles.

All these companies that dot Spain’s coastlines, which heavily rely on non-EUs, may face the hardship of this foolish decision jeopardising their financial viability. The livelihood of thousands of people is at stake.

Domestic challenges: difficult and lengthy implementation

Spain is divided administratively into 17 autonomous regions which have devolved competencies on tax matters (within limits). Each of these regions has their own regional parliaments to enact laws. It would take a very long time, even years, in some regions to coordinate and enact such laws.

Moreover, some regions are politically opposed to Spain’s ruling party and may reject, if not outright challenge, the proposed 100% tax on non-EU buyers which would judicially bog down its implementation pushing it back several years. Examples of these regions are Andalusia, the Balearic Islands, Madrid, and Valencia.

In short, it would be a protracted and time-consuming procedure which, in the best case scenario, will take years to implement.

Foreign challenges: EU legal and technical constraints

More critically, the proposal faces severe legal barriers. As a member of the European Union, Spain is bound by core tenets that include the free movement of goods, services, and capital. These principles, enshrined in foundational treaties, such as the Treaty of Rome from 1957, forbid Member States from enacting policies that restrict in any way the flow of investment, including from non-EU countries.

These guiding EU principles undergird the Union and cannot be undermined by any of its members, including Spain. In plain English, Member countries cannot enact laws which impede in any way, shape or manner investments, even if they are of non-EU origin i.e. American or British.

The principle of primacy of EU law

The supremacy of EU law over national legislation is a well-established principle. When conflicts arise between EU and national laws, the former prevails. National laws that clash against EU laws may be challenged and EU law will prevail, always.

For instance, the Spanish government previously attempted to restrict lenient tax breaks on inheritance passed by regional authorities so they only benefitted Spanish nationals. This policy was challenged in Brussels on grounds of fiscal discrimination against fellow EU citizens and was ultimately overturned by the European Court of Justice (ECJ) in a landmark ruling of the 3rd of September 2014. The ECJ’s decision forced Spain to backpedal on its fiscal policy and extend the tax benefits, not only to all EU nationals, albeit to all non-EU nationals. This quaint example proves the limitations of adopting unilateral national policies that blatantly disregard, or even clash, with the Union's interests as a whole.

The Union is a supranational construct that aims to unify European countries within a single political and economic block (mirroring the successful US model) to avoid wars that have historically ravaged the European continent. On joining the Union, Spain ceded sovereignty on certain matters which affect the Union as a whole. Spain is not at liberty to adopt rash policies, such as applying a 100% tax rate on non-EU nationals, as this would have a broader impact on the Union, even affecting its foreign policy.

Even if Spain were to ignore all the obstacles collated above and decided to foolishly plough ahead and implement a 100% tax on non-EU property purchases, it would almost certainly face legal challenges at the EU level. The European Court of Justice, which routinely overrules Spain’s Supreme Court, would likely nullify such a measure for violating core EU principles. Moreover, Spain’s membership in the EU entails a mutual commitment to adhere to shared beliefs, laws and regulations. Unilateral actions that contravene these agreements are neither feasible nor enforceable.

The bottom line is that when you are a Member State of the Union, it is a two-way street; you don’t get to do what you want unchecked. EU legislation is the coup de grace of the proposed new 100% tax.

A practical solution to circumvent the 100% tax

The Spanish president stated his government would enact a 100% tax on all non-resident non-EU buyers.

Surprisingly, circumventing his restriction couldn’t be easier.

All you need to do is stop being a non-resident on buying property. If you first attain Spanish residency, you bypass the new 100% tax!

Our law firm has assisted over 1,000 non-EU visa applicants, and their families, over the last decade.

You can read one of our detailed immigration articles on how to attain Spanish residency: Moving to Spain in 2025? Spanish visa overview.

Conclusion: much ado about nothing

The proposed 100% tax on non-EU property purchases is a prime example of political posturing.

While it may generate sensational headlines, and temporarily deter investment, it is unlikely to materialise due to its negligible market impact and clear legal incompatibilities, both at a national and EU level.

For Spain, as an EU member, such policies are not only impractical but also legally untenable. Wayward Member States may not adopt policies contrary to the Union’s best interests, undermining it and even jeopardising its long-term survival prospects for the sake of a career politician's short-term political gain.

Ultimately, this irresponsible announcement should be seen for what it is; an electoral tactic designed to capture domestic attention rather than a genuine policy initiative. It is unlikely this proposal will come to pass. There is no need to lose sleep over it.

“A house divided against itself cannot stand.”  – Abraham Lincoln

Abraham Lincoln (1809 – 1865). From an impoverished humble background of corn farmers, this self-taught American lawyer, strategist, and politician would rise to serve as the 16th US President. He resolutely ensured a pro-Union victory, strengthened the federal government, modernized the economy, brought about the emancipation of slaves and preserved the Union. During his tenure, he held presidential elections in 1864 to be re-elected, amid a devastating Civil War that threatened to tear his country apart and engulf it in a sea of darkness; yet he gave example in the face of adversity, holding steadfast to his ideals, steering the ship safely into port and acting as a beacon of Democracy which light shone with a fierce intensity the likes of which the world has never witnessed, before or since. Never again would a country hold presidential elections amidst a bloody civil war in what constitutes one of History’s greatest democratic feats to date. But most importantly, he went to great lengths to ensure the festering wounds left open during the fratricidal Civil War were healed; generously reconciling both sides in equal terms, as one nation, indivisible, under God. Through his courage and sacrifice, which ultimately would claim his own life, Lincoln laid the groundwork of what was to become the greatest and most powerful nation on earth over the next two centuries. A true statesman that would always put ahead of any consideration the best interests of his people, by tearing down divisive walls and fostering at every opportunity union. It is for this very reason, that more than two centuries on, he is widely regarded as the greatest American President to grace the White House. Likely, the greatest American of all time, towering above the rest.

At Larrain Nesbitt Abogados (LNA) we have over 22 years’ experience assisting clients buying, selling, or renting properties. We can also offer you a competitively priced accounting service to file your landlord taxes every tax quarter nationwide. We are also specialized in immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 07543 838 218, Spanish line (+34) 952 19 22 88, or by completing our contact form to book an appointment.

Please note the information provided in this article 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 will result in criminal prosecution. Ní neart go cur le chéile. Voluntas omnia vincit.

Larraín Nesbitt Abogados, small on fees, BIG on service.
2025 © Raymundo Larraín Nesbitt. All Rights Reserved.

Marbella-based Larraín Nesbitt Lawyers has over 22 years' taxation & conveyancing experience at your service. We offer a wide range of over 60 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Copyrighted © 2025. Plagiarism will be criminally prosecuted.

16^th of January 2025
By Raymundo Larrain

On Monday 13th of January Spain’s president floated the crazy idea of taxing up to 100% home purchases by non-EU nationals (i.e. British).

I’ll preface my post quoting Cicero:

"The closer the collapse of the Empire, the crazier its laws are." — Marcus Tullius Cicero (Roman statesman and lawyer).

The Spanish government, and in particular its acting president, is beleaguered by major corruption scandals (understatement) which extend to his inner circle. This has created a great political weakness which has resulted in almost no laws being passed in Spain over the last year.

The president has been mulling the idea to pull forward polling day, likely by early summer, so as to shore up his greatly undermined political support. Translation for laymen, this means the government has changed gears and is in electoral mode. Meaning any major political announcement, such as Monday's 100% tax, needs to be construed under the light of political spiel. With Spanish politics, you need to learn to read between the lines. This was an announcement aimed exclusively for the consumption of his domestic political audience and no heed should be paid to it by foreigners. It is a political bravado.

Now that we have gotten out of the way why he made such an irresponsible declaration on Monday, let us examine why the impact of this policy would be negligible and - fundamentally - why it cannot be done for technical reasons.

1. Overall negligible impact

His irresponsible announcement on Monday made the headlines the world over.

However, overall property sales in Spain average 540,000 a year. Of which, 27,000 are accounted for by non-EU nationals, which is under 5%. In plain English, property sales to non-EU’s are a drop in the ocean and will not matter one iota in the overall grand scheme of things.

So even if he put into motion his announcement, it would serve no practical purpose and it would barely make a dent in rising house prices.

But now let’s move forward on why he cannot do it for technical reasons.

2. Why a 100% tax on home purchases by non-EUs cannot be done for technical reasons

Spain is a Member country of the European Union, which has guiding principles that undergird the Union and cannot be undermined by any of its members, including Spain. Amongst these core tenets is the free movement of people and capital. This principle, enshrined in multiple laws and regulations, including the Founding Treaty of Rome from 1957, cornerstone of the Union, is often overlooked by career politicians. It means that Member countries cannot enact laws which impede in any way, shape or manner investments, even if they are of non-EU origin i.e. British or American. The principle of primacy of European Union law is based on the idea that where a conflict arises between an aspect of EU law and an aspect of law in an EU Member State (national law), EU law will prevail.

As an example of this principle of primacy, some regions of Spain passed lenient tax breaks on inheritance law which in practice resulted in no inheritance tax to pay. The Spanish government restricted these tax breaks to Spanish nationals only.

This was challenged at Brussels on grounds of fiscal discrimination (as it affected the free movement of goods and people) towards fellow EU nationals inheriting assets in Spain. Spain was forced to open the door and allow these tax breaks to nationals of all EU Member states. However, Spain adamantly refused to apply the tax breaks to non-EU nationals. Once again, this was challenged and the European Court of Justice issued a landmark ruling on the  3^rd of September 2014 which basically slapped Spain on its wrist and forced it to extend the tax breaks to everyone, EU nationals and non-EU nationals alike, in effect quashing any fiscal discrimination which would be at loggerheads with the EUs Founding Principles.  

Long story short, Spain embarrassingly was forced to backpedal on its fiscal policy. As a result, none of my UK clients pay IHT on inheriting estates in Andalusia, as they benefit from these tax breaks that apply to all EU nationals, including non-EU's. For reference, my article at the time: Inheritance tax in Spain: regional tax reliefs to benefit ALL non-residents in the future (even outwith EU/EEA) – 26th August 2019

Spain is a country incardinated within the EU's legal and economic framework. On joining the Union, Spain ceded sovereignty over certain matters which affect the Union as a whole. Spain is not at liberty to adopt rash policies, such as applying a 100% tax rate on non-EU nationals. And even if it shot itself in the foot, ploughing foolishly ahead, this law would surely be appealed - and won - at the ECJ; which I remind everyone is the highest court in the land, even towering above Spain's Supreme Court. The ECJ embarrassingly overrules Spain’s Supreme Court all the time, as every lawyer knows.

The bottom line is that when you are a Member State of the Union, it's a two-way street; you do not get to do what you want unchecked.

Monday's announcement is another prime example of much ado about nothing. Yes, granted, it will make great headlines in the international press and will even deter investments in the short term, but ultimately it will not come to pass. It's just political posturing, and Spanish politicians have proven adept at it.

In short, I will not lose my sleep over it and neither should you.

At Larrain Nesbitt Abogados (LNA) we have over 22 years’ experience assisting clients buying, selling, or renting properties. We can also offer you a competitively priced accounting service to file your landlord taxes every tax quarter nationwide. We are also specialized in immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 07543 838 218, Spanish line (+34) 952 19 22 88, or by completing our contact form to book an appointment.

Larraín Nesbitt Abogados, small on fees, BIG on service.
2025 © Raymundo Larraín Nesbitt. All Rights Reserved.

Marbella-based Larraín Nesbitt Lawyers has over 22 years' taxation & conveyancing experience at your service. We offer a wide range of over 60 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Copyrighted © 2025. Plagiarism will be criminally prosecuted.

7^th of January 2025
By Raymundo Larrain

In a surprise move, the Spanish government approved last Thursday a 3-month grace period for Golden Visas.

Golden Visas were to end by the 1st of January 2025. In effect, the government extended Golden Visa applications during the first quarter of 2025. This was approved by Law 1/2025.

Concretely, the Golden Visa program now officially ends on the 3^rd of April 2025.

Never say never again.

During this three-month transition period, Golden Visa applications will still be accepted, and applications pending as of the effective date will still be reviewed normally.

Apply for your Golden Visa today through LNA. 100% visa success rate since 2013.

The law's wording:

Disposición final vigesimoprimera. Modificación de la Ley 14/2013, de 27 de septiembre, de apoyo a los emprendedores y su internacionalización.

La Ley 14/2013, de 27 de septiembre, de apoyo a los emprendedores y su internacionalización, queda modificada como sigue:

Uno. Se dejan sin contenido los artículos 63, 64, 65, 66 y 67.

Dos. Se introduce una nueva disposición transitoria primera con la siguiente redacción:

«Disposición transitoria primera. Solicitudes presentadas con anterioridad a la entrada en vigor de la Ley Orgánica de medidas en materia de eficiencia del Servicio Público de Justicia.

Aquellos inversores o familiares de inversores que, con anterioridad a la fecha de entrada en vigor de esta disposición transitoria, hubieran presentado la correspondiente solicitud, podrán recibir el visado o autorización correspondiente conforme a la normativa vigente en la fecha de presentación de la solicitud.»

Tres. Se introduce una nueva disposición transitoria segunda con la siguiente redacción:

«Disposición transitoria segunda. Renovaciones de visados y autorizaciones para inversores por adquisición de bienes inmuebles.

Los visados y autorizaciones para inversores que tengan validez a la fecha de la entrada en vigor de esta disposición transitoria, conservarán dicha validez durante el tiempo para el que hubieran sido expedidos.

En el caso de presentarse solicitudes de renovación, se tramitarán y resolverán conforme a la normativa vigente en la fecha de concesión de la autorización inicial.»

We are on the last days to file a Golden Visa residency permit.

If you have not done so already, please contact us urgently.

There is still time to file your Golden Visa.  

LNA offers this blue ribbon visa service in under 3 weeks:

Golden Visa (investor visa)

LNA has a 100% track record of attaining Spanish residency

At Larrain Nesbitt Abogados, we have assisted hundreds of non-EU nationals, and their families, to successfully attain a Spanish residency permit since 2013.

Immigration & visa services available from Larraín Nesbitt Abogados:

• Golden Visa Service (Investor Visa)
• Non-Lucrative Visa (Pensioner’s Visa)
• Lucrative Visa (Business Visa)
• EU-Family Regroupment (Marriage Visa)
• Digital Nomad Visa (Tax-free visa)
• Non-Domiciled Tax Scheme (Beckham's Rule)
• Spanish Residency permit for EU nationals

At Larrain Nesbitt Abogados (LNA) we have over 22 years’ experience assisting clients buying, selling, or renting properties. We can also offer you a competitively priced accounting service to file your landlord taxes every tax quarter nationwide. We are also specialized in immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 07543 838 218, Spanish line (+34) 952 19 22 88, or by completing our contact form to book an appointment.

Larraín Nesbitt Abogados, small on fees, BIG on service.
2025 © Raymundo Larraín Nesbitt. All Rights Reserved.

Larrain Nesbitt Abogados has over 22 year’s taxation & conveyancing experience at your service. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Blog post copyrighted © 2024. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
6^th of January 2025

Introduction

On dealing with property in Spain, you will often come up with a series of property values that may seem somewhat confusing at a first glance. Some people are surprised to find these valuations differ significantly from one another. In today’s post we briefly explain each one and their purpose.

1. Rateable value (valor catastral)

It is the assessed value local Tax Authorities give to a property in Spain. It is usually well below the market value (BMV). This rateable value is used as the taxable base to calculate a series of property-related taxes. You will find the cadastral value of your property in one of your local tax bills (i.e. IBI or SUMA). Be aware that a storage room or parking space may be regarded legally as a distinct separate entity from your main home and therefore subject to their own individual cadastral values. A cadastral value, in general terms, is 30 to 40% below the market value of a property. Rateable values, in theory, should be updated by local administrations every ten years to bring them in line with inflation. However, in practice, this is often not the case. The less this value is updated, the less tax the owner will pay.

2. (Auction) appraisal value (valor de subasta)

When you command a property valuation from a Spanish surveyor, they will typically ask you if it’s for a lender or for you. When you apply for a mortgage loan, your lender must send by law a chartered surveyor to a property who will carry out a bank valuation. On average, the appraisal will be 30 to 40% BMV. The reason behind this great discrepancy is explained in detail in our article bank valuations vs. market value. The short version is that lenders, in the event of a bank repossession, need to work with a property value that offers a sizeable buffer to factor in all the associated repossession expenses involved. That is why lenders tend to significantly downgrade property valuations for the purpose of a mortgage loan; they need to value them ‘conservatively’. This buffer ensures all their repossession costs will be adequately covered, protecting themselves in the event of a foreclosure, cutting down their losses. In effect, a bank valuation is only useful for the lender.

3. Market value (valor de mercado)

This is what most layman normally understand on being asked after the value of their home. This will be the value listed with estate agencies on selling or renting a property.

Closing thoughts

To close, it should be noted that whilst a property may have a high intrinsic value (i.e. good location, commanding views, close to amenities, close to the beach, etc), its price may experience sharp slumps or increases, in line with the economy. This is particularly true of real estate markets with a tight demand which are prone to be volatile (i.e. those not located in large cities), as they are heavily location dependant and not resilient, leading to sharp price fluctuations on the change of economic cycles, creating unique business opportunities for savvy investors.

“Sólo el necio confunde valor y precio”. – Antonio Machado

Loosely translated as: “Only fools confuse value with price.”

At Larrain Nesbitt Abogados (LNA) we have over 22 years’ experience assisting foreign clients buying, selling, or renting properties in Spain. We offer a competitively priced accounting service to file your landlord taxes every tax quarter nationwide. We are also specialized in litigation, and immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 07543 838 218, our Spanish line (+34) 952 19 22 88, or by completing our contact form to book an appointment.

Larraín Nesbitt Abogados, small on fees, BIG on service.

2024 © Raymundo Larraín Nesbitt. All Rights Reserved. Plagiarism will be criminally prosecuted.

From Larraín Nesbitt Abogados, we wish all our clients and friends a Merry Christmas and a Happy New Year!

The law firm will now remain closed for the holiday season and will reopen for business on Monday the 6th of January 2025.

                                                                            ---

Desde Larraín Nesbitt Abogados, deseamos a todos nuestros clientes y amigos unas muy Felices Fiestas y un próspero Año Nuevo.

El despacho permanecerá cerrado por vacaciones y nos reincorporaremos el lunes 6 de enero 2025.

Early on in my career, I was making small talk with a notary. He told me his daughter had just graduated in Law and already had three job offers. The first one was at a prestigious law firm where they offered her a respectable €2,000/month. The second job was at a leading bank where they offered her a superb €3,000/month. And finally, she was offered by an NGO a whopping €5,000/month.

Unsurprisingly, she chose the NGO as her first job. To put this into perspective, the best student in my class, studying a joint degree in Law and Economics in Madrid, got offered that same wage working for a top US consulting firm.

In other words, the NGO was grossly overpaying a newly graduated student aged 22.

Moving on, on the 29^th of October 2024 Valencia was struck by tragedy. Devastating flash floods led to the deaths of hundreds of people, including half a dozen children. This tragedy brought out the best in people but also the worst.

Spanish people, of all walks in life, are very generous by nature. Understandably people sought to contribute to the thousands of afflicted by gifting food, warm clothing and water. Spain’s Red Cross is the country's number one NGO by a long shot, with over half a billion euros in public budget granted by the government. It remains, in most cases, as the first choice to contribute. Alas, giftors were shocked to find out the Red Cross flat out refused any food, clothes or water and would only accept money (?). This odd behaviour prompted an investigation by some inquisitive journalists.

As a result, the newspaper Gaceta.es published on the 7^th of November 2024 a scathing exposé which revealed that Spain’s Red Cross allocated over 92% of its 2023 public budget to pay staff wages, including an uber generous €4mn wage packet to its top brass! To put this into perspective, that’s more than what CEOs of medium banks get paid in Spain!

In plain English, 9 out of 10 euros given to the Spanish Red Cross by the Spanish government ended up in the pockets of its staff and (very) well-paid executives during 2023. With less than 0.80 cents actually reaching those in need. In 2023, 475 million euros (out of a €514mn public budget), or 92% of its public budget, went straight to pay their 'workforce'.

Now I don't know about you, but those numbers don't look right to me. Maybe I'm just naive, but I'd reasonably expect over 90% of all donations made to the Red Cross to go towards their self-declared charitable goals (with a reasonable 10% spent in admin costs and overheads) not the other way around. Never in my wildest dreams would I expect them to pocket almost all the money generously gifted to them. Nor would I expect the top dogs of a charity to take home a paycheck of €4 million every year. That's just ludicrous.

My advise, knowing firsthand how some NGOs work in Spain, is that before you gift ANY money to an NGO is that you first do your research and check thoroughly their annual spending activity. Demand to see a full breakdown of their company accounts (which should be audited by an independent company). If they start with the Data Protection Act BS just move on to the next.

As my gran used to say: "It doesn’t matter what people say, what matters is what they do."

Call me old-fashioned, but back in my day, people that did volunteering expected nothing in return except the occasional warm smile from those bereft. Nowadays you have cynical people driving around town in posh German cars with kids enrolled in fancy British private schools working for NGOs for a sizeable monthly paycheck!

Something has to give.  

Marbella-based Larraín Nesbitt Lawyers has over 21 years' taxation & conveyancing experience at your service. We offer a wide range of over 60 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Copyrighted © 2024. Plagiarism will be criminally prosecuted.

15th of November 2024
By Raymundo Larrain

The Golden Visa program is now confirmed to be phased out as of January 2025.

We are on the last days to file a Golden Visa residency permit.

If you have not done so already, please contact us urgently.

There is still time to file your Golden Visa.  

LNA offers this blue ribbon visa service in under 3 weeks:

Golden Visa (investor visa)

LNA has a 100% track record of attaining Spanish residency

At Larrain Nesbitt Abogados, we have assisted hundreds of non-EU nationals, and their families, to successfully attain a Spanish residency permit since 2013.

Immigration & visa services available from Larraín Nesbitt Abogados:

• Golden Visa Service (Investor Visa)
• Non-Lucrative Visa (Pensioner’s Visa)
• Lucrative Visa (Business Visa)
• EU-Family Regroupment (Marriage Visa)
• Digital Nomad Visa (Tax-free visa)
• Non-Domiciled Tax Scheme (Beckham's Rule)
• Spanish Residency permit for EU nationals

At Larrain Nesbitt Abogados (LNA) we have over 21 years’ experience assisting clients buying, selling, or renting properties. We can also offer you a competitively priced accounting service to file your landlord taxes every tax quarter nationwide. We are also specialized in immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 07543 838 218, Spanish line (+34) 952 19 22 88, or by completing our contact form to book an appointment.

Larraín Nesbitt Abogados, small on fees, BIG on service.
2024 © Raymundo Larraín Nesbitt. All Rights Reserved.

I have taken almost 10 days to blow off some steam before writing anything on this matter.

In today’s blog post, I’m going to analyse the actions of two men, of two Spanish presidents from the same political party, with a similar tragedy striking, but with very different outcomes.

In 1983, tragedy struck at the heart of the Basque Country. A terrible flashflood swept Bilbao threatening the lives of thousands. The then president, Socialist Mr. Felipe Gonzalez Marquez, acted decisively, as befits a statesman, immediately declaring  a National Emergency (as it is the president's prerogative), and mobilized all national resources deploying within 48 hours 10,000 men (a further 3.000 men were added over the next days), 200 vehicles, and 50 heavy machinery to clear the roads and remove the debris. This tragedy resulted in 34 dead and 5 missing.

As a sidenote, Bilbao is the capital of the Basque region, which is a politically sentive area with active separatist movements. The fact Mr. Gonzalez boldly deployed the Spanish Army within speaks volumes. To take it into perspective at the time, it's akin to a UK Primer Minister sending in thousands of British paratroopers into the IRA stronghold in the 70's, even if for all the right reasons; it's an audacious and highly controversial political move. Truly, a president with cojones who takes on the mantle of responsibility.

Actions speak more than words.

The resolute action of Mr. Gonzalez resulted in saving hundreds, possibly thousands, of lives. This is what we expect from a leader, from a statesman. And this is one – of many reasons – why Mr. Gonzalez will pass on to history as one of the finest Spanish presidents of all time.

Right, let’s fast-forward 41 years, to the 29^th of October 2024.

The Spanish government ignored all flashflood warnings from the Met Office on the 29^th of October 2024 and did nothing, nada. The flashfllood swamped dozens of Valencian towns without any prior warning, and were all caught by surprise. They were woefully unprepared for what came next.

Disaster struck, and hundreds died (214 as of today), and 93 are still reported officially missing (initial reports estimated 1,900 people missing).

What happened next is that Spain’s government, led by the Socialist president Mr. Sanchez, did nothing – nada – for 5 (five) full days and nights, leaving it all to the regional authority of Valencia which was overwhelmed (ruled by an opposing political party). The central government did not declare a State of Alarm, nor send in the Army, nor any heavy machinery to assist and rescue the survivors. Moreover, it actively blocked and thwarted any help to the stricken region of Valencia resulting in even more deaths. The Spanish government’s inaction kills.

As a result, countless deaths followed which could have been easily averted had the central government stepped in and acted.

Hundreds of villages have been left to their own devises, and it is the neighbours themselves who are cleaning up the muck and debris, even with their bare hands.

After 5 days, Mr. Sanchez had the gall to show up in a Valencian town to be photographed (!) and was pelted by mud by the neighbours amid shouts too rude to reproduce here. Two official cars were damaged, and the president himself was hit with a stick hurled at him by the gathered crowd. The government attributes these attacks to “well-organised, radical ultra-right-wing movements”. Three people were detained on the following days, and all happened to have no affiliation to any political party whatsoever, and no previous criminal record; they were simply aggrieved townsfolk of the afflicted town Mr. Sanchez visited to take pictures of himself.

Mr. Sanchez still continues to this very day (ten days after) not to call a National Emergency on what’s happened in Valencia. He has also flat out refused all international help kindly offered by multiple countries (?). Moreover, instead of bending over to release government funds to assist all the people affected and rebuild the land, he’s blackmailing the opposition to approve his 2025 budget (which would cement his prower grip over Spain for the next years) in which he deviously included Valencia's relief funds. So, if the opposition does not yield and approve his budget, it will be them who will be made to look bad.

In effect, Mr. Sanchez is ruthlessly exploiting a human tragedy that has killed hundreds of innocents, including children, for his own political gain.

These are the facts.

And now onto my personal opinion.

I have long criticised Mr. Sanchez in multiple articles and blog posts over the years for all the things he’s done. Mr. Sanchez is widely accepted as the worst president in Spain’s young democracy, even surpassing the ineptitude of his colleague Mr. Zapatero (which is quite the feat).

But after what’s transpired in Valencia over the last week, he’s upped the ante and raised his game to a whole new level of depravation. He’s de facto now become the most hated man in all of Spain - by his own demerits.

All of these deaths, all of these losses, could have been averted, or greatly mitigated, if we had a real statesman in office.

And this is why Mr. Gonzalez will pass on to history and be fondly remembered as one of the finest statesmen Spain has ever had.

Ans this is why Mr. Sanchez will pass on to history as the worst, and most despised, spineless career politician of all time; a vile man.

The whole Spanish government must be judged, found guilty, and held accountable for one of the greatest derelictions of duty in history.