Marbella-based Larraín Nesbitt Lawyers has over 20 years' taxation & conveyancing experience at your service. We offer a wide range of 50 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 © 2023. Plagiarism will be criminally prosecuted.

One more year, the increase of rental prices has pulverised all previous records! Rental prices have soared by two digits over the last year on average in large cities and coastal areas. This consolidates a long standing trend that goes all the way back to 2016. Granted, inflation has played a large role on this steep increase, but even so this sharp increase is truly impressive!

As we published back in February 2021 (8 Tips to rent like a pro (Buy-to-Let)), Buy-To-Let in Spain has proven a very successful investment for savvy investors. Scores of landlords make large amounts of rental income every tax quarter. You can realistically expect to rent out nine months a year in Spain as a holiday rental.

In addition, Spain’s taxation on rentals award huge tax breaks to EU-resident landlords. Landlords can expect tax breaks of 70%, or more, on (rental) income tax. We’ve published several taxation articles on the lenient tax relief landlords can apply for: Buy-to-let in Spain: landlord tax reliefs - 23rd May 2019

The rental money can be used to offset overheads and maintenance expenses, including servicing mortgage repayments. No other investment is giving a consistent 5% net yield/year safely! By comparison, bank deposits in Spain give 0%.

But that’s not all, it only gets better!

Besides soaring rental yields, you also need to factor in the property’s capital appreciation (the increase in value of real estate over time). Properties in Spain have seen their value increase over the previous five years at an average rate of 5% pa. In large cities, this has even surpassed two digits i.e. Madrid.

Pro-tip: When you combine both soaring rental yields and capital appreciation, you reach the conclusion that Spanish real estate is giving a safe two-digit return year-on-year.

In plain English, that's over a 10% yield every year safely! This is ideal for retirees who are afraid of sharp stock market fluctuations, roller coaster cryptocurrencies, and seek a safe and consistent return on their investment year on year to build up their pension pot.

At Larrain Nesbitt Abogados we have over 20 years’ experience buying, selling, and renting properties. We are also specialized in immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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

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.

2.023 © Raymundo Larraín Nesbitt. All Rights Reserved.

21^st February 2023

I sincerely apologize in advance to our gentle readers for banging on this topic again, but I find it most necessary to be addressed.

Last November I published a scathing article on Spain’s second wealth tax. In this article I digressed to cover the matter of Spain’s ballooning public debt. At the time, I quoted the official figure of 1.5 trillion euros, which we now know to be incorrect. In January 2023 it was made public that there was an additional (hidden) 500 billion euro debt held between Spain’s 17 regions. For technical reasons, that I will not go into, this debt is not tallied in the overall public debt. But to all intents and purposes, it is obviously a part of it. So the real public debt of Spain now stands at 2 trillion euros. Let that sink in.

'Officially' our debt to GDP ratio stands at 113%, which doesn't look all that bad. However, when we tally the 'hidden' debt from Spain's 17 regions (the 500 billion euros), the truth is closer to 170% of GDP which starts to mark a point of no return. Every day over 300 million euros are piled onto this debt as rolled over interests. One third of Spain's national debt is held by the European Central Bank, Spanish banks hold a large percentage as well 'encouraged' by the government.

You can chek out Spain's public debt in real time here: Spain's debt clock

I stress again that inflation levels are here to stay for the long run, no matter what monetary authorities the world over claim (US Fed: “transitory inflation” yada yada). Fact is we are going to live through a decade of high inflation. Historically, the only way to combat a high inflation is by way of cooling the economy by raising the price of money (interest rates). You can go blue in the face arguing the contrary, but central banks will be raising interest rates over the next years no matter what.

Ok, now we have put that out of the way, let’s focus on Spain. As I’ve highlighted in multiple articles and blog posts over the years, Spain has a severe overreliance (read addiction) to public debt. Now while it's true that most western countries are heavily indebted, the prime example would be the US with a 33 trillion debt (bonkers), Spain has serious structural issues it needs to address.

In a context of soaring inflation (in Spain officially standing at 6% YOY as of January 2023, unofficially its well over 20%), holding a huge public debt is in effect a time bomb. If interest rates continue to rise sharply, in a trend that shows no signs of abating, Spain will have serious issues to face its interest repayment commitments, let alone the principal. Each 100 basic points in rise translates to approximately 14 additional billion euros in interest repayments alone (source). As a result, the overall debt increases with each new rise of interests, which in turn commands a higher interest rate going forward.

This is not science fiction.

Back in 2011 – 2013, Spain almost defaulted when credit rating agencies lambasted Spain’s borrowing ability. It’s ability to repay the loan interests on its multiple financial commitments almost failed and was on the verge of being bailed out by the IMF/EU. Had it not been for the decisive and resolute intervention of the ECB, Spain would have defaulted. Just for reference, our debt to GDP ratio was at the time sitting at 35% (2007). Now its at 170% GDP and mounting...

You’d think that after such a close call, our politicians would have learnt the lesson and would be weary of over indebting the country again – well, think again. The incumbent Spanish President has ballooned our public debt by well over 30% in the space of only a couple of years seeking short-term political gains. I just cannot begin to word how very irresponsible this is.

If the trend in rising interest rates continues unabated (fostered by soaring inflation, wars, and new Covid strains which disrupt the worldwide supply chain), as it is highly foreseeable, Spain will face severe challenges to honour its repayment commitments which may even lead to a default over the next years.

The fact is that the European Union has, for far too long, indulged in Spain’s reckless public credit addiction embodied by Mr Sanchez. This needs to be put to a stop, not only to save Spain, but the Union as a whole.

If Spain (and Italy, which doesn't fair much better) defaults, will Germany, the Netherlands and others rally to pay Spain's public debt? Really? This could seriously jeopardize and compromise the Union itself, as some countries would opt out (as they have no independent monetary policy to devalue their own currency).

Spain has the highest unemployment levels of any country in the OECD (38 countries). Officially its 13%, the truth being far more. Youth unemployment is well over 50%.

Spain also happens to have the highest fiscal pressure in all of Europe (highest taxes), on average 27% higher than its European peers.

I don’t know, I’m no economist, but you’d think someone would look into a correlation between high taxation and high levels of unemployment and draw meaningful conclusions, hmm? It doesn't take a nobel prize in Economy to realize that high taxation does not attract foreign investments, quite the opposite. It also does not create incentives fort businesspeople to start their own companies. High taxation kills the economy, and most fundamentally impoverishes the middle class which is the backbone of a healthy democracy.

In my humble view, Spain needs to urgently:

1. Lower taxes across the board (as is being done in Andalusia, Galicia, and Madrid to much success, creating thousands of new jobs on its wake). The misguided economic policies pursued by our social-communist government, driven by ideological reasons, only weakens the economy and creates unemployment. It’s the economy stupid!
2. Deregulation. Streamline and simplify admin procedures, reducing red tape. These changes would carry over to multiple aspects, getting rid of the deadwood in an oversized public sector, and making it leaner and more efficient.
3. Address once and for all high civil servants’ wages. Nobody wants to open this can of worms, albeit the country cannot afford to pay 14% of its GDP in public civil servants wages, its ridiculous. Civil servants, that have attained their station through hard exams, deserve every cent they earn, granted. However, the problem lies with the vast majority of civil servants who have taken no exam, are grossly overpaid (i.e. town halls), and in most cases have been assigned for their political affinity in lieu of their competency. In fact, public sector wages are on average 70% higher than their private sector counterparts. Spain can simply not afford it.
4. Reduce public expenditure. As an example, Spain has 22 ministries (again, crazy). Spain must drastically cut back on its wild public expenditure to create a lean, small, and agile public sector. As is stands now, we have a bloated public sector with over 5 million civil servants that don't even answer the phone (or email back) to take appointments. The system has collapsed.
5. Cut back on NGOs (chiringitos, in Spanish) which soak up billions of euros in grants, aids, subsidies and whatnot every year. It’s just paying back for political favours and serve no real purpose.
6. Centralize and restructure its regional bodies, cutting back on redundant political and outdated administrative structures that serve no practical purpose (other than to provide a golden highly-paid retirement nest to glorified ex-politicians).
7. Liberalize land. A huge culprit in the high prices of land are town halls themselves through their taxation which they use mostly to fund the super high wages of civil servants (which, in most cases, have passed no entry exams and are appointed for 'political affinity' btw). This would immediately impact on housing, by way of greatly reducing the raw material of development: the land. This would make housing more affordable across the board.
8. Pensions. It’s a volatile topic, granted, but Spain cannot realistically afford to pay the new over-the-top pensions. Spain’s Social Security is bankrupt, it keeps getting bailed out by our central government again and again, which in turn is bailed out by our (overgenerous) EU Overlords.
9. Spanish banks need to start paying interests on bank deposits to foster saving habits and protect wealth. Spain is the only country in the EU which banks are giving a 0% interest on bank deposits. Guess where all the pensioners and people who have savings are piling their debt into? Yes, that’s right, they are buying like there is no tomorrow Spanish public debt which gives them almost a 3% annual interest. Still well below inflation, but hey always better than nothing. The cynic in me cannot stop thinking this is being done on purpose by our government so our savers pile all their money into Spanish public debt, creating a pernicious debt spiral. God forbid!

Inset photo: Spanish savers frantically queuing up at Spain's Central Bank to buy Spanish public debt (gilts). As reported by Expansion in January 2023.

Spain had a tax surplus of over 130bn euros in the last tax year (because unlike other EU Member states, it did not deflate taxes in line with inflation), it has received over 37bn euros from a NextGen Funds aid packet of 130bn euros. You'd think that after this huge windfall Spain would be swimming in cash, yes? Wrong! After all this, it is still very much strapped for cash! Shouldn’t this unrelenting craving for public debt set alarms off, hello anyone?

I’m really sorry to bang again on this, but the EU must intervene and cut back on Spain’s unbridled craving for public debt. It is leading the country to a financial disaster, over indebting all future generations, and to top it off, it poses an existential threat to the European Union itself.

Spain's huge public debt is a major source of concern for us all, with independence of the reader's political affinity. It doesn't matter one iota what people's ideology is, the only thing that matters is what Spain is going to do to solve this, and more fundamentally, what the Union is going to do about it to avoid the ghost of a new Greek default that would shake the foundations of the Union to its very core. The only difference is that Spain's economy is far larger than that of Greece in 2015.

Ideally, the (huge) structural problems that Spain faces should be addresssed - voluntarily - by Spain itself, before it is too late.

Realistically, knowing all too well our political class, from all the political spectrum, they are simply not fit for the task and it will ultimately hinge on external players (the Union, the FMI, etc, creditors in effect) who will bear the onus to impose on Spain such structural changes.

Meanwhile, back in Spain, Podemos, the pro-Russian, hard-left (read communist) junior partner of the socialist government, relentlessly seeks to purposely overindebt the country further (besides attacking the Constitution of 1978 and the Monarchy), day in and day out, with stupid social and economic measures (e.g. universal rent of 1,400 euros, higher taxation levels, new taxes, higher public expenditure, increase the debt ceiling, etc) that will only lead to an unmitigated economic disaster that will threaten to break up Spain (separatists, nationalists, pro-terrorists, the governments political 'allies' would all jump at this golden opportunity). Hmm, I wonder who would stand to benefit from the ensuing economic chaos, the social upheaval, the political instability, the disunity?

The breaking up of Spain - as a unified political entity since 1492 - would create massive ripples that would lead to the weakening of core European Union pillars and institutions that act as guarantors of peace and stability throughout the continent. Such rash actions would only benefit bears' and dragons’ autocratic and expansive political agendas. European politicians, for the most part, play checkers whilst power-hungry players due east play chess, to win.

People, smell the coffee and get a grip!

“When you owe the bank one million, you have a problem.

  When you owe the bank 100 million, the bank has a problem.” – Anonymous.

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.

2.023 © Raymundo Larraín Nesbitt. All Rights Reserved.

Last weekend, a dear childhood friend confessed to me that although she was brought up in a middle class household, she had now fallen to working class. She would no longer be able to afford her own children the comforts associated (and that we often take for granted) with the middle class. The tipping point was reading this week this article which compelled me to write a short blog on the matter.

As I’ve often written in my articles, the strength of a democracy is correlated with the strength of its middle class. For it is the middle class of any country that undergirds the power of a healthy and balanced democracy, acting as a backbone. A dwindling middle class only spells political instability.

In these trying times of war, civil strife, global pandemics, soaring inflation, uber high taxation, and now a sharp increase of interest rates the middle class is being put to the test. More and more millions of families are facing the hardships of the errors caused by our self-complacent political class. And no, I am not referring exclusively to Spain, my comments also apply to the United Kingdom, the US, and many other democratic countries.   

The politicians we have our days -with few exceptions- are career politicians, self-absorbed, that take decisions on the hoof based on short-term opinion polls; they are tacticians, always thinking on the next six months ahead, on the next polls. No longer do we have serving statesmen who are strategists and have their hearts set on the welfare of the many with a view on the nation’s long run. As a result, we are witnessing all over the world how the middle class is taking the brunt of these difficult times, weakening in effect western democracies, to the great delight of autocratic powers due east, always with a keen eye waiting for a chance to pounce and further their despotic and imperialistic agendas.

Like in the not-so-distant past, this will leave the door ajar for extremist movements to seize the opportunity and rise to power, abetted and financed by those autocratic regimes which seek to undermine the foundations and resolve of western democracies. They will capitalize on people’s discontent, on their newfound financial misfortune, sowing dissension and questioning our democratic values and beliefs.

But it is often said, and history proves it, that our greatest leaders turn up on the eve of such hard times, often from within the humblest ranks of our society. For they know, better than anyone, the values, and benefits that in time grow from nurturing the seeds of democracy.   

“The legitimate object of government is ‘to do for the people what needs to be done, but which they can not, by individual effort, do at all, or do so well, for themselves’.” – 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 into 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, he 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.

Marbella-based Larraín Nesbitt Lawyers has over 20 years' taxation & conveyancing experience at your service. We offer a wide range of 50 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 © 2023. Plagiarism will be criminally prosecuted.

As we predicted in previous articles (Spanish Government introduces inflation control in long term rentals – 1^st April 2022 and also Spanish Government extends the 2% rental cap a further 3 months - 21st June 2022), because of Spain’s high inflation, the government would continue to renew the 2% inflation cap on long term rentals.

The Government approved last December 2022 to extend the 2% rental cap for all of year 2023. This means that any rental update, on renewing a rental contract, is capped at 2%. Meaning that landlords have to bite the bullet and withstand the brunt of the (sharp) increase of inflation. Once again the government’s lofty ideals come at the expense of other people’s private property.

Spanish rentals have increased on average by more than 10% in most regions. This is very concerning as it represents a steep spike that affects vulnerable families' pockets.

Spain’s National Bureau of Statistics (INE) reported inflation hit 5.8% Year-Over-Year during January 2023. Although inflation ‘officially’ stands at 6%, in practice, it’s well over 20% as anyone can vouch for.

In view of the continued spike in inflation, the Spanish Government has extended the rental update cap of 2% to all of year 2023.

It has also approved several other measures such as:

• Rental contracts that end on or before the 30^th of June can be forcefully extended a further 6 months.
• Vulnerable tenants have seen the tenant evictions cancelled over the next 6 months until the 30^th of June (this will likely be renewed again and again by the Government).

For professional landlords (defined as owning 10 or more properties), rental updates are capped at 2%. For laymen, there is freedom to negotiate. However, if no agreement is reached, a 2% limit also applies. In practice, this translates into a 2% limit for everyone.

Again, I stress it is highly likely our government will continue to renew the rental cap indefinitely until Spain’s high inflation is brought to heel, which realistically could take several years, if we are to go by historic records.

So, a far cry from the ‘transitory’ inflation Monetary Authorities claimed we’d live through (as we advised all the way back in 2021: Tax breaks on buying property in Andalusia extended indefinitely! – 8th December 2021). Inflation is here to stay for the long run.

At Larrain Nesbitt Abogados we have over 20 years’ experience buying, selling, and renting properties. We are also specialized in immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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

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.

2.023 © Raymundo Larraín Nesbitt. All Rights Reserved.

Marbella-based Larraín Nesbitt Lawyers has over 20 years' taxation & conveyancing experience at your service. We offer a wide range of 50 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 © 2023. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
21st of January 2023

Spanish daily El Pais reports this week the Balearics regional government (hard left wing) is seeking a way to reduce the price of houses. This is a lofty goal, no doubt, to make housing more affordable for all. The problem is how they plan to achieve this.

To achieve this end, it is studying to ban house sales to all foreigners, in the wake of other countries adopting similar measures such as Canada and New Zealand.

Moreover, the ban would be extensive to all Spanish nationals who are not resident in the Balearic Islands! In other words, only Spanish nationals who have resided over 5 years in the Balearics could buy property if this law is approved.

The newspaper goes on to add that the negative impact of such a (draconian) measure -in the words of several reputed 'experts' which have been consulted- would be negligible.

Well, I don’t claim to be an expert, but I beg to disagree. I think it's akin to dropping a nuclear bomb on an already stagnant property market. But what do I know?

The whole economy of the Balearic Islands is heavily dependent on tourism and property ownership, of which a large part is in foreign hands. If the Balearics starts banning property sales to all foreigners (and even non-resident Spanish nationals!) it is only logical to assume that property prices will drop sharply, as in effect local politicians would have intervened the sales market to favour their electorate. Canada and New Zealand have their economies well diversified, they are not overreliant on tourism and property sales as the Balearics is.

And make no mistake, after this housing market bill they will go next after the tourism & hospitality industry. They will seek measures to restrict the amount of tourism to the Balearics using as an excuse to defend the environment and whatnot. The bottomline is that they want the islands only for themselves, period.

If this (daft) draft bill is approved, foreigners should consider (very) carefully on whether to buy property in the Balearics. Or be prepared to accept offers well below the real market value. I'm sure Germans wil love this idea.

This is not the first time the communist Balearics regional government floats such 'original' ideas. Last time they were planning on expropriating empty houses owned by foreigners. Fortunately, the central government stepped in to tone this down a notch, or two. Let’s hope it does it again.

"Common sense is the least common of the senses." – anonymous.

At Larrain Nesbitt Abogados we have over 20 years’ experience buying, selling, and renting properties. We are also specialized in taxation, immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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

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.

2.023 © Raymundo Larraín Nesbitt. All Rights Reserved.

Marbella-based Larraín Nesbitt Lawyers has over 20 years' taxation & conveyancing experience at your service. We offer a wide range of over 50 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 © 2023. Plagiarism will be criminally prosecuted.

Just a gentle reminder to all non-residents, who own property in Spain and rent it out (whether long or short-term i.e. holiday home); you must file your Q4 2022 quarterly tax return now in January 2023. You are being taxed on your rental income for the previous three months: October, November, and December.

For 2022, the non-resident tax calendar was as follows:

• Q1 January – March. Filed on the first 15 days of April
• Q2 April – June. Filed on the first 15 days of July
• Q3 July – September. Filed on the first 15 days of October
• Q4 October – December. Filed on the first 15 days of January 2023

Our cut-off date to accept filing Q4 2022 non-resident tax returns is Friday the 13th of January 2023.

Please do not wait until the last moment to submit your quarterly tax return. We file this tax online all over Spain within 24 working hours.

We can offer you this tax service for a very competitive fee: 

• EU resident: 125 euros*
• Non-EU resident: 75 euros*
  

*_{The quoted fee is plus vat, per property and per tax quarter, it includes up to two joint owners i.e. husband & wife.}

Our fees are 100% tax-deductible from the tax to pay.

The main highlight of our tax service is that we reduce your income tax by 70%, or more, on applying for lenient landlord tax relief on all your property-related expenses.

Contact us and pay less tax. If you overpay taxes in Spain, it's only because you want to.

Related tax service

Holiday Rental Accounting Service (HRAS)

Related taxation articles

• Holiday Rental Laws in Spain – 8th of March 2015
• Non-Resident Taxes in Spain – 8th December 2015
• Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
• Renting in Spain - Landlord´s Taxation – 8th of January 2017
• Holiday Home Taxation in Spain – 8th of July 2017
• Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
• Non-Resident Income Tax – 8^th December 2017
• Holiday Rental Accounting Service (HRAS) – 16^th January 2018
• Holiday Rental Taxation in Spain – 8th July 2018
• Renting in Spain: are you still overpaying income tax every quarter? – 16^th October 2018
• You are taxed at source on renting out in Spain – 30^th November 2018
• Did you get an email from AirBnb over your Spanish tax details? – 21st December 2018
• Important information from the Spanish Ministry of Finance – 7^th January 2019
• Property portals and rental platforms to pass on landlord details to the Spanish Tax Authorities. Are you prepared? - 12th January 2019
• Holiday lettings: VAT invoice dissected – 11th February 2019
• Requerimiento - Spanish tax agency's summons – 7th March 2019
• Save 70% on your landlord tax bill – 8th March 2019
• Spain's new rental law in 2019 – 8^th March 2019
• 8 Tips for Buy-To-Let Success in Spain – 21^st October 2019
• Rentals climb for the fifth consecutive year in Spain! – 12^th February 2020
• Spanish Government caps rent hikes to 2% in 2022 – 1^st April 2022
• Spanish Government extends the 2% rental cap a further 3 months – 21^st June 2022

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.

2.023 © Raymundo Larraín Nesbitt. All rights reserved.

Marbella-based Larraín Nesbitt Lawyers has over 20 years' taxation & conveyancing experience at your service. We offer a wide range of 50 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 © 2023. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
3rd of January 2023

We offer several services when it comes to renting out property in Spain. It never ceases to amaze me when a client hires us and lets us know the estate agency they are dealing with is in fact charging them (the tenant) a hefty commission for the rental of a property whose landlord is a company. 

By law, since March 2019, estate agents can only charge landlords for any rental commission, never the tenant. It is often I find out that agencies are charging thousands of euros, from both the landlord and the tenant (!), when it is unlawful.

If you are a tenant, you are under no legal obligation to pay an estate agency for their commission on properties let out by legal persons. Only this tip saves our clients thousands of euros every year.  

Rental-related services offered by LNA:

• Rentals (contract drafting)
• Contracts (read & review)
• Recorded delivery service
• Keys handover contract

At Larrain Nesbitt Abogados we have over 20 years’ experience buying, selling, and renting properties. We are also specialized in taxation, immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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

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.

2.023 © Raymundo Larraín Nesbitt. All Rights Reserved.

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 9th of January 2023.

                                                                            ---

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

El despacho permanecerá ahora cerrado por vacaciones y nos reincorporaremos el lunes 9 de enero 2023.

The clock is ticking. If you are non-resident, and you own property in Spain, this is your last chance to file your Non-Resident Imputed Income Tax for year 2021. Even if you do not rent it out, you need to file this end-of-year tax. We file taxes online all over Spain.

Marbella-based Larrain Nesbitt Abogados has over 19 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 © 2022. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer – Abogado
12^th of December 2022

The end of 2022 fast approaches.

One of our last blog posts for this year, is a gentle tax reminder.

All non-residents, who own property in Spain, need to file by the end of this year a tax called Non-Resident Imputed Income Tax (NRIIT, for short), even if you do not rent out your Spanish property. You are taxed on the previous year (2021).

We offer the following taxation service for a flat fee of 100 euros plus VAT/year.

We file your tax online within 24 hours.

Our last day to file this tax in 2022 is Friday the 16^th of December.

We offer the most competitive fees in the market.

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

We are specialized in taxation

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

Larraín Nesbitt Lawyers is a law firm specialized in taxation, conveyance, immigration & residency, 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.

Legal & tax services available from Larraín Nesbitt Abogados (LNA):

• Non-Resident Income Tax (Fiscal Representation) 
• Holiday Rental Accounting Service (HRAS) 
• Registration of Holiday Homes (Andalusia)
• Spanish Inheritance Tax (IHT)
• Spanish Inheritance Tax Assessment Report (SITAR)
• Wealth Tax
• Spanish Resident Income Tax (IRPF)
• Tax form 720

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.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

Marbella-based Larraín Nesbitt Lawyers has over 19 years' taxation & conveyancing experience at your service. We offer a wide range of 50 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 © 2022. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
1st of December 2022

As most buyers will have experienced, offplan property in Spain has appreciated by two digits nationwide over the las years. This is good, no? Let’s take a closer look at this and see what’s under the hood. We are going to compare it to 2008 to have a wider perspective of what is really going on.

2008

2008 marked the high point of Spain’s property bubble. Over 750,000 properties were being built a year and property prices were rising by 15 to 20%.

2022

In 2022 offplan property is appreciating on average by 10%, and in coastal areas by 20% a year. 150,000 properties are being built a year.

A closer look

Both figures look almost similar to what is going on in today’s market, yes? Actually, no.  

The key difference is that in 2008 properties appreciated greatly driven by high demand. This pushed asking prices forward. I personally witnessed how investors were buying properties by twos and threes. It was simply a crazy speculative market fuelled by ultra-low interest rates.

Whereas in 2022 the increase in offplan prices are driven by high inflation, not by demand. The Covid-19 pandemic, and all its strains, have created serious disruptions in the global supply chain. Aluminium and other construction materials imported from China, and which are required by the offplan industry, are now taking much longer to arrive to Spain and have also greatly appreciated in price. Developers are forced to pass on this cost increase to buyers, which translates into higher asking prices. Meaning developers themselves are having to increase the sale price of their units every year only to break even because of the inflation spike (bubble) in construction materials.

Conclusion

To close, note that in 2022 FIVE times less offplan units are being built than in 2008 (150k vs 750k).

So, clearly the reasons underlying the huge spike in offplan asking prices are due to very different reasons.   

At Larrain Nesbitt Abogados we have over 19 years’ experience buying, selling, and renting properties. We are also specialized in taxation, immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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

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.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.