Spanish Golden Visa for British investors after Brexit

Raymundo Larraín Nesbitt, January, 21. 2021

Solicitor Raymond Nesbitt gives us an overview of the advantages offered by Spain’s Golden Visa scheme to UK nationals.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 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.

Article copyrighted © 2013, 2017, 2018, 2019, and 2021. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
21st of February 2021 

Introduction

The Spanish Golden Visa has become the gateway to Europe for thousands of applicants pursuing the European dream. They have collectively invested over 2 billion euros since its inception in 2013. Although Spain’s visa programme was initially a flop, as it fell well below expectations, and was marred with teething issues, an ambitious overhaul in 2015 made it extremely competitive compared with similar schemes offered by fellow EU countries. So much so, that this massive tweak enabled Spain to confidently overtake Portugal, becoming Europe´s leading Golden Visa supplier.

Although this procedure was originally devised to cater to affluent Russian, Chinese, and Iranian nationals, in a post-Brexit world, UK nationals now have a golden opportunity (excuse the pun) to benefit from the wide array of advantages offered by Spain’s Golden Visa scheme. 

With the European Union’s Parliament official confirmation from last week that it will ratify belatedly the Withdrawal Agreement in February 2021, Brexit is now truly done and dusted. This opens the doors for Britons to apply for a GV application. Although Brexit has been a protracted procedure, as a positive note, it has allowed the prospect of Golden Visas for British nationals.

UK nationals may now enjoy - for the first time ever - the slew of advantages that were until now reserved only to a select minority of wealthy non-EUs. The main advantage is that it allows British nationals - that lack a EU passport - to enter and move visa-free through the Schengen Area, skipping pesky passport controls on an equal footing to EU nationals. Much like before the UK voted to break away from the Union.

If you fancy an in-depth take into this subject, you can take a peek at our 2013 article: Investor Guide to Spain’s Golden Visa Law

Spain’s Golden Visa programme allows affluent non-EU applicants, and their dependants, unfettered access across Europe´s Schengen Area. Travel unmolested through all of Europe.

A Golden Visa enables you, and your family, to live and work in Spain (Europe). This visa guarantees Spanish residency, which eventually leads to Spanish citizenship (optional). Live the dream, apply now!

Thousands of non-EU nationals have already secured their families’ future and well-being on benefiting from this special arrangement that rolls out the red carpet cutting through all the red tape. Spain’s Golden Visa is a success story, be a part of it!

At Larrain Nesbitt Abogados, we have assisted hundreds of investors, and their families, to attain a GV since its inception in 2013. We can put you in touch with the most reputable real estate agencies across Spain to make your dreams come true. Apply for the keys to your Golden Visa through Larraín Nesbitt Abogados: Golden Visa Service. Your family’s success is only one call away: (+34) 952 19 22 88.

 

Golden Visa Advantages

  • Fast-tracked. This law is specifically devised to attract affluent non-EU investors and helps to cut through the admin red tape greatly streamlining the visa procedure.
  • Travel Europe visa-free. You can travel without a visa for 90 days out of every 180 days within the Schengen Area.
  • Clear rules. Two years (Residency Permit), renewable for a further 5 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 tax resident or actually live in Spain.
  • Family included. You may get additional permits for your spouse and children under 18 years (or disabled and dependant children over 18). Same-sex partners inclusive. Dependant parents of applicant are now also included (extended family).
  • You may work in Spain.
  • 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 Europe, in company of your partner, whilst you work and earn money abroad.
  • Return on investment. Take advantage of Spain´s burgeoning real estate recovery.

 

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 private medical insurance.
  • 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:

  1. Invest at least €500,000 in Spanish real estate property.
  2. Invest at least €2,000,000 in Spanish Treasury Bonds.
  3. Invest at least €1,000,000 in shares of Spanish companies.
  4. Deposit at least €1,000,000 in Spanish bank accounts.
  5. A ‘major’ business investment which fulfils at least one of the following three criteria:
  • Meaningful job creation as a direct result of the investment.
  • Significant socioeconomic impact in the geographical location where the activity will be carried out.
  • Technological or scientific impact.

Why choose Europe?

  • Democracy. Europe, cradle of democracy, hosts some of the world’s oldest and most solid. A clear and stable legal and tax framework allows freedom, nurtures ingenuity, and upholds (property) rights for businesspeople. This concocts the ideal breeding ground to foster business investments, and develop an entrepreneurial skill set.
  • Education. Europe is home to some of the world’s most respected academic institutions. Secure a bright future for your children allowing them to earn their spurs in life through a meritocratic top-notch education.
  • Culture. Europe is a crucible of cultures, a conflux that laces Western and Eastern influences, offering a rich tapestry of history and arts that shaped the world as we know it. Spain’s vast cultural heritage, spanning millennia, is a legacy of commingled cultures that attracts over 84 million tourists every year leaving an indelible mark upon its visitors.
  • Languages. Seize the opportunity to master and command some of the world’s most influential languages: English (business & finance), French (arts & diplomacy), German (industry & science), Spanish (literature & poetry).
  • Healthcare. Europe, and Spain in particular, are at the forefront in modern medical facilities.
  • Modern transport. Spain offers top-tier transport services including state-of-the-art high-speed rails connecting you with Europe’s major capitals.

 

Frequently asked questions

 


   1. Can I request a mortgage on investing €500,000 in Spanish real estate?

Only on the excess above €500,000. The law requires that the first €500,000 is unencumbered – meaning the equity threshold must be free. The excess can indeed be financed through a mortgage loan if necessary. Notwithstanding the above, you may also finance the 500k using a lender, as long as he is located outside of the Union, although this may prove challenging in practice.

   2. I have read that I need to spend over six months in Spain to qualify for residency. Is this true?

No. A GV neatly overrides this requirement. This law specifically targets affluent individuals who will normally be residing and working elsewhere. That doesn’t preclude the investor’s spouse and children from living and studying (or even working) in Spain (Europe). In other words, you are free to come and go as you please without needing to stay in Spain a minimum period of time every year.

   3. I don’t fancy paying taxes in Spain, I already pay enough in my home country. Will I become a Spanish tax resident if I apply for a GV?

No, you won’t. A GV application is unrelated to your tax residency. Only if you spend more than 183 days a year in Spanish territory would you become a Spanish tax resident. Ideal for those who want their families to enjoy a European lifestyle whilst the main investor commutes to work in other countries and has his/her main business outside of Europe.

   4. How long does it take to attain a GV application?

Under two months, on average.

   5. Can I work in Spain?

Yes. Following a change in the GV law in 2015, the main investor may now work in Spain.

   6. Can I make use of the public healthcare system?

No. This blue-ribbon visa targets wealthy non-residents who must hire their own private insurance. We can also assist you with this: Hiring private health insurance.

   7. Does a GV include also the investor’s family?

Yes, even extended family. The term ‘family’ must be understood broadly. A married couple and their children under 18 are included under the same application as a family unit. Same-sex partners qualify as a married couple. In some cases, children over 18 y.o. are also included as long as they are financially dependent. Also, dependant parents, even if under 65 y.o.

   8. How long does the Golden Visa last for?

Two years, and you may renew it for a further 5 years.

   9. Do holders of the so-called Golden Visa have unrestricted access to move within the European Union?

In a nutshell, yes. Holders of a Spanish Golden Visa do not require a visa to enter Europe’s Schengen Area. They can transit and enjoy free movement within the Schengen Area visa-free for a maximum period of three months (90 days) in every rolling six-month period from the date of first entry. You will have unfettered access to move within the Union.

  10. Can I invest in real estate through a company?

Yes, but certain criteria apply to qualify - talk to us. The bottom line is that you can indeed buy real estate through companies and still qualify to attain a GV in Spain.

Interested? Come and speak to Larraín Nesbitt Abogados friendly staff who will be pleased to guide you through Spain’s Golden Visa programme. Your family’s success is only one call away: (+34) 952 19 22 88.
 

Golden Visa Service *

*includes one family unit

 

“Democracy owes its existence to Christianity.” – Robert Schuman

Jean-Baptiste Nicolas Robert Schuman (1886 – 1963). Was a French statesman. Schuman was a Christian Democrat (Popular Republican Movement) political thinker and activist. Twice Prime Minister of France, a reformist Minister of Finance and a Foreign Minister, he was instrumental in building postwar European and trans-Atlantic institutions and was one of eleven Founding Fathers of the European Union, the Council of Europe, and NATO.

In fact, all Founding Fathers of the Union were Christian, which explains the thoughtful choice of Rome - Christianity's bedrock - to sign in 1957 the EEC’s foundational treaty, a forerunner of what in time would be known to us as the European Union, or Union. I’m guessing Pericles would like to have a word or two on this quote.

LNA has a 100% track record attaining Spanish residency

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

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, residency, inheritance, taxation and litigation. You can contact us by e-mail at info@larrainnesbitt.com, by completing our contact form or by telephone on (+34) 952 19 22 88.

Residency services available from LNA:

 

Golden Visa related articles

 

Article originally published at Spanish Property Insight: Spanish Golden Visa for British investors after Brexit

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. VOV.

2.013, 2.017, 2.018, 2.019, and 2.021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Modelo 720 – Tax form 720

Raymundo Larraín Nesbitt, January, 1. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 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.

Article copyrighted © 2020, 2021 Plagiarism will be criminally prosecuted.

Inset photo: courtesy of Self Bank

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of January 2021

In 2013 the Spanish Tax Office implemented a new tax obligation whereby all tax residents in Spain, who hold over €50,000 in assets abroad, need to complete this tax return before end of March 2021 deadline.

By 2018, over 5,000 taxpayers had already been (heavily) fined on failing to disclose they held substantial assets abroad. This figure continues to increase year on year. We stress the fines for non-compliance are the steepest we’ve ever seen. In fact, so much so, they have been challenged at Brussels. The infamous modelo 720, despite being the object of heated controversy, remains very much an active tax obligation with which taxpayers must contend with. If you fall within its scope, I strongly advise you to comply or else face the risk of stiff fines.

It should be stated this tax form is only for reporting purposes; you do NOT pay any tax on submitting it. Resident taxpayers already pay income tax on submitting their annual I.R.P.F. tax returns once a year.

You also have Mark’s pungent article explaining it which, unlike mine, doesn’t pull any punches.

I have structured my article as a FAQ for ease of comprehension.

Who needs to declare?

All Spanish tax residents who own assets overseas on or over €50,000.

Again, and for the avoidance of doubt, if you are non-resident in Spain you do NOT need to submit this tax return; it is only for residents.

Who is considered tax resident in Spain?

The Spanish Tax Office applies – amongst many others – the following broad criteria:

  • You spend more than 183 days within a calendar year in Spanish territory.
  • Your centre of financial interests is located in Spain.
  • Your spouse and/or underage children live in Spain.

Reporting categories

There are three reporting categories: bank accounts, investments and immovable property.

Obligation to report

You must report all assets in a particular category if the value of your total assets within it exceeds €50,000.

2021 tax submission period

From the 1st of January until the 31st of March 2021.

Can I file it after the submission period?

Yes, but hefty penalties apply. Ask us.

If you have already filed tax form 720 in the past

You only need to file it again if:

  • The value of an existing asset grew by more than €20,000, or
  • You sold an asset, or
  • You obtained a new asset.

Penalties for non-compliance

The disproportionate fines levied are (very) stiff.

  • Failing to file 720 or filing it incorrectly: €5,000 per infraction.
  • Minimum fine of €10,000 for each group of assets.
  • Penalty of 150% on unpaid income tax.

The Common Reporting Standard and you

Please take good note that with the advent of the Common Reporting Standard (CRS), signed by over 100 countries to combat tax evasion, as from the 1st of January 2018, the Spanish Tax Office is being spoon-fed fiscal information by your home tax office.

For example, both HM Revenue & Customs and Ireland’s Revenue Commissioners are busy supplying the Spanish Tax Office with detailed information (and vice versa) on all your overseas assets and reported income derived abroad as from the 1st of January 2018.

In plain English, your home country’s tax office will likely have already informed the Spanish Tax Office of the assets you hold abroad. It is in your best interests to be pro-active and come clean before you are served with a legal notice imposing humongous fines on you; as it’s happened already to over 6,000 unsuspecting taxpayers. The tax office likes waiting till the last moment before imposing fines to rake in as much interests as is legally admissible before the statute of limitations kicks in. Fines on non-compliance start at five figures and often are six-figures, or higher.

Brexit and attaining Spanish residency

Scores of UK nationals applied for a Spanish residency permit in the run up to Brexit. Unbeknownst to them, many will be now regarded as tax residents in Spain. Any UK national who is tax resident, and holds over 50,000 euros in assets abroad, must file tax form 720.

If you want peace of mind, you should sort out your tax affairs and submit this tax return to avoid humongous fines.

The last word

We strongly advise you to submit tax form 720 if you are (tax) resident in Spain to avoid steep penalties. If you plan to submit it, please contact us well ahead of the submission deadline (31st of March 2021) as it takes days to prepare and process. If you are unsure if you qualify for it, just give us a buzz and one of our friendly staff will answer your queries to allay your fears.

Si vis pacem, para bellum.” Vegetius

Loosely translated as: “If you want peace, prepare for war.”

Publius Flavius Vegetius Renatus (4th Century A.D.). Writer of the Later Roman Empire. Nothing is known of his life or station beyond what is contained in his two surviving works: Epitoma rei militaris (also referred to as De re militari), and the lesser-known Digesta Artis Mulomedicinae, a guide to veterinary medicine. The quote comes from his military tract. It mainly focuses on military organization (legion) and how to react to certain occasions in war.

Larraín Nesbitt Lawyer’s taxation service:

Tax form 720

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 to book an appointment.

Related tax articles

 

Article also published at Spanish Property Insight:  Modelo 720 Tax form 720

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. VOV.

2.018, 2.019, 2.020, and 2.021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Do you need an updated NIE certificate to sell property in Spain?

Raymundo Larraín Nesbitt, December, 1. 2020

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 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.

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

 

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of December 2020

We published several years ago (in eight languages) a detailed article explaining what a NIE number is and how to go about getting one. A NIE number is assigned by the national police and is yours for the remainder of your lifetime, it never changes. Many years ago, Spanish police issued them as an A4 sized certificate that had a three-month expiry date printed on them. Modern-issued NIE numbers no longer show ‘expiry’ dates.

At times notaries, on selling, demand a seller procures a new updated NIE number certificate. This is because they have seen the 3-month expiry date is (long) overdue and are asking for a ‘new’ updated copy. In truth, the ‘new’ certificate will bear exactly the same number and details as the former, the only difference is that there will not be any expiry date on it.

Imagine sitting the morning of completion at a notary’s office, surrounded by a group of anxious strangers, and feeling a knot at the pit of your stomach when the notary officer informs you the sale has fallen through because your NIE number is not accepted by the notary! Now imagine millions of euros are at stake. It can well happen. The sale needs to be postponed or else change over to another notary (not always possible when mortgage loans are involved, as is often the case).

Then again, some notaries, who are not prone to nit-picking, will have no qualms accepting an ‘expired’ NIE number certificate. They will find it completely unnecessary to re-apply for a new copy and are more than happy to accept an old one which shows a 3-month expiry date.

The problem is that sellers cannot pick the notary witnessing a sales deed. This is a right that belongs only to buyers, who are legally entitled to pick whichever notary pleases them most. One of the many disadvantages this poses to sellers, is that they are unable to know beforehand - often until it is too late in the day - which notary will be the one selected by the buyer. Meaning they cannot know if the selected notary will demand they update their old NIE number certificate, or not, on selling.

This can be easily pre-empted by your appointed conveyance lawyer on including a clause in the POA to attain a duplicate NIE number should the need arise on selling. Bottom line, in practice it’s a bit akin to playing Russian roulette; a seller cannot know for sure if the chosen notary will demand an updated NIE certificate, or not. It is the duty of your conveyance lawyer to plan ahead for this eventuality and overcome any unforeseen obstacle.

Politicians were mostly people who'd had too little morals and ethics to stay lawyers.” George R.R. Martin

George Raymond Richard Martin (1948). Is an American novelist and short-story writer in the fantasy, horror, and science fiction genres. He is best known for his international bestselling series of epic fantasy novels, A Song of Ice and Fire, which was later adapted into the HBO dramatic series Game of Thrones.

 

At Larrain Nesbitt Abogados we have over 17 years’ experience assisting clients buying & selling property in Spain and dealing with its taxation.

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

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, taxation, 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 to book an appointment.

Legal services available from Larraín Nesbitt Abogados

Selling-related articles

 

Article originally published at Spanish Property Insight (SPI): Do you need an updated NIE certificate to sell property in Spain?

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 on websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. No dragons, Lannisters or self-serving politicians were harmed on writing this article. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

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6 advantages of a Spanish residency permit

Raymundo Larraín Nesbitt, October, 26. 2020

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 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.

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

 

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of November 2020

The United Kingdom officially left the Union on the 31st January 2020, and the Brexit transition period ends on the 31st December 2020.

Following up on last month's article (Spanish residency permit: Time is running out!), we are now on the run up to the last days for British nationals to benefit from all the advantages the transition period has to offer on applying for Spanish residency. We strongly advise all UK nationals to apply for a residency permit now, before the end of the year, if you can. As from 2021, the application requirements will be far more challenging, and many will no longer qualify.

To complicate matters further, at the time of publishing this immigration article, it would seem the UK Authorities are heading for a no-deal Brexit which would pile even more pressure to get this done and out of the way whilst you can. From the Spanish side, Immigration Authorities have tightened up the requirements in a new change from November which now requires applicants to categorically prove their habitual residency is in Spain. This is the second major change in 2020, besides the one we already reported in July 2020.

Please note that because the United Kingdom has been a member state of the Union over the last 47 years we take many rights for granted; but these rights will no longer be available as from 2021 for all those who have not landed a residency permit, so please do not take them for granted and be proactive, for your own sake.

Besides the six reasons we collate below, there are also tax advantages: Tax advantages on becoming resident in Spain – 8th March 2018.

Apply for Spanish residency now and ensure you secure your EU rights as a national of a member state of the Union before it’s too late.

 

Six advantages of a Spanish residency permit

 

  1. Freedom to move within the Schengen Area

With a Spanish residency permit you are granted unfettered access across the Schengen Area. Avoid pesky passport controls, avoid multiple visa applications, avoid long queues. A residency permit allows you visa-free access to all 26 Schengen countries.

  1. Right to live in Spain (Europe)

Again, most UK nationals take this for granted, but in a post-Brexit world this will be far more challenging. A Residency permit legally allows you to remain within the Union territory unmolested and go about your life. Illegal aliens, who do not have a valid residency permit, and overstay the 90-day period, may be subject of deportation to their home countries.

  1. Right to work

A residency permit allows you to seek a job normally. Employers in Spain, going forward, are going to be asking job seekers to prove they are in Spain legally to avoid large fines on hiring illegal immigrants.

  1. Right to study

A residency permit allows students to live and study in Spain (Europe).

  1. Right to vote

Have your say on local elections, vote for a mayor to improve things in your town.

  1. Right to public healthcare (S1)

After you attain a Spanish residency permit, UK pensioners may apply for a full transfer of their accrued UK healthcare rights over to Spain using the S1 procedure. For as long as you remain in Spain, you may use the Spanish healthcare system in equal rights to any native. We offer this service for a flat fee:  Transfer of healthcare rights (S1 - Social Security Homologation).

In conclusion

Any EU national living in Spain for more than 90 consecutive days must apply for a Spanish residency permit, by law.

Please note that you may remain lawfully, within Spanish territory, a maximum of up to 90 days within every rolling six-month period within a calendar year.

As the Brexit transition period draws to an end, it is important UK nationals attain a Spanish residency permit taking advantage of the lenient conditions currently in existence while they last.

You should be advised that attaining a Spanish residency permit is taking (in Malaga) several weeks, so please plan ahead accordingly. What matters is that you file for it before the 31-12-2020 deadline.

Please, for your own sake, don’t sleep on this as the clock is ticking.

For updated information on all residency matters, please browse UK Gov Living in Spain Guidance.

 

"I met my wife through playing golf. She is French and couldn't speak English and I couldn't speak French, so there was little chance of us getting involved in any boring conversations - that's why we got married really quickly." – Sean Connery

Sir Thomas Sean Connery (1930 – 2020). Was born in my beloved Edinburgh. Before pursuing a career in acting, he worked on several jobs such as milkman, Royal Navy sailor, lorry driver, footballer, bodybuilder, lifeguard, labourer, coffin polisher, artist’s model, and part-time babysitter (sic). At age 27 he would start his career as an actor which would bring him world-recognition as one of the best actors of his generation. His seminal role in the first James Bond movie would bring him much praise and years on he would be widely regarded as the best actor to play the incorrigible Bond. Other major roles he played were Marnie (1964), The Man Who Would Be King (1975), A Bridge Too Far (1977), Highlander (1986), The Name of the Rose (1986), The Untouchables (1987), Indiana Jones and the Last Crusade (1989), The Hunt for Red October (1990), Dragonheart (1996), The Rock (1996). He officially retired from acting in 2006, though he briefly returned for some voice acting roles in 2012. I came across him several times when I was younger at Aloha Golf in Marbella, where he lived for several decades with his second wife until they left for the Bahamas. A proud Scotsman, he swore he would never return to live in his native Scotland unless they attained political independence. True to his word, he would die abroad never seeing his dream come to fruition. He proudly sported a tattoo: “Scotland Forever.”

 

LNA has a 100% track record attaining Spanish residency

 

At LNA we assist UK nationals to apply for Spanish residency for the first time, or renewals, for a very competitive fee. You will be assigned an in-house specialist to deal with your matter. Call or e-mail us free of compromise.

Please note we only deal with residency permits on the Costa del Sol (Malaga province).

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

Larraín Nesbitt Abogados is a law firm specialized in residency, 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.

 

Immigration & Residency services available from LNA

 

 Residency-related articles

 

Article also published at Spanish Property Insight: Six advantages of a Spanish residency permit

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. No delusional secessionist politician was harmed on writing this article. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

Spanish residency permit: Time is running out!

Raymundo Larraín Nesbitt, October, 5. 2020

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 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.

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

 

 

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of October 2020

The United Kingdom officially left the Union on the 31st January 2020, after both Westminster and the European Parliament ratified the Withdrawal Agreement. Within the WA it was agreed a Brexit transition period that would last until the 31st of December 2020. By this year’s end the United Kingdom, after 47 years, will no longer be a Member State of the Union.

This will have a major impact in several fields. In this article, I will only focus on immigration. As from the 01/01/2021 the requirements that UK applicants must meet will become far more stringent, as they will now be officially regarded as nationals of a third country, non-EUs.

In plain English, the requirements a UK national must meet going forward, as from 2021, will be far more challenging, to the point many will no longer qualify. Unsurprisingly at this point, the exact requirements are still unknown as they must still be penned by the Authorities, but it is within reason to think they will be very similar, if not identical, to those being asked from non-EU nationals at present.

The gist of this short article is to drive home the point that all UK nationals, who are of the mind of attaining a Spanish residency permit at some point in the future, should do so now taking advantage of the lenient Brexit transition period.

5 reasons to be pro-active and act now!

 

  1. All those who register before year’s end, will safeguard their rights as EU nationals for as long as they remain resident in Spain. It is important that any UK national who is currently living in Spain, but still remains unregistered, applies for residency to safeguard his EU rights.
  2. For the time being, and until this year’s end, you are (still) being treated as a fellow EU national, meaning all procedures are (greatly) streamlined for your own convenience. Without esoterics, they roll out the red carpet for you removing the red tape.
  3. During the Brexit transition period, the requirements for residency are very reasonable and within grasp of most, if not all, applicants. However, as of 2021 these requirements will change (drastically) as you will no longer be regarded as a EU national, and may prove draconian to some applicants who will be shut out.
  4. If you are a UK-based landlord, actively leasing holiday rental accommodations in Spain as a buy-to-let business, you may wish to consider the option of applying for residency in Spain. The reason is that it would allow you to still benefit from the lenient tax advantages open to all EU residents: a lower tax rate (19%) and the ability to offset any and ALL property-related expenses, which on average reduces a landlord’s tax bill by 70%, or more. Post-Brexit, the tax rate will be a flat 24% on gross rental earnings without being able to apply for ANY landlord tax relief. This fiscal change will translate into some businesses no longer being financially viable post-Brexit. More on this in our tax article: Post-Brexit Taxation in Spain. Please seek professional advice from us on this point, as it implies becoming tax resident in Spain; meaning you would pay tax in Spain on your worldwide income.
  5. Our fees to process residency permit applications are very competitive whilst you are still a EU national, but as from next year, when you are no longer regarded as a EU national, they will be in line with our other Immigation & Residency services for non-EU clients (higher). The reason is because our workload is significantly increased for all non-EU applications.

 

Green cards

For all those UK nationals who had already secured a green card in the past (green A4 certificate or credit card-sized piece of paper), this certificate will remain valid proof of residence and rights under the Withdrawal Agreement after 31 December 2020 for those registered in Spain before the 6th of July 2020. In other words, you are under no legal obligation to exchange it for the new TIE card, or so goes the theory.

However, in practice, we strongly advise you exchange your old green card over to the new TIE card, which supersedes it. Besides being more durable, the main reason is that citizens in Spain now deal with Public Administrations telematically, that is online. Spanish IDs and the new TIE cards are very similar, as they both have in-built chipsets that allow you to deal online with the different public administrations (i.e. booking an appointment online) which saves you considerable time and aggravation. Unless you rather fancy spending several mornings queuing up for nothing, or making umpteen calls that will all go unanswered. Please read this local newspaper article to understand where I’m getting at: Dealing with the authorities in the new normal has become a red tape nightmare.

Moreover, even public servants are redirecting citizens to take their business online as it (greatly) simplifies admin procedures. Although this may seem trivial, when you find yourself in the need to urgently book a medical appointment for health care reasons, you will remember this piece of advice. Embrace the digital age and let go of the old ways. So less ‘mañana, mañana’ and be pro-active about it for your own good. Ignore my advice at your own chagrin.

If you want to avoid yourself much aggravation in the future, please follow my advice, and exchange your old green card for the new TIE card. This is accomplished only within a few weeks and for a very low fee.

Registering for Spanish residency after the 06-07-2020

Spanish Immigration Authorities unexpectedly overhauled the residency procedure, without giving notice, in early July this year, causing a bit of a commotion as we reported at the time. All UK nationals applying for residency after the 6th of July 2020 must attain a biometric residency card known as Foreign Identification Card (or TIE, in Spanish). It will state it has been issued to the holder under the terms of the Withdrawal Agreement.

Deadline to apply for Spanish residency

The deadline to register with the Spanish Immigration Authorities as resident, and benefit from the array of rights under the Brexit Withdrawal Agreement, ends on the 31st December 2020. Residency applications are electronically tagged, so what matters is to apply before year’s end, even if the decision on your matter is taken by Spanish Immigration Authorities on the following year.

For argument’s sake, if you file your application on the last day of the deadline, on New Year’s Eve, even if the Immigration Authorities decide upon your file on the 21st February of 2021, you would still be granted a residency permit under the terms of the Withdrawal Agreement, that is safeguarding your EU rights.  Obviously, this is just an example; plan ahead, and don’t wait until the eleventh hour to file your residency application.

EU Rights after the 31st December 2020

The Withdrawal Agreement sets out the terms of the UK’s withdrawal from the Union and provides for a deal on citizens’ rights. It sets out a transition period which lasts until 31 December 2020. During this time you can continue to live, work and study in the EU broadly as you did before 31 January 2020.

If you are resident in Spain at the end of the transition period, you will be covered by the Withdrawal Agreement, and your rights will be protected for as long as you remain resident in Spain.

Does attaining a Spanish residency permit make you a tax resident in Spain?

This is a tricky one, and I have to reply, ‘no and yes’.

No, because registering for admin residency is independent of tax residency which is altogether a different legal concept.

And yes, because as its own name implies, residency by its very own nature entails you will remain in Spain for a long period of time, normally exceeding the 183-day rule our Tax Office cherishes so much. If you spend 184 days, or more, in Spanish territory you automatically become tax resident.

I know, clear as mud, but life is full of grey areas. More details in our blog post:  Dual residency and hogwash.

In conclusion

Any EU national living in Spain for more than 90 consecutive days must apply for a Spanish residency permit, by law.

Please note that you may remain lawfully, within Spanish territory, a maximum of up to 90 days within every rolling six-month period within a calendar year.

As the Brexit transition period draws to an end, it is important UK nationals attain a Spanish residency permit taking advantage of the lenient conditions currently in existence while they last.

You should be advised that attaining a Spanish residency permit is taking (in Malaga) several weeks, so please plan ahead accordingly. What matters is that you file for it before the 31-12-2020 deadline.

Please, for your own sake, don’t sleep on this as the clock is ticking.

For updated information on all residency matters, please browse UK Gov Living in Spain Guidance.

 

Life isn’t black and white. It’s a million gray areas, don’t you agree?” – Ridley Scott

Sir Ridley Scott (1937). Eminent English filmmaker and producer who doesn’t really need an introduction. He is best known for directing such ground-breaking science fiction classics as Alien (1979), the indelible Blade Runner (1982) which, even by today’s standards, remains way ahead of its time and boasts one of the most beautiful and bewitching orchestral scores in history (Vangelis), Legend (1985), Thelma & Louise (1991), 1492: Conquest of Paradise (1992), Gladiator (2000), Black Hawk Down (2001), Kingdom of Heaven (2005) and the Martian (2015). And although Ridley doesn’t believe in God, God believes in him.

 

LNA has a 100% track record attaining Spanish residency

 

At LNA we assist UK nationals to apply for Spanish residency for the first time, or renewals, for a very competitive fee. You will be assigned an in-house specialist to deal with your matter. Call or e-mail us free of compromise.

Please note we only deal with residency permits on the Costa del Sol (Malaga province).

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

Larraín Nesbitt Abogados is a law firm specialized in residency, 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.

 

Immigration & Residency services available from LNA

 

 Residency-related articles

 

Article originally published at Spanish Property Insight: Spanish residency permit: Time is running out!

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. No delusional secessionist politician was harmed on writing this article. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

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10 tips when money is tight in Spain

Raymundo Larraín Nesbitt, August, 21. 2020

Are you struggling with money issues in Spain? Do you find yourself being short of cash every month? Solicitor Raymundo Larraín gives us ten tips to cope when the going gets tough. Interested? Read on.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 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.

Article copyrighted © 2011, and 2020. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of September 2020

 

Introduction

As I’ve been hammering over the last four months, the advent of the Covid-19 outbreak has brought upon the country a financial hardship unseen in over 84 years, since the fratricidal Spanish Civil War. Spain’s economy is one of the worst hit in the world, and as I contend in this article, the underlying reason for this is it’s unhealthy overreliance on tourism.

A reflection of this devastating blow is Spain’s high unemployment rate, which ‘officially’ stands at 15.6%, but in practice could easily double this amount if you factor in the 4.7 mn unemployed who haven’t worked over the last 7 months as they are under ERTEs (‘temporary’ paid leave). In Spain, ‘temporary’ is code for permanent.

Politicians have cozily relied for decades on the tourism & hospitality industry - Spain’s golden goose - which pulls in over 200 billion euros every year. An industry ingeniously set up in the 60’s by General Franco in tandem with his brilliant Tourism Minister, Mr. Manuel Fraga Iribarne. Embarrassingly, six decades on, tourism is an anomaly that accounts directly for over 12% of Spain’s GDP, by far the number one contributor, and indirectly by at least a further six points, or more. No modern economy should have almost 1/5 of its GDP contingent on any one activity as this entails huge risks, such as the ones we are now witnessing. This overarching influence must be tempered. Moreover, out of all the countries that make the OECD, Spain is hands down the most reliant on tourism.

Successive generations of politicians have systematically failed to address the elephant in the room, with their attention all-consumed in petty domestic power struggles. Spanish politicians are obsessively engrossed by the country’s past and devote little energy to the nation’s future. They should have diversified the Spanish economy long ago to make it competitive, so we are not over-reliant on tourism. This is a gross dereliction of duty that needs to be addressed to bring balance to our economy. Covid-19 has been like the tide receding revealing the ugly weakness of the Spanish economy; the naked truth is that the Spanish economy has a crippling dependence on tourism. Before the virus took us by storm, Spain was the second largest tourist destination in the world, with 84 million tourists visiting us every year, trailing only behind France. If you take the U.S. as an example, which ranks number three in the world as a tourist destination, tourism only accounts for 2.7% of the U.S.’s economy. Compare this to Spain, which is almost seven times more! It’s ludicrous.

Social distancing has killed one of our major strengths and has thrown the economy into disarray, more so than in any other developed country in the world, precisely because of this overreliance which has now proved to be Spain’s Achilles’ heel. Although Spanish politicians are always quick to blame one another, it is what it is; they are all to blame. Our political class lost long ago the golden opportunity to devise a consensual grand long term strategy to modernize and diversify the Spanish economy, with education standing at its forefront, making it stronger and more resilient to any backlash, including global virus outbreaks. Because of their neglect, young generations and even our elders, will now suffer greatly from the laid back attitude of our irresponsible political class which now shamefully relies on European handouts.

I’m of the opinion that any financial help from the Union should be closely monitored to the last euro-cent, to ensure taxpayer’s money is wisely spent on whatever our socio-communist authorities actually claim it is being spent on.

With all this in mind, I have been publishing a series of articles, since May, to hopefully help ease the pain for the expat community based in Spain. This article rounds up the different strategies laid out in previous articles to mitigate the challenging financial ordeal we are now up against.

 

Ten tips for struggling families

 

  1. Fraction your payment of local taxes. Because of the Covid-19 outbreak, many families' finances are underwater. Regional tax offices now allow struggling owners to spread out payment over long periods of time, accepting to settle it in instalments. Contact us for more information on this tax service.
  2. Request your landlord a rental reduction. Particularly in commercial premises, tenants are asking more and more for payment facilities or reductions in monthly payments. Landlords often would rather come to an understanding with a good tenant than let them go and see the whole place boarded up for years.
  3. Swap your mortgage loan to interest-only (“carencia”). Lenders are open to renegotiate the mortgage terms to avoid you defaulting on a loan. Don’t be afraid to pick the phone and speak to them. This can be arranged whilst the property is put up for sale or just to weather off the storm meanwhile. Spanish lenders will gran it for a year or two at most.
  4. Extend mortgage repayments an additional number of years. The last thing Spanish lenders want now is for you to default on your mortgage loan. They are being very accommodating and open to renegotiating with borrowers the payment terms, extending them. The drawback is that on doing so the amount of interests you pay are rolled up. The drawback is that on the long run this means you will end up paying far more to gain some breathing room at present. It’s really an option only for those left with no other really. The Government is now allowing this change free of charge to struggling mortgage borrowers providing they are resident, and the property is their main home (permanent abode). Borrowers will not pay for Notary or Land Registry fees on following it.
  5. Lifetime loan. Is a special type of home equity loan available only to senior residents. It allows owners to release equity from their homes converting it into cash by way of placing a charge against their property (which acts as collateral). The loan does not have to be repaid during the homeowner’s lifetime. More on this in our article: Lifetime loans explained – 8th August 2020.
  6. Sell the property as a distressed asset (fire sale).If you have already run through the numbers, and you are convinced that you will no longer be able to service your mortgage, rather than defaulting and being repossessed, you should seriously consider selling the property as a distressed asset. The catch again is that the property should not be in negative equity. The more it is, the least likelihood there will be anyone interested in it as they in turn are regarding the purchase as an investment and the numbers need to stack up to make it worthwhile for them. More on this in our article: Buying distressed property in Spain – 8th August 2011
  7. Apply for debt-consolidation.There are scores of financial companies offering this service. Basically, what they do is group together all your existing debts with different lenders (ranging from credit card debt to personal loans) and concentrate them all in the hands of only one lender who then extends the loan repayments in time. The immediate consequence this has is that your monthly repayments are sharply reduced making them far more affordable. However, the drawback once again is that, on extending the financial commitments over time, you will be paying far more interest on the long run.
  8. Dissolution of joint property ownership. Falling on hard times may drive a wedge between couples, families and friends making cohabitation a challenging prospect. A DJPO allows joint owners to re-arrange their share on a property in a tax-efficient manner enabling the outgoing joint owner to transfer his share to an existing co-owner legally waiving the extreme Property Transfer Tax and paying in lieu only 1.5% Stamp Duty, or less. This procedure’s highlight is that it saves property buyers over 86% in property transfer tax. A DJPO is suitable in a divorce or separation, re-arranging inheritances, or re-arranging property holdings between family and friends. More details in our article: Dissolution of Joint Property Ownership in Spain – 8th of June 2020.
  9. Dación en pago (handing back the keys). This option should only be considered as last resort when all other options are exhausted. This is handing the back the keys to a lender and signing a deed at the Notary whereby the lender commits not to chase you for the outstanding debt. In exchange, a lender fully discharges your mortgage liability. You will not be pursued abroad in your home country on the shortfall. Two things are required, the property must not have slipped into negative equity and your lender must not have instigated a repossession procedure. Should the property be in negative equity (you owe more than what the property is worth) a lender will be reluctant to agree to a “dación en pago de deuda” because the collateral will have no equity left. Please read our article: Dacion en pago explained – handing back the keys – 8th July 2020.
  10. Filing for personal bankruptcy in Spain.This procedure is expensive albeit it allows those who can afford it to buy considerable time (years) with which to re-negotiate their financial commitments and even reduce the amount owed (up to 30%). A judicially-appointed administrator will be tasked to oversee and manage your day-to-day financial affairs in the interim. Meaning you lose control over all your assets needing to request permission to manage your affairs. I would only recommend this option in exceptional cases as it will turn you into a lifetime financial pariah. This is not an option for most people. More on this in our article: Personal Bankrutpcy in Spain: Second Opportunity Law – 8th September 2015.

 

In conclusion

Spanish young generations are the key to diversify our economy and avoid such repeat scenarios unfolding ever again. Our political class would do well to take cue from leading world super-powers, such as China and the US, and go out of their way to lay the foundations of a great higher education over the next 50 years. This would be achieved by heavily investing in devoted teachers, schools, academic institutions, and building modern facilities. By setting up lavish euro-billion endowments for top-performing universities in the image of reputed Ivy League institutions, enabling all types of tax incentives to attract capitalization, foster R&D, incentivize integrated business campus with budding small caps within universities (i.e. Malaga’s Technology Hub, which is a success story, having created thousands of highly qualified, well-paid jobs), by creating truly generous scholarships for bright students (not the paltry ones we have), so as to nurture a strong, modern, meritocratic secular education. This undertaking requires vision, commitment, and long term planning.

Real statesmen are selfless and do, at all times, what is best for their people regardless of the unpopularity or electoral cost. They commit themselves to a long-term vision and focus on what really matters for the country, with their hearts set in the nation's future prosperity. Career politicians, by contrast, make decisions on the hoof based on short-term opinion polls and are self-serving.

Politicians have no business in meddling and controlling companies, especially career politicians who have never worked in their life and have always lived (very) comfortably off the state. It is not politicians’ job to run companies and create jobs, the private sector does this, and does it very well. Career politicians should step back, limiting themselves to create the right tax & legal framework for private companies and entrepreneurs to step forward and thrive, through low taxation and the removal of red tape. They should ensure academic institutions are (very) well-funded, with devoted teachers being paid top dollar (not the meagre wages they have), with thousands of truly generous scholarships enabled for gifted or hard-working children from underprivileged backgrounds.

The young men and women who attain this top education, given half a chance, would earn their spurs creating companies, jobs, and a host of new industries that now seem but a distant dream to us. This in turn would attract investments and generate wealth on a large scale. There can be no strong economy without diversification, and the key to this is a well-educated youth. Every year Spanish politicians bubbly plough billions of euros of taxpayer’s money into shady ideologically-friendly NGOs lead by unqualified chums who wouldn’t be fit to run a hot dog stand. Spain spends an eye-watering 122bn euros every year on 'subsidies'. That's 25% of its annual budget.

Where does all this money go? Why is no one held accountable for this gross misuse of public funds?

There is no efficient allocation of resources. If this squandered money were instead be put to good practical use for society’s benefit, vastly improving our educational system over the long run, allowing children from humble disadvantaged social backgrounds to access well-funded, top-tier universities, things would look very differently indeed. As an example, the Complutense university in Madrid, which tutors 86,000 students is clearly underfunded with a pitiful budget of only 600 million euros a year! By contrast, Harvard university has an endowment of over 41 billion USD and hosts 22,000 privileged students. Yes, one is public, and the other private, but you get my drift. Spain woefully does not commit enough financial resources to higher education, only the bare minimum, and it shows. Embarrassingly, albeit unsurprisingly, Spain has no university ranking amongst the world’s top two hundred. This is unacceptable no matter how you look at it.

For a country that purportedly ranks as the 13th most important economy in the world, by rapport to its GDP, this is a serious imbalance that needs to be addressed at a political level - by all parties - to ensure equality and meritocracy. This academic imbalance spills over into Spain’s imbalanced economy which in turn translates into over 30% unemployment rate. Meanwhile, our career politicians self-approved this year a lavish increase of their public stipends. God forbid they endure financial hardship in these trying times.

Perhaps our self-complacent career politicians should talk less and do more, taking example from real statesmen and more advanced economies, for the good of the people.

If you think education is expensive, try ignorance.

 

An investment in knowledge pays the best interest.” – Benjamin Franklin

Benjamin Franklin (1706 – 1790). Founding Father of the United States of America. Exceptionally gifted statesman, scientist, inventor, accomplished diplomat, writer, humourist, printer, postmaster, and political theorist. Even politician in his spare time; nobody is perfect.

 

Larraín Nesbitt Abogados, small on fees, big on service

LNA is a law firm specialized in conveyancing, taxation, 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. 

Related articles

 

Article also published at Spanish Propert Insight: 10 money-saving tips if you have to tighten your belt in Spain

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. VOV.

2.011, and 2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Lifetime loans explained

Raymundo Larraín Nesbitt, August, 3. 2020

Are you a senior citizen struggling with liquidity problems in Spain? Did you know there is a special legal procedure to free up equity from your home and easily obtain money from lenders? Solicitor Raymundo Larraín explains to us what a Lifetime Loan is and how you too can profit from its multiple benefits. Interested? Read on.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 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.

 

Article copyrighted © 2011, and 2020. Plagiarism will be criminally prosecuted.

Today’s article is dear to me, as it was the first one I published in Spanish Property Insight, under my own name, a decade ago. At the time, I was living and working in the United Kingdom.

Original article from the 21st February 2011

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of August 2020

Introduction

Back in 2006, I was one of the first lawyers in Spain to formally introduce Lifetime Loans (LTL, for short) from the hands of a New Zealander institutional lender. This is a very niche financial service that few lenders have on offer. Because it is a service aimed only at residents, unlike other lenders, they do not need to communicate or speak in English, much less in other languages. Which is where we come in.

In the aftermath of the Covid-19 pandemic, families continue to struggle to make ends meet and face their mortgage payments.

LTL is one of our proposed solutions to release equity from your home in Spain. This option appeals to senior expats resident in Spain. It offers them the opportunity to release cash from their homes whilst still being able to live in them for the remainder of their lives.

At a time when finance is tight (understatement), a LTL allows asset-rich but cash-poor senior borrowers to unlock the store of wealth they sit on without any impact to their lives. Well, other than being paid a substantial amount of money that is!

A LTL is a niche financial service. Please contact our company directly if you’re interested, and want to know more.

Definition

A Lifetime Loan is a special type of home equity loan for senior residents. It allows owners to release equity from their homes converting it into cash by placing a charge against their property (which acts as collateral). The loan does not have to be repaid during the homeowner’s lifetime.

Specifics

The borrower retains full ownership of the home and can actually continue living in it until they, or their surviving partner, passes away. Once this takes place, the loan (plus accrued interests) must be settled by either selling the property or else by the appointed heirs who will repay it in full. The loan can be taken either as lump sum or periodically in instalments at the borrower’s choice. The older you are, the larger the amount of money you can qualify for as it follows a sliding scale.

At no time will the borrower owe more than what the collateral (the house) is worth even if the resulting debt is higher. Meaning that at the time of passing away, it suffices to either hand over the property to the lender or else to pay to settle the debt for good. The afore has huge legal significance as it implies that, unlike a standard Spanish mortgage loan, with a Lifetime Loan you cannot be pursued for negative equity. In other words, the valuation of the property for the purpose of requesting this loan facility is the capped threshold you can expect to owe a lender on signing on the dotted line. This brings much relief to borrowers.

Who qualifies for a Lifetime Loan?

  1. Be resident in Spain.
  2. Be 65 years old, or over.
  3. The property must be your main home (not a holiday home).

How’s the loan paid?

  1. In lump sum, all in one go.
  2. In monthly instalments.
  3. A combination of the two above.

Payout chart

The following is a chart to give you an idea on what you can reasonably expect to be paid out. It follows a sliding scale, so the older you are, and the more your property is worth, the higher the payout. In the below chart I only show the payout either as a lump sum or in monthly instalments, but you could also choose a combination of the two if this accommodates you more.

Property value (€)

Age

               Payout (€)

    Lump sum          Monthly

200,000

65

           50,000                   200

200,000

80

           78,000                   600

 

 

 

500,000

65

         120,000                   500

500,000

80

          195,000                1,500

 

 

 

1,000,000

 65

          240,000                1,000

1,000,000

 80

          390,000                3,000

Pros

  • You get to decide how and when you want the loan paid out. You are in control.
  • The loan does not need to be repaid during your lifetime, only after you pass away. You have peace of mind.
  • You may continue to live in your home for the remainder of your lifetime unmolested. You are independent.
  • Attaining this loan does not impact your lifestyle in any way other than improving it. You deserve it.
  • You get to decide how and when to spend the loan, no strings attached. You have freedom.

 

Are there any restrictions on what can be done with the loan?

None. You are free to use the loan as you see fit. For example, some borrowers use it to pay for improvements on their homes, others to travel around the world, and others to finance expensive medical treatments.

In conclusion

One of the main drawbacks of living in a democracy is that retirement nowadays is akin to playing a rigged soccer match with the Government, in which it keeps moving the goalposts! It is foreseeable governments will jump at the chance to use the Covid-19 pandemic as a plausible excuse to push back retirement age by several years – again. Some people would rather play it safe and not take chances with their life savings on applying for a LTL. A LFTL gives you peace of mind and financial stability because no matter how choppy the waters are up ahead, you always get paid on time. It nicely supplements any pension cover you may already have affording you in your twilight years quality of life and choice.

A Lifetime Loan is a great option that can help you, and your partner, attain a tidy amount of extra income to help you push (very) comfortably past the finish line every month. Attaining a LTL does not change your lifestyle in any way, well, other than greatly improving it!

At LNA, we help clients to secure a LTL anywhere in Spain, discharge an existing mortgage liability, and sign it on your behalf at a notary for a very competitive fee. This is a very niche financial service that very few lenders have on offer, and we know them all. We have over 14 years’ experience signing them. Give us a buzz and find what the fuss is all about.

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

Democracy is the worst form of Government except for all those other forms that have been tried from time to time.”Winston Churchill

Sir Winston Leonard Spencer-Churchill (1874 – 1965). Born into a privileged aristocratic family,  he was an eminent British career officer, artist, historian, delicious eccentric, and laureate writer – awarded the Nobel Prize in Literature in 1953 “for his mastery of historical and biographical description as well as for brilliant oratory in defending exalted human values.” With dogged single-minded determination, he defied alone and managed to stave off, the tyrannical Nazi wave in WWII, unwaveringly assisted by our American cousins, which threatened to swallow whole the United Kingdom as it had already overrun most of Europe. He resolutely led the country out of its darkest hour, restored Europe’s freedom, and laid the groundwork for peace and prosperity which all future generations have come to enjoy since and taken for granted, or so it would seem. As a keen-eyed historian, in line with fellow Founding Fathers Schuman and Monnet, he was quick to grasp and understand the importance of a united Europe to avoid repeat past mistakes which had resulted in two world wars that ravaged the continent. Consequently, he became a staunch defender of the idea of creating a single supranational political and economic entity which reconciled old foes and would act as a guarantor of peace & prosperity in the continent (in his own words, a “United States of Europe”); in time, this European fellowship would be known to us as the European Union. Churchill was instrumental, and the key driving force, behind the creation of the Council of Europe, a forerunner of what is now the European Union. He is credited as one of eleven Founding Fathers of the Union. Churchill incarnated like no other the best of British values. A child of the House of Commons, he was a proud servant of the State, never its master. A true statesman that would always put ahead of any consideration the best interests of our people, by tearing down divisive walls and fostering at every opportunity union.

Simply put, he’s likely the finest British politician ever to grace 10 Downing Street.

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 service Larraín Nesbitt Abogados offers you

 

LTL related articles

 

Article originally published at Spanish Property Insight: Lifetime Loans Explained

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. VOV.

2.011, and 2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

 

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Dacion en pago explained - handing back the keys

Raymundo Larraín Nesbitt, June, 19. 2020

Are you struggling with your mortgage payments? Did you know there is a special legal procedure in Spain to hand back the keys to your lender, without attracting any penalties? Solicitor Raymundo Larraín explains to us how to formally surrender the keys to your lender securing your assets abroad and without attracting any taxes. Interested? Read on.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 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.

 

Article copyrighted © 2008, 2010, 2013, and 2020. Plagiarism will be criminally prosecuted.

Original article from the 21st November 2008

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of July 2020

 

Introduction

In the aftermath of the Covid-19 pandemic, families struggle to make ends meet and face their mortgage payments.

Given the tough financial situation we are in, the most challenging since The Great Depression, it is foreseeable scores of borrowers will fall into arrears over the next months. In this month's article, we focus on one of the proposed legal solutions for individuals who are struggling with debt in Spain. There are several other options you should consider first, and we will cover them in detail in next month's article. As advised, today's solution should only be regarded as your last option, as it entails surrendering your home keys to your lender and walking away from it all.

For all those who’ve slipped into mortgage arrears in Spain, or are likely to, and are thinking of handing back the keys as a solution, there’s a formal legal procedure to do it known as dación en pago (‘datio pro soluto’). Article 140 of Spain’s Mortgage Act allows a borrower to cancel a lenders’ debt by handing in exchange the encumbered asset.

This solution of last resort puts an end to many borrowers’ waking nightmare, as the mortgage debt mounts up exponentially over time eventually becoming unbearable.

You simply cannot hand back the keys to a lender.

It needs to be done following a formally established procedure known as ‘dacion en pago’, witnessed by a notary public. If you simply leave the keys on the counter, you are defaulting on a mortgage loan, which has serious legal & financial repercussions, as explained below.

Your lender will be forced to follow a full-blown bank repossession, which attracts a great deal of expenses for them. What many borrowers fail to realize, is that the loan debt is not finished on handing back the keys. When a bank repossesses you, the value of the property can be for half, or less, of the appraisal value post-auction. Meaning, even after being repossessed you still owe your lender money. Your lender will chase you against your assets for the shortfall, even abroad.

Your lender will also blacklist you with all major credit-rating agencies, which will seriously hamper your borrowing ability in the future in your home country, or elsewhere. It will gravely affect your credit score, to the point that companies will refuse to issue you credit or debit cards, and you will even be barred from applying for membership from selected retailers i.e. gyms, clubs, golf clubs, commercial centres, etc.

A dacion puts an end to this nightmare, ringfencing your assets.

Definition

In plain English, ‘dación en pago’ (or dation in payment) means handing back the keys to a lender at a notary, and in exchange a lender discharges in full the mortgage liability not holding a borrower liable in the future. They will renounce pursuing the debt in your home country, or elsewhere, against any other assets you may hold.

Why hand back the keys? Unlimited personal liability

The reason on why struggling borrowers follow a dación is because on being repossessed in Spain, if a property slips into negative equity (meaning you owe more money than what the property is worth), a lender will pursue the borrower for the difference (art. 579 LEC), even abroad, in your home country.

Following article 1911 of the Spanish Civil Code, a mortgage borrower’s liability is personal and unlimited with all his assets, both now and in the future. In other words, the debt goes personally against the borrower on the balance owed to a Spanish lender. The property itself, the collateral, is accessory and was only guaranteeing the bank loan, which is the principal. Meaning a lender will legally pursue a borrower on the shortfall post-repossession.

A dación is particularly interesting for those holding property, whether in Spain or abroad. What a mortgage borrower seeks on following a dación is to set a legal firewall that will avoid a lender jeopardising the remainder of his assets. It is basically ringfencing the family’s financial assets by (legally) drawing a line on the sand. If you hold no assets, then you may wish to skip this article altogether.

Many defaulting borrowers realize with shock and horror only post-auction, that in despite of a lender having repossessed their Spanish property, they are still being chased in their home country for the outstanding debt. As they owe, in addition to the mortgage loan shortfall, the bank repossession’s associated expenses, lawyer’s fees, court agent’s fees and on top the mortgage default compound interest. The default compound interest on average is over 20% p.a. which only adds more pain on the long run as the overall debt builds exponentially over time.

That is why many defaulting borrowers, in lieu of being repossessed and face all the above dire legal and financial consequences, would rather sell the non-performing mortgage loan as a distressed asset (fire sale) or else simply follow a dación procedure if they are unable to find a buyer in time to avoid repossession proceedings.

Bottom line, a repossession in Spain is something borrowers should avoid at all costs, and a dacion does just that.

Requirements

  1. No-negative-equity rule: the property should not be in negative equity. As a rule-of-thumb I would personally advise the buffer of equity to amount to at least 20% of the property value for it to be successfully accepted. The higher the positive equity buffer, the more likely a lender is to accommodate the idea of a dación.
  2. No repossession procedure underway: it is critical a lender has not instigated repossession proceedings against the property.

Dacion en pago procedure

The outline on how it works is as follows:

  • Borrower must be up to date with mortgage repayments, community fees, and local taxes.
  • Borrower proposes his lender a dacion en pago
  • Lender requires a property reappraisal. Borrower pays for this (approximately €350).
  • If on average the new valuation of a property covers the outstanding mortgage loan, plus 12% of the associated legal expenses, the lender accepts to take the possession of the property, cancelling your debt and waiving any legal action against your assets.
  • Your lawyer, in tandem with the lender, drafts a special deed to be witnessed by a notary public. The deed is signed at a notary, and the borrower formally surrenders the keys in this act, leaving the property clear of furniture and tenants.
  • The property will now be lodged under the lender’s name.

 

Expenses involved

A dación en pago works similar to a conveyance procedure only that instead of getting paid in exchange of signing your property away, you are fully discharged of the mortgage liability being allowed to walk away scot-free from the problem - without any legal repercussions.

  • 6 to 11% Property Transfer Tax (ITP) contingent on the autonomous region of Spain where the property is located
  • Plusvalía tax
  • Lawyer’s fees
  • Notary fees
  • Land Registry fees
  • Gestoría fees (may not apply)

 

Ideally all the above expenses should be negotiated by your lawyer to be borne by the lender (except the lawyer’s fees). A lender, on becoming the new owner, will contribute towards the community fees just like any other member in a Community of Owners. That is the reason why there must be sufficient equity in the property to offset, not only the associated completion expenses and taxes, but also the ongoing community maintenance costs and property taxes until a lender manages to sell on the property. Banks are not real estate agencies and do not cherish having large stocks of unsold properties on their books; that is not their core business.

Signing the notary deed and frequent mistakes

 

You can either sign a dation in payment personally or else instruct a lawyer to sign it on your behalf through a power of attorney.

However, I just cannot stress enough the importance of instructing your own lawyer. He will verify the debt with your lender is fully discharged on you signing the deed relinquishing ownership, besides acting as a translator (mandatory). Besides, your lawyer will negotiate with the lender on your behalf who pays for the expenses, as some lenders notoriously make borrowers pay for some (or all) the associated expenses if unrepresented.

I have witnessed several cases in which borrowers - acting without a lawyer - were purposely tricked into signing before a Notary what they thought was a dación, but was in fact only an assignment of rights and assets (datio pro solvendo) which does NOT extinguish the debt.

The practical implication of this is that the mortgage liability is not fully discharged, remaining very much outstanding. Meaning lenders can – and will – pursue the borrower abroad for the outstanding debt, which mounts up exponentially over time. It is standard practice these debts are sold in block to local debt-collection agencies for a fraction of the book value. E.g. a Spanish lender sells hundreds of defaulted loans to a local UK company who will then (aggressively) chase you in England on the arrears, plus interests, and expenses against your main home and assets.

Another glaring mistake people often make is that they rely on Spanish notaries or lenders to act as their own private lawyers. Some borrowers are lulled into a false sense of security thinking that only because a Spanish notary or bank is involved that everything will be above board and they will look after their rights – crass error. A notary is not there to give you legal advice, as he acts impartially to either side. Their main role is to witness the deed and ensure taxes are paid to the state (they are after all civil servants working for the government). Don’t rely on a notary to act as your own personal solicitor, because he won’t.

You must instruct your own legal counsel to safeguard your interests.

Pro-tips:

  1. A dacion fully discharges your mortgage liability, bringing (legal) closure to the matter.
  2. A dacion en pago avoids jeopardizing your assets in your home country; you will not be chased abroad on the shortfall plus expenses.
  3. Following a dacion avoids being blacklisted by major credit-rating agencies, such as EXPERIAN, ASNEF, RAI etc.

 

Dación en Pago – Conclusion

A dación en pago is a win-win for both parties.

A borrower is free at last having managed to stave off the problem by successfully securing his assets, whether in Spain or abroad, from a lender or any law firm or debt-collection agency hired to pursue the outstanding debt.

A lender on the other hand will now own the property outright and will have successfully waived a lengthy, protracted and expensive court procedure (bank repossession) without having to set aside the mandatory provisions before the Bank of Spain to make up for this dubious loan which affects its liquidity ratio. A repossession procedure lasts 2 years minimum and may easily entail for the bank expenses running up to 20% of the properties’ value. These provisions set aside by lenders are being looked upon closely by credit-rating agencies post-credit-crunch as they hinder their borrowing ability and ultimately dent their share value.

In short, a dacion offers a way out for all those who’ve lost hope.

 

If you are struggling with debt, and feel the weight of the world upon your shoulders, give us a buzz. Our friendly staff will have a chat with you and guide you on the different options available to you. At LNA, we can represent you handing back the keys for a very competitive fee, regardless of your property’s location in Spain, we act nationwide. We have 17 years’ experience signing them, ask us free of compromise.

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

 

A sad soul can kill you quicker, far quicker, than a germ.”John Steinbeck

John Ernst Steinbeck Jr. (1902 – 1968). Was an American author who won the 1962 Nobel Prize in Literature "for his realistic and imaginative writings, combining as they do sympathetic humour and keen social perception." He is regarded as "a giant of American letters," and many of his works are considered classics of Western Literature. Amongst his vast works, the Pulitzer Prize-winning The Grapes of Wrath and Of Mice and Men stand head and shoulders above the rest and are considered masterpieces of modern US Literature. In these books he poured his soul to depict the class struggles of tenant farmers and migrants, often neglected by society, and the financial hardship they were forced to endure brought upon by The Great Depression.

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Related articles and blog posts

 

Article also published in Spanish Property Insight: Dacion en pago explained - handing back the keys.

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. VOV.

 

2.008, 2.010, 2.013, and 2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Dissolution of Joint Property Ownership in Spain

Raymundo Larraín Nesbitt, May, 22. 2020

Are you fed up with your partner? Did you know there is a special procedure in Spain to terminate property co-ownership which saves you up to 86% in taxes? Solicitor Raymundo Larraín explains to us how to re-arrange asset holdings in Spain between family and friends without attracting a great deal of taxes. Interested? Read on.

Marbella-based Larraín Nesbitt Lawyers has over 17 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.

Article copyrighted © 2007, 2010, 2011 and 2020. Plagiarism will be criminally prosecuted.

Original article from 14th of November 2.007

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of June 2020

 

Introduction

Covid-19 has brought in its wake a host of nasty effects, both direct and indirectly.

Directly, by infecting and killing hundreds of thousands of vulnerable people the world over, from all ages.

Indirectly, by drastically changing our lifestyles as we struggle to cope and adjust to our new reality. Governments, in order to protect the most vulnerable elements of our society, are forced to curtail our fundamental rights and limit our ability to move freely, even forcing non-essential businesses to shut down. But more fundamentally, it has forced people into a seemingly never-ending lockdown, trapped within the walls of their own homes. As a result of these necessary draconian government-imposed measures, it has led to Depression-era levels of unemployment and having developed economies in free fall.

We have gone from Greta’s ‘save the planet’ to save ourselves in the span of only two months.

And we thought Australia’s wildfires, from early on this year, which ravaged the land and devastated wildlife, destroying in its wake thousands of homes and taking the lives of hundreds was going to be the major highlight of 2020. How little did we know. Does anyone remember when this was a thing?

Amid this dire financial context of millions of workers being laid off, myriad companies filing for bankruptcy, property price drops of 40%, or more, stock markets plunging into the red wiping whole family’s life savings, couples are forced to live 24/7 under the same roof - with kids. Understandably, this sparks great tensions or even drives a rift, putting relationships under severe strain.

Not everyone has what it takes to come out on top. Escaping from this ordeal unscathed is proving quite the challenge for most couples and as a result we are sadly witnessing more and more couples filing for divorce.

In this article, we explain a special legal procedure that can be followed in Spain to re-arrange property holdings which saves buyers a considerable amount in taxes. On buying resale property in Spain, a buyer is normally subject to 8% Property Transfer Tax (ITP), or even more, on the sales proceeds. However, on following what is known as a ‘Dissolution of Joint Property Ownership’ (or DJPO, for short) a buyer attracts only 1.5% Stamp Duty.

In plain English, this procedure saves you 86% in tax, or more.

Interested? Read on.

Definition

A Dissolution of Joint Property Ownership allows joint owners to re-arrange their share on a property in a tax-efficient manner as it enables the outgoing joint owner to transfer his share to an existing co-owner legally waiving the extreme Property Transfer Tax and paying in lieu 1.5% Stamp Duty (or less).

DJPO requirements

  • Both buyer and seller must be pre-existing owners of a property i.e. a married couple who own a property under joint names.
  • One of them wishes to terminate the situation and sell his/her share to the other joint owner.
  • If there is an outstanding mortgage on the property, a lender’s permission may be required to release the outgoing borrower/owner from his commitments.

Applicable cases

A DJPO is suitable in a number of cases involving joint property ownership:

1.- In a divorce or separation. Couples owning property jointly may decide to split up. Taking for granted they own a property in equal shares, one of them decides to sell their 50% to his ex-partner. The ex-partner will pay him/her his quota and this transaction.
2.- Re-arranging inheritances. Beneficiaries of an inheritance transferring their quota on a property to a fellow heir. E.g. Sisters who inherit property transfer a share between them.
3.- Re-arranging property holdings between family and friends. Stakeholders such as family, friends or investors co-owning a property may decide to re-arrange their holdings.

Associated taxes & expenses

Both buyer and seller are subject to pay taxes on transferring ownership of the asset.

Buyer:

  • Pays 1.5% Stamp Duty on the outgoing share.*
  • Lawyer’s fees
  • Notary fees
  • Land Registry fees
  • Pays the % of the property’s value

 

*In some regions of Spain, due to devolved competencies, it is in fact well-below this quoted tax rate.

Seller:

  • Pays Capital Gains Tax on the outgoing share.
  • If the seller is non-resident, a 3% retention may be practiced on the outgoing share.

 

Forced Dissolution of Joint Property Ownership

What happens if one of the co-owners refuses to sell? This is when a contentious DJPO comes into play. It involves litigation.

There may be cases in which one of the joint owners may wish to terminate the joint ownership for good and sell the property. Fellow co-owners, for whatever reason, may turn down the proposal to sell the property as a whole and likewise may refuse to buy him out. This will result in a bitter gridlock that will erode personal relations.

To bypass the deadlock, any joint owner is entitled to force a DJPO through a competent law court (Arts 406 and 1062 of the Spanish Civil Code). The court’s ruling will overrule any dissent and the asset will be disposed of regardless of opposition from fellow co-owners. The property will then be auctioned off publicly to the highest bidder.

However, a forced dissolution through a law court is only advisable as last resort wherein the disagreement is serious resulting in a protracted stalemate. The reason is that all joint owners stand to lose significantly on following it. Sadly, at times, this may be the only legal solution to bring an end to an ongoing co-ownership quarrel.

In conclusion

A Dissolution of Joint Property Ownership is optimal to mitigate a buyer’s tax burden. In fact, you save 86% in taxes, or more, in a legal manner.

However, a DJPO may not apply in all cases. Seek legal advice on the matter.

A non-contentious DJPO works almost like a conveyance and can be arranged within a few days providing both parties agree to it. It can be arranged without any need to fly over to Spain by way of granting your appointed Spanish lawyer a specific Power of Attorney. The new re-arranged ownership will then be lodged at the Land Registry after the associated taxes are settled.

A DJPO neatly puts to rest the financial side of couples’ ongoing marital disputes, legally saving them a great deal in taxes. It’s a win-win.

At LNA we can represent you following a DJPO for a very competitive fee, regardless of the property’s location in Spain. We act nationwide. Ask us free of compromise.

 

"Toute nation a le gouvernement qu'elle mérite." – Joseph de Maistre

Joseph-Marie, comte de Maistre (1753 - 1821). Was a Savoyard lawyer, diplomat, writer, and philosopher. Together with the Anglo-Irish statesman and philosopher Edmund Burke, Maistre is commonly regarded as one of the founders of European conservatism.

 

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 service Larraín Nesbitt Abogados (LNA) offer you:

 

Related DJPO articles

 

Article originally published in Spanish Property Insight: Dissolution of Joint Property Ownership in Spain

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. VOV.

2.007, 2.010, 2.011, and 2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Home-Seller’s Checklist

Raymundo Larraín Nesbitt, May, 1. 2020

Lawyer Raymundo Larraín gives us a rundown on the points we should have ready on selling a house in Spain. This is the third, and final, of a three-part series on buying & selling property in Spain. Previous entries:

 

Marbella-based Larraín Nesbitt Lawyers has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 40 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2018, 2020. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of May 2020

 

Congratulations, you have found a buyer for your Spanish property! You should now instruct a lawyer to represent you in the sale, particularly if you are non-resident in Spain.

To secure the deal, your appointed lawyer will require from you a long list of documents you should have ready at hand. These documents will then be forwarded to the buyer, or his legal representative, as they are necessary to prepare a due diligence.

Following this, the next step would be exchanges; to sign the all-important Private Purchase Contract (contrato privado de compraventa, in Spanish). At times, buyer’s & seller’s skip this key step and go straight to completion, but in my opinion, this is unadvisable for reasons I won’t go into.

The below list is thought only for non-resident sellers acting as physical persons. If the seller is a holding company, there would be additional documents that need to be handed over to a buyer, or his representative.

Selling property may at times prove a daunting and stressful ordeal for sellers; to save yourself aggravation and time it is most advisable a seller pre-empts this by collating the below list well ahead of time.

You are welcome.

Seller’s checklist

 

  • Full scanned copy of your purchase Title Deed
  • (Updated) scanned copy of a Nota Simple
  • Copies of your national ID, passport and NIE Number certificate (in force). A duplicate NIE certificate is at times demanded by notaries if your certificate already expired i.e. 3-month validity (the assigned number never changes)
  • Copy of recent utility invoices (water & electricity)
  • Copy of IBI tax invoices, for the previous 4 years
  • Copy of Refuse Charge (Basura, in Spanish), for the previous 4 years
  • Energy Performance Certificate
  • Licence of First Occupation
  • Community of Owner’s administrator contact details
  • Scanned copies of the minutes of the last three General Assemblies (Junta General Ordinaria, in Spanish)
  • Community of Owner’s Certificate stating the property being sold is not in arrears
  • Spanish fiscal residency certificate (to avoid a 3% retention on the sales proceeds)
  • Copy of Power of Attorney, if instructing a lawyer (it is highly advised that you do to avoid payment scams at completion, which are rife)
  • If renting out, copy of the signed lease agreement

 

Capital gains tax mitigation checklist

 

On hiring our law firm, we can GREATLY mitigate your tax bill on selling property. We can offset all the following taxes and fees at no extra cost:

  • Lawyer’s fees (on buying).
  • Notary fees (on buying).
  • Land Registry fees (on buying).
  • Taxes (on buying) yes, these can be offset in full on selling – you are welcome.
  • All property-related improvements (not maintenance costs) i.e. glass curtains, refitted kitchen, roof retiling, wood flooring, A/C installation, house alarm etc.
  • Estate agent's commission (on selling): VAT invoice/s.
  • Lawyer’s fees (on selling): VAT invoice.

 

3% tax rebate on selling property in Spain

 

To close, free of charge, we also apply for a tax rebate on the 3% withheld by the Spanish Tax Authorities on account of a non-resident seller’s CGT liability. This is taking 5 months on average through us.

Selling at a loss?

 

If you’re selling at a loss, we can apply for a full tax refund of your plusvalia tax for a very competitive fee. More on this service in our article: Have you sold property at a loss in Spain? You can now apply for a tax refund. In general, you only have 30 days as from the date of sale to apply for this tax rebate.

Sounds interesting? Call us.

 

At Larrain Nesbitt Abogados we have over 17 years’ experience assisting clients buying & selling property in Spain and dealing with its taxation.

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

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, taxation, 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 to book an appointment.

Legal services available from Larraín Nesbitt Lawyers

 

Selling-related articles

 

Article also published at Spanish Property Insight: Home-Seller’s Checklist

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.

2.018, 2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

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