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Pensioner’s Visa explained

Raymundo Larraín Nesbitt, December, 1. 2024

Raymundo Larrain reviews Spain Retirement Visa (officially known as a Non-Lucrative Visa, or NLV for short).

Marbella-based Larraín Nesbitt Abogados (LNA) has over 21 years of experience at your service. We offer a wide range of 60 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of December 2024

Introduction

It is not without reason this visa is popularly dubbed the Pensioner’s Visa. The fact is that in my experience young applicants are routinely turned down. To apply successfully, you should be of retirement age.

This visa was devised and aimed at a specific demographic collective which are retirees.

Young applicants, of working age, should abstain from applying.

What is a Pensioner’s Visa?

It is a residence permit granted to all senior non-European nationals who wish to live in Spain.

This visa allows applicants to live in Spain, but not to work.

Key benefits of a Pensioner’s Visa

Immediate residency. Allows you to live in Spain overriding the 90/180-day limitation.
Freedom of movement in the European Union. Allows visa-free travel throughout the Schengen Area (29 countries).
Clear rules. Initially granted for 1 year, then renewable every 2 years.
Ultra-low fees. Cheapest visa available. Conversely, it’s also the one that takes the longest to process.

Requirements to attain a Pensioner’s Visa in Spain

Cannot be working at the time of making the visa application
Be of pensioner age
Be financially self-supporting. You cannot be working, you need to live of savings and pension pot
Secure private healthcare in Spain. You can then switch over to an S1.
Relocate to Spain

Pensioner’s Visa application procedure

Collate all the required documents
Visa application is submitted to Spanish Immigration Authorities
Visa granted in several months (2 to 3 months)
Attain a biometric residency card in Spain

Frequently asked questions

Does this visa allow me the right to work in Spain? I want to set up a bed and breakfast in Spain.

No, it does not grant the right to work in Spain.

Moreover, you cannot be working at the time of applying for this visa. This is closely monitored by Spanish Immigration Authorities, both on the initial application and also on the visa renewal. A B&B is ruled out.

If you get caught working (in Spain or abroad), you will be stripped of this visa and deported.

You are expected to live only on savings and pension.

That is why young people are rejected, because they are of working age.

2. Do I need to relocate to Spain permanently?

Yes, that’s the whole point. You are meant to start a new life living in Spain all year round.

This is closely monitored on visa renewal.

If you are unable to prove you have been living long-term in Spain your visa renewal will be turned down.

3. Can I live anywhere in Spain?

Yes, anywhere. Take your pick: Barcelona, Costa del Sol, Granada, Madrid, Malaga, Mallorca, Seville, and Sotogrande.

Conclusion

Pensioner Visas are only suitable for applicants who are committed to relocate and live in Spain long term. The idea is to retire to Spain and live your twilight years enjoying life at its best.

However, if you plan to continue living abroad (i.e. in the UK), and you are only applying to circumvent the 90/180-day rule, this visa is not for you.

Our multidisciplinary team at Larrain Nesbitt Abogados (LNA) has attained hundreds of visas over the last decade for our non-EU clients.

LNA has a 100% track record of attaining Spanish residency

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

At Larrain Nesbitt Abogados (LNA) we have over 21 years of experience specializing in immigration & residency visas. We also assist clients in buying, selling, or renting properties in Spain. You can contact us by e-mail at info@larrainnesbitt.com, by telephone at our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

Residency services available from LNA:

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

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

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

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Marriage Visa explained

Raymundo Larraín Nesbitt, November, 2. 2024

Raymundo Larrain reviews the Spanish ‘Marriage Visa’.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt

Director of Larraín Nesbitt Abogados
8^th of November 2024

Introduction

Although I will refer to it throughout this article as a Marriage Visa (because it rolls off the tongue nicely and it’s snappy for marketing purposes) the fact of the matter is that this is really a Family Reunification Visa. A dull legal term I’ll avoid like the plague.

The legal implication is that the scope of the visa is broader, and goes well beyond marrying someone, let alone an EU national. Moreover, you can attain this visa by not being married to someone (!) who may not even be an EU national (!!). Confused? Good.

For simplicity’s sake, I’ll just continue to call it a Marriage Visa, but in the understanding its scope goes well beyond marriage. Perhaps Family Visa would be a more appropriate name.

What is a Marriage Visa?

It is a residence permit granted to all non-European nationals on being married to an EU national, or alternatively, to a settled non-EU.

It also applies to analogous affectionate relationships (so long as proven).

This visa allows applicants to live in Spain and work (optional).

It opens the path to permanent residency (after 5 years) and to Spanish nationality (after 10 years).

Key benefits of a Marriage Visa

It offers multiple advantages. A red rug is rolled for its applicants, as the EU wants families to reunite as fast as possible.

Immediate residency. Allows you to live in Spain overriding the 90/180-day limitation.
Freedom of movement in the European Union. Allows visa-free travel throughout the Schengen Area (29 countries).
Fast-tracked. They are expedited, in some cases granted in under a week.
Longest-lasting visa. Right off the bat you are given 5 years (the maximum). Renewals every 5 years.
Clear rules. Initially granted for 5 years, then renewable every 5 years.
Right to work. This visa allows the right to work in Spain.
Low fees. Processing fees are low, making it one of the cheapest visas available.

Requirements to attain a Family Visa in Spain

Marry an EU national (civil or religious weddings are accepted), or
Marry a non-EU national who has already attained a residency permit to live in Spain (settled), or
Be in a relationship with someone who is residing in Spain. This will have to be proven by official documents.
Be financially self-supporting.
Secure private healthcare in Spain.
Relocate to Spain.

Marriage Visa application procedure

Collate all the required documents
Visa application is submitted to Spanish Immigration Authorities
Visa is granted in under 30 days through us
Attain a biometric residency card

Examples of Marriage Visa holders

Non-EU marries non-EU. UK Barry marries Josephine, a Jamaican national with a residence permit to live in Spain.
Non-EU marries EU national. Arianne, a Canadian national, marries Gunther, a German national residing in Spain.
Non-EU marries Spanish national. Lula Mae, a US national, marries Maria Luisa, a Spanish national.
Non-EU family reunification within the EU. Mohammed, a Moroccan national residing in Spain, brings his family over to Spain (wife, four children, and mother-in-law).
Analogous relationships. Surfer Tyler is in a relationship with David, a French DJ working in Ibiza.

Frequently asked questions

Do I really need to get married?

Eh, not really.

It is the core requirement, but alternatively, other types of analogous relationships – other than marriage – are also accepted, at least in theory.

However, in practice, a great deal of problems arise with proving analogous relationships, which leads to widespread visa rejections.

Will I become tax resident in Spain?

Yes.

Does this visa give me the right to work in Spain?

Yes, on equal footing with any Spanish national.

Can I live anywhere in Spain?

Yes, anywhere. Take your pick: Barcelona, Costa del Sol, Granada, Madrid, Malaga, Mallorca, Seville, and Sotogrande.

Conclusion

Marriage Visas are only suitable for applicants who are committed to relocating and living in Spain. If you plan to remain abroad, or do not fancy becoming tax resident in Spain, this visa is not for you.

Our multidisciplinary team at Larrain Nesbitt Abogados (LNA) has attained hundreds of visas over the last decade for our non-EU clients.

At LNA we get you a Marriage Visa in under four weeks.

Your family’s success is only one call away.

LNA has a 100% track record of attaining Spanish residency

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

Residency services available from LNA:

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

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Digital Nomad Visa explained (tax-free visa)

Raymundo Larraín Nesbitt, October, 4. 2024

Raymundo Larrain reviews Spain’s Digital Nomad Visa, a new type of visa which allows its privileged holders to pay no tax in Spain on income and assets abroad. The DNV is all about paying no tax.

You can review here our client’s testimonials.

Amanda busy at work from her new Marbella office

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of October 2024

Introduction

Do you fancy living in Spain but paying fewer taxes (or even none at all)?

Are you a high-earner, or have a sizeable estate abroad?

Are you able to relocate and telework from Spain?

If the answer to all three is yes, the DNV should be top on your radar.

What is a Digital Nomad Visa?

The DNV is a residence permit granted to non-European nationals on teleworking from Spain.

It requires you to either be hired by a foreign employer or be a freelancer.

This visa allows applicants, and their dependants, to live and work in Spain.

Tax benefits of a Digital Nomad Visa

The DNV is the first of a new generation of visas which aims to attract high-rollers to Spain. Spain saw the wild success of the UK’s popular non-domiciled tax scheme (geared towards UHNWIs) and decided to copy it. First, it came up tentatively with Beckham’s Rule in 2015 (only aimed at EU nationals), and then decidedly in 2023 it expanded its tax benefits to all non-EUs through its Digital Nomad Visa program.

Needless to say, the main outlier of DNVs is that you pay little to no tax. No other Spanish visa offers these superb tax advantages collated below.

This is of particular interest to HNWI, or UHNWI, who are being overtaxed in their home countries.

The DNV allows you to relocate to Spain and pay a testimonial tax rate on personal income earnings.

It has associated multiple tax benefits:

All income derived abroad goes untaxed by Spain.
All assets located abroad go untaxed by Spain.

In other words, any source of worldwide income or assets are tax-exempt (just like with the popular UKs non-dom tax scheme). The only exception is any income derived abroad from working.

DNV holders only pay tax strictly on the income they derive working remotely in Spain for a foreign employer. They will pay a flat tax rate of 24% on the first €600,000 of gross annual earnings over a five-year period. This translates into tax savings of 50%, or more, on income you earn strictly in Spain
You are not required to file a 720 tax return (unlike Spanish tax residents)
You are not required to file Wealth Tax (unlike Spanish tax residents)
You can request to defer tax payments on the first and second year, without attracting penalties or delay interests being rolled on top (as is standard)
For the purposes of other tax agencies, you will be tax resident in Spain.

Example of a DNV holder

Amanda Hollingsworth is the CEO of a young and upcoming AI company. She holds £8mn in savings and investments. She owns two rented properties in London, one in Paris, and a penthouse in New York adding a further £21mn. Amanda believes she overpays tax in the United Kingdom and decides to explore new options to pay less tax.

The nature of Amanda’s job allows her to relocate to Spain and telework from there, commuting unfettered to the UK – or elsewhere – as many times as she sees fit. The Company’s Board decides to reward her with a £400k wage packet on working from Spain.

If she attains a DNV in Spain:

The £8mn she holds in savings & investments would go untaxed by Spain.
The £21mn property portfolio she holds abroad (London, Paris, and New York) would also go untaxed by Spain.
The rental income she derives from her two rented properties in London would also go untaxed by Spain.
The only tax she would be subject to in Spain is personal income tax on the £400k she earns. Normally – as a Spanish tax resident – she would be subject to a top marginal rate exceeding 50%, but because she holds a DNV, she only pays a flat tax rate of 24% on her gross annual earnings, saving over 50% in personal income tax!

In view of the above, Amanda concludes she can greatly mitigate her tax bill by applying for a DNV and relocating to Spain.

Barcelona, Costa del Sol, Granada, Madrid, Malaga, Mallorca, Seville and Sotogrande; so many great places to choose from.

What is better, to apply for a DNV from a Spanish consulate or from Spain?

You can apply for a DNV either from a Spanish consulate in your home country or from Spain (through us). However, the time frames, visa duration, and general support provided are indeed very different. In the below chart you can clearly see the advantages of applying through us from Spain in lieu of a consulate:

	Spanish consulate	Apply from Spain through LNA
Time to attain a DNV	Months	3 weeks
Fees	Fees	We match consular fees
Visa duration (years)	1	3
Assistance with filing visa	None	Full, assigned a visa agent

Requirements to attain a Digital Nomad Visa in Spain

Core criteria you need to meet to apply for a DNV

You are employed (or self-employed i.e. freelancer) by a foreign company
You have a work contract (12 months, or more) from a foreign company that allows you to work remotely in Spain i.e. telework
You have been working for three months, or more, for this foreign employer.

I. General staple requirements (apply to all Spanish visas)

1. You are a non-EU national.
2. Hire private health insurance from an approved Spanish health provider, or
3. Enrol in the Social Security
4. Clean criminal record (no live trace) on the previous 5 years.
5. Not be already in Spain illegally at the time of making a visa application.

II. DNV specific requirements

1. You need to prove you are hired by a foreign company. You need to have been working for this employer at least 3 months prior to making a DNV application. A work contract is the core requirement (12 months, or more). A copy of your job contract is required. Alternatively, if self-employed (freelancer), a letter from the company and company records proving it has been operational for more than 12 months.
2. You need to supply a copy of holding formal academic qualifications i.e. a university degree, business school, or professional qualification, or
3. alternatively, you need to prove you have at least 3 years of work experience in the job position you are being hired for.
4. Not to have resided in Spain during the previous 5 years of making a DNV application (e.g. a holder of an existing Golden Visa would be excluded).
5. Not to obtain income from a permanent establishment in Spain.

Digital Nomad Visa application procedure

Collate all the necessary documents
Electronic visa application is submitted to Madrid
Visa is granted
Attain a biometric residency card

How long does a DNV take to attain?

Through us, under 3 weeks.

Conclusion

If you are a high earner, or simply a very wealthy individual, and don’t fancy paying much tax, you should look into a Digital Nomad Visa.

DNVs offer unique tax advantages that no other visa can hope to match, including the coveted Golden Visa.

Some clients don’t even care about the visa, all they want is to pay 90% less tax. And the DNV allows it. If done right, DNVs can be wielded as a powerful tax-mitigation tool at the disposal of non-EUs. Why overpay tax?

At LNA we assign you a visa agent who will guide you throughout the whole application procedure, cutting through all the red tape. This saves you time, money, and aggravation.

LNA attains a DNV in under 3 weeks.

Our multidisciplinary team at Larrain Nesbitt Abogados (LNA) has attained hundreds of visas over the last decade for our non-EU clients.

Your family’s success is only one call away.

LNA has a 100% track record of attaining Spanish residency

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

Residency services available from LNA:

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

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

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Golden Visa in Spain explained

Raymundo Larraín Nesbitt, September, 5. 2024

Raymundo Larrain reviews the Spanish 'golden visa', which can still be obtained despite government plans to abolish it.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of September 2024

What is a Golden Visa?

The Golden Visa is a residence permit granted to non-European nationals on investing in Spain.

This visa allows applicants to live and work in Spain (optional).

It opens the path to permanent residency (after 5 years) and to Spanish nationality (after 10 years).

Key benefits of a Golden Visa

It offers multiple advantages which I cover extensively in my article: Golden Visa in Spain: 21 reasons to apply.

Spain’s Golden Visa offers several benefits, namely:

Immediate residency. Allows you - and your family - to live and work in Spain overriding the 90/180-day limitation.
Freedom of movement in the European Union. Allows visa-free travel throughout the Schengen Area (27 countries).
Tax advantage: Unlike every other visa in Spain, the Golden Visa is the only one that does not automatically make you a tax resident in Spain on renewals. This is a unique trait of golden visas that is not shared by any other visa.
Extended family included. Allows the possibility to include the applicants’ parents.
Clear rules. Initially granted for 3 years, then renewable every 5 years.

Requirements to attain a Golden Visa in Spain

There are several paths to qualify for a Golden Visa:

Real estate investment. Invest a minimum of €500,000 in real estate in one, or more, properties (this is hands down the least expensive option).
Bank deposit. Deposit €1mn in a Spanish bank.
Capital investment. Invest €1mn in shares of a Spanish publicly traded company.
Invest in public debt. Invest a minimum of €2mn in Spanish Treasury bonds.
Business project. Develop a business project in Spain that generates employment, has a significant socioeconomic impact, or involves scientific and technological advances.

State of Golden Visas in Spain

Recently, there have been many discussions about the possible elimination of the Golden Visa by the Spanish government. However, to date, the Golden Visa remains active and available to any interested investors.

Golden Visa application procedure

Collate all the required documents
Electronic visa application is submitted to Madrid
Visa is granted in under 3 weeks through us
Attain a biometric residency card

Frequently asked questions

Can I still apply for a Golden Visa? I heard the Spanish government is axing them

Yes, you still can.

The Spanish government announced its plans to eliminate them on the 8^th of April 2024.

However, since then, no concrete date has been given.

All we know at this point is that they intend to eliminate them shortly, but no specific date was supplied.

If I apply for a golden visa now, and the Spanish government phases them out, am I entitled to renewals?

The short answer is yes.

As long as you apply now, before they are phased out, you will have no issues to renew your Golden Visa residence permit.

When will Golden Visas be phased out by the Spanish government?

No specific date was given.

You can reasonably expect them to be eliminated over the next months. Likely, by early 2025.

Can I work in Spain? Can my family work in Spain?

In short, yes.

A Golden Visa is one of the few visas that allows you - and your family - to work in Spain (optional).

Are Golden Visas retroactive?

Indeed, they are.

If you bought a property in Spain, on or after the 29^th of September 2013, you may qualify.

6. Can I live anywhere in Spain?

Yes, anywhere you choose:

Barcelona, Costa del Sol, Granada, Madrid, Malaga, Mallorca, Seville and Sotogrande; so many great places to choose from.

Conclusion

There are several visas you can apply for if you plan to move and live in Spain. We offer a full overview in our article: Moving to Spain? Spanish visa overview.

However, the king of all visas is the Golden Visa. It is by far the most privileged visa one can attain in Spain. Which explains why the government was under political pressure to suppress them.

Our multidisciplinary team at Larrain Nesbitt Abogados (LNA) has attained hundreds of golden visas (and other visas) over the last decade for our non-EU clients.

At LNA we get you a golden visa in under three weeks.

Take advantage of the Golden Visa, apply today!

Your family’s success is only one call away.

LNA has a 100% track record of attaining Spanish residency

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

Residency services available from LNA:

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

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

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Golden Visa in Spain: 21 reasons to apply

Raymundo Larraín Nesbitt, July, 21. 2024

Raymundo Larrain reviews the outstanding advantages of the Spanish 'golden visa', which can still be obtained despite government plans to abolish it.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 21 years of experience at your service. We offer a wide range of 60 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
21^st of July 2024

Our multidisciplinary team at Larrain Nesbitt Abogados (LNA) has attained hundreds of golden visas (and other visas) over the last decade for our non-EU clients.

But what fills us most, is to see clients leading happy and fulfilling lives with their loved ones in Spain.

At LNA, it’s not about visas, it’s about people.

21 reasons to obtain Spain’s Golden Visa

Security. Safety is taken for granted by modern society. In times of riots, civil strife, and political persecution, security has become an increasingly sought-after commodity. Europe offers a war-free space ideal for young families to raise their children in traditional values. Spain in particular is a safe haven which boasts some of the world’s lowest crime rates. Unsurprisingly, 8 out of the 10 cities with the lowest worldwide crime rates are located within European borders.
Tax benefits. Golden visas do not make you tax resident in Spain (unlike every other visa). This is a unique advantage exclusive only to golden visas. No other Spanish visa shares this unique trait. Only for this reason, affluent investors find golden visas most appealing if they do not fancy paying tax in Spain. However, if you spend more than 183 days, within a calendar year, you may be regarded as tax resident. Some regions in Spain offer ultra-low taxation.
Override the 90/180-day EU Schengen limitation (applies only to Spain). A golden visa allows you unfettered access to Spain. You may enter and leave the country as you see fit, even if flight bans are imposed again for health reasons. For all practical intents and purposes, you are treated administratively in equal footing to a national.
Freedom to travel the Schengen Area (27 European countries). You may spend up to 90 consecutive days (within every rolling 180 days) visiting and travelling throughout the Schengen Area without a visa.
Clear rules. Initially granted for 3 years, then renewable every 5 years.
No minimum stay required (unlike other visas which force you to spend over 183 days/year in Spain).
Expedited. Golden visa applications are fast-tracked by rapport to standard visa applications (which take months). LNA attains golden visas in 3 weeks.
Streamlined. Golden visa applications are (greatly) streamlined, removing unnecessary admin red tape which mars standard visa applications.
Family included as dependants. Even ascendants, such as parents or grandparents (subject to criteria).
Flexibility. You decide if you want to spend more or less time in Spain, no strings attached.
Choice. Golden visas are all about giving applicants choice. You are always in control, you decide, as nothing is imposed unlike in standard visas.
Modern facilities. Spain is a country at the heart of Europe which offers a myriad of facilities and amenities, modern transportation (high-speed trains), state-of-the-art hospitals, and new highways.
Longest-lasting visa. Unlike standard visas in Spain, which are time-gated, golden visas offer the longest times upon application and renewal.
Underaged children may study in Europe. Underaged kids can live and study in Europe, in the company of your partner, whilst you work and earn money abroad.
Return on investment. Take advantage of Spain´s burgeoning real estate market. Property sales have expanded by double-digits in almost every region compared to the same period last year. Property prices are rising sharply spearheaded by Madrid (+17%), Barcelona (+11%), Mallorca (+15%) and selected coastal areas. Low prices and cheap mortgages will not last forever, dip in whilst you can!
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 85 million tourists every year.
Languages. Living in Europe opens up prospects for learning 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), and Spanish (literature & poetry).
You can work in Spain (optional).
Leads to permanent residency after 5 years (optional).
Leads to Spanish citizenship after 10 years (optional).

And last but not least, is the country itself.

Spain has mild weather (with over 300 days of glorious sunshine in coastal areas), friendly natives, unspoilt beaches, excellent food & wine, gorgeous nature, diverse culture, ultra-low tax (in some regions), and stunning architecture with 50 UNESCO World Heritage Sites. I’ve even heard their national football team is passable.

It’s the second most visited country in the world for good reason!

Spain, you will be spoilt for choice.

Conclusion

The Spanish government announced it plans to eliminate golden visas as they are too privileged, as opposed to standard visas. They are expected to be phased out by next year.

Golden visas apply retroactively for any investment made on or after September 2013. You may already qualify without even knowing it! We get you a golden visa in three weeks.

Take advantage of Golden Visa’s 21 benefits whilst you can, apply today!

Your family’s success is only one call away.

LNA, it’s about people.

LNA has a 100% track record attaining Spanish residency

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

Residency services available from LNA:

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

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

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10 easy steps to sell property in Spain

Raymundo Larraín Nesbitt, June, 25. 2024

Raymundo Larrain gives a sweeping overview on how to sell property in Spain safely.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of July 2024

Introduction

Today’s article mirrors last month’s Ten easy steps to buy property in Spain.

The following article aims to be a basic checklist covering what I reckon are the ten basic points, nothing more.

There are two taxes involved on selling Spanish property: Capital Gains Tax and Plusvalia Tax.

I’ve divided my article into five points pre-completion and five points post-completion.

As a word of caution, never hand over your house keys before completion (at the notary). As explained in our article: POSSESSION: why you should never hand over your house keys BEFORE completion.

Ten easy steps to sell property in Spain

I. Pre-completion

1. Hire an estate agent

Estate agents in Spain, for the most part, remain unregulated. This means that anyone can be an agent, but few stand the test of time

Good estate agents are proactive, they prove invaluable as they help to fetch a fair sales price in a short span of time (months). By contrast, bad agents are passive, and your house will be on sale for years.

A seasoned agent will decide on what’s the best market strategy to sell your property giving you all kinds of useful tips. Make sure you take to heart these tips, as they greatly impact on positive property viewings. Always ask your agent for feedback after each viewing, taking action where necessary to turn around negative feedback.

On selling, you need to list your property with a property platform such as IDEALISTA (Spain’s number one) or with one, or more, agents. Be mindful of giving an agent exclusivity on your property unless you are sure of what you are doing.

Hallmarks of reputable agencies:

The estate agency has been around for a long time (years, even decades)
Ask around for referrals from people you trust
Member of RICS, which works to (high) British standards
Member of LPA (Leading Property Agents), or similar
Glowing reviews and stats across multiple platforms (Trustpilot, Google reviews, etc)
Excellent contact network
Superb local market knowledge

Do not trust estate agencies that flaunt shady ’real estate awards’. Every week I'm emailed three of these ‘international awards’ in exchange for money.
Remember, unlike in other countries, estate agents work only for the seller.
Agent’s fees are 100% tax-deductible on selling your property in Spain.

2. Hire a lawyer

Hiring an independent lawyer is the best advice I can give you. If you are a non-resident in Spain (particularly a foreigner), you are strongly advised to instruct a lawyer to assist you through the conveyance procedure. Lawyers are regulated by professional bodies, subject to disciplinary action. Lawyers have professional indemnity insurance in place in the event of malpractice or negligence. Your appointed lawyer can do all the following, and more:

Line up all the required documents
Avoid payment scams
Avoid abusive sales commissions
Avoid possession issues
File a 3% tax rebate
If selling at a loss, filing a tax rebate on the Plusvalia Tax
Dealing with other lawyers, tax office, agents, banks, notary, community of owners, town hall, etc.
Dealing with utility companies (water, electricity, gas, landline, etc)
Discharge a pre-existing mortgage on the property. Buyers demand a clean title, they don’t buy with a mortgage against it
(Greatly) mitigate the seller’s Capital Gains Tax liability (on average reduce your tax bill by 70% or more)
Negate the CGT on reinvesting the sales proceeds on a new main home (even outside the EU i.e. in the United Kingdom).

Lawyer’s fees are 100% tax-deductible on selling your property in Spain.

3. Price to sell

It’s of critical importance a seller adjusts the asking price to match market expectations.

I understand - and it is perfectly human - that owners have a penchant towards overpricing their property, all the while overlooking its flaws. However, if you want a smooth sale within a reasonable timeframe (3 months), you must pick an asking price that matches a realistic valuation. Otherwise, you can be waiting for years on end until the property is sold. It is not uncommon to hear people have waited over a decade to sell in Spain (because they did not price the property correctly).

In my professional experience, properties that have been on the market for too long (6 months plus) become a stale listing which acts as poison; would-be buyers start wondering if there is something wrong with the property which drives the sales price in a downward spiral. Unrealistic pricing leads to long sales times.

Remember, be smart, price to sell.

4. Tax compliance

It is strongly advised that sellers are up to date with their tax and maintenance expenses. If you are in arrears with your taxes, this may impact adversely your tax rebates post-completion (see below).

Buyers, on running a due diligence on the title, will get a poor impression when a seller has fallen in arrears. Moreover, in some cases, falling in arrears may even jeopardise a house sale i.e. when a buyer needs a mortgage loan to complete (lenders do not borrow against properties with debts).

5. Documents to sell

As mentioned in the first point above, your lawyer can (greatly) assist you in collating all the necessary paperwork to sell.
The following list is not exhaustive:

Full scanned copy of your title deed
Copies of your national ID, passport, NIE number
Copy of recent utility invoices
Copy of IBI tax invoices
Copy of Refuse Charge (Basura, in Spanish)
Energy Performance Certificate
Licence of First Occupation
Scanned copies of the minutes of the last three General Assemblies
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)
Etc.

If all the above points check out, you are ready to roll. A property sale follows three stages in Spain:

Sign a reservation contract: in exchange for getting paid €3,000 or €6,000 (dependent on the sales value) you reserve the property over the next 30 days, during which the sales contract must be signed. This is a simple one-page document drafted by the listing estate agency.
Sign an arras contract (sales contract): the buyer makes a non-refundable 10% deposit. This detailed contract stipulates a day and time to sign at a notary plus all the sales conditions. This contract is drafted by the buyer’s lawyer.
Completion at a notary office. The balance of the asking price is paid and the keys are handed over (possession).

II. Post-completion

6. Capital Gains Tax mitigation

CGT for non-residents is 19%. Again, your lawyer will assist you in gathering all the necessary paperwork to bring down your CGT liability on selling, within the law. Your lawyer can reduce your tax bill by 70%, or more. This is explained in detail in our article Capital Gains Tax mitigation on selling (or gifting) property in Spain.

7. Plusvalia Tax rebate

If you are selling at a loss, you can file a tax rebate on the Plusvalia Tax you’ve paid.

8. 3% tax rebate

By law, buyers withhold 3% of the sales proceeds if a seller is a non-resident. A lawyer can file a tax rebate on the seller’s behalf on all, or part, of the 3%. If a seller is in arrears with his property taxes, this precludes a tax rebate. This is explained in our taxation article: How to file a 3% tax rebate on the sales proceeds of your Spanish property.

9. Serve legal notice to your community on the house sale

Your lawyer can notify them on your behalf. The reason on why this is necessary is so that all the new invoices they raise are against the buyer, not against the seller. This ringfences your liability.

10. Closing your Spanish bank account & dealing with transfer of utilities

Your lawyer can advise you on this. If you close your account too early, you will jeopardise the tax rebates from the Spanish Tax Office (meaning you lose all your tax refunds!).

Again, your lawyer can ensure the utilitie's contract transfer is smooth, avoiding payment issues or supply disruption.

Conclusion

If you plan to sell property in Spain, and are a non-resident, contact us to assist you in the legal procedure. We act nationwide.

At LNA we make it all easy, so you just have to sit back and relax. We take care of everything removing all the associated stress.

Not to mention our fees are 100% tax-deductible on selling!

21 years of experience at your service.

Related services available from LNA:

“Même s'il me faut lâcher ta main / Sans pouvoir te dire à demain / Rien ne défera jamais nos liens (...) L'amour est plus fort que le chagrin.” – Françoise Hardy

Françoise Madeleine Hardy (1944 – 2024). Born in Paris, was a gifted French singer-songwriter and actress. Mainly known for singing melancholic sentimental ballads (Tous les garçons et les filles), Hardy rose to prominence in the early 1960s as a leading figure of the yé-yé wave, and went on to become a cultural icon both in France and internationally. In addition to her native French, she also sang in multiple languages. Aussi belle que douée.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Ní neart go cur le chéile. VOV. Soyez réalistes, demandez l'impossible.

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

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10 easy steps to buy property in Spain

Raymundo Larraín Nesbitt, May, 30. 2024

Raymundo Larrain gives a sweeping overview on how to buy property in Spain safely.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 21 years of 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.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of June 2024

Introduction

The following article aims to be a basic checklist covering what I reckon are the ten basic points, nothing more.

I have greatly abridged it, not going into detail on whether you are buying resale or a new build property, or between commercial, urban, or rural land.

If you fancy a more in-depth and fleshed out guide on how to buy property in Spain safely, I refer you to our detailed Homebuyer’s Guide in Spain.

Ten easy steps to buy property in Spain

1. Hire a lawyer

If you are a non-resident in Spain (particularly a foreigner), you are strongly advised to instruct a lawyer to guide you through the procedure. Your appointed lawyer will run a due diligence on the property ensuring you acquire a clean title with no outstanding debts or taxes.

Your lawyer requires a Power of Attorney. A PoA enables a lawyer to act on the buyer’s behalf:

opening a bank account
applying for a NIE number
apply for a mortgage loan (in Spain, by law, a borrower is required to pass a multiple choice test to qualify, your lawyer can take the test for you)
drafting & signing legal documents on behalf of the principal
filing property taxes
connecting utilities
dealing with a community of owners

Beware of anyone telling you that hiring a lawyer is unnecessary, you can be sure they have vested interests of their own.

2. Apply for a NIE number

A NIE number is a tax identification number for foreigners which identifies you before the Spanish Tax Office and allows you to file and pay taxes in Spain. A NIE number is an essential admin document that everyone in Spain will be asking for: banks, schools, town halls, healthcare etc. It’s a must-have; the sooner you get it, the better. We can get you a NIE in 2 weeks.

3. Open a bank account

Opening a bank account in Spain is required on buying property (or when you apply for a visa). Utility companies and Spanish health providers only accept Spanish accounts to domicile payments. You will be required to attend the bank in person to open an account.

4. Do you need a visa?

If you are an EU national, as a general rule, you do not need a visa to stay in Spain. However, if you plan to spend more than 90 consecutive days in Spain, you must apply for a residency permit. This is fast-tracked for all EU nationals, attained by us in under one month.

If you are a non-EU national, as a general rule, you are required to attain a visa to remain in Spain for more than 90 consecutive days. Some visas must be applied for from your home country (before travelling to Spain), yet others can be applied for from Spain. You can read our comprehensive Spanish visa overview for more details.

5. Reservation contract

Once you’ve decided on a property, you need to commit.

Typically, an estate agent listing the property will ask you to pay €3,000 (or €6,000 for more expensive properties). This is normal, don’t worry. Unlike in other countries, such as in the United Kingdom, there is no 14-day cooling-off period. Reservation deposits are non-refundable (unless expressly agreed and worded otherwise in the contract).

A reservation contract is a simple one-page document whereby the seller reserves a property for you over the next 30 days in exchange for a deposit. If you go ahead and complete, the deposit will be part of the sales price. If you decide to pull out, you lose the deposit.

6. Hire a surveyor

We strongly advise buyers to hire a property surveyor, particularly on buying rural property or on buying off-plan property. Surveyors draft a comprehensive report with a detailed snagging list. This report is very useful and can be used to detect build flaws and re-negotiate the sales price. We advise surveyors to be registered with RICS, which works to high professional standards.

7. Exchanges - signing an arras contract

Signing an arras contract requires you to pay 10% of the asking price. This amount is non-refundable once signed and paid.

If the buyer pulls out of the contract – for whatever reason – they lose the 10%.

If a seller pulls out of the contract – for whatever reason – they pay 20% of the asking price (as a penalty).

Signing an arras contract is a (very) serious matter. Under no circumstances should a buyer sign it without a lawyer. Depending on how they are worded, some of these contracts actually force buyers to pay the full property price! Even if they do not want to. You can be taken to court over this contract.

8. Completion

Normally, 30 to 45 days after signing an arras contract, depending on whether the buyer requires a mortgage loan or not, the parties need to attend a notary chosen by the buyer to sign a Title deed (escritura, in Spanish) witnessed by a notary public. The buyer will now pay the balance of the asking price and possession will be his (keys hand over).

9. Property registration

After you sign at a notary, you need to pay the associated Property Transfer Tax. The Title deed must then be lodged at a land registry by your lawyer. This usually takes 1 to 2 months, depending on how busy the registrar is at the time.

It is important to understand that if a property is not registered under a buyer’s name, he does not legally own the property, even if he signed a Title deed.

The main reason is because Spain follows a two-tier system of transfer of ownership (notary and land registry). For peace of mind, ownership of a property can be verified in under 24 hours on commanding a nota simple service from us. A nota simple is a land registry report.

10. Post-completion

Post-completion, a buyer still has to deal with a long to-do list.

Your lawyer can (greatly) assist you in cutting through all the below red tape saving you money, time, and aggravation:

Utilities: Your lawyer can connect you to the mains (water & electricity). Also, to internet, gas, and landline. We offer this utility connection service.
Taxes: on owning a property in Spain you will be required to pay for a series of taxes, both local and national. As local taxes, you have to pay IBI and garbage collection tax. As a national tax, non-resident property owners need to pay once a year what is known as imputed rental income tax (even if you do not rent out the property, it’s a notional income tax). Failure to pay some of these taxes will lead to embargoes (legal charges placed against your property) which may result in your home being impounded and sold off in a public auction. We offer this tax service.
Padron: If you plan to live in Spain, you must enrol in the town hall census (padron). This is known as empadronarse or empadronamiento in Spanish. This is required to access public healthcare, vote on local elections, apply for a mortgage loan, schools, etc. We offer this padron service.
Community of Owners or EUC: If you buy a property within an urbanizacion, or development, you will need to join the community and pay your fees. These are normally paid quarterly. Non-payment may lead to the community suing you.
Making a Spanish will. On owning property in Spain, it is strongly advised you make a Spanish will. A Spanish will safes your beneficiary's time, money, and aggravation at a time of bereavement. A Spanish will does not preclude one made in your home country, it only affects your Spanish estate. Ideally, foreigners should make two wills; one in their home country and one in Spain disposing of their Spanish estate. We offer this will-writing service.

Conclusion

If you plan to buy property in Spain, and are a non-resident, contact us to assist you in the legal procedure.

At LNA we make it all easy, so you just have to sit back and relax. We take care of everything removing all the associated stress.

Not to mention our fees are 100% tax-deductible on selling!

Related services available from LNA:

At Larrain Nesbitt Abogados (LNA) we have over 21 years’ experience specializing in immigration & residency visas. We also assist clients buying, selling, or renting properties in Spain. You can contact us by e-mail at info@larrainnesbitt.com, by telephone at our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

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

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Moving to Spain? Spanish visa overview

Raymundo Larraín Nesbitt, May, 1. 2024

Raymundo Larrain gives us a sweeping overview of the Spanish visa system. If you are a non-EU national, and plan to move to Spain, this article is for you.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 21 years’ of 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.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of May 2024

Spain is the second most visited country in the world, with over 84 million tourists every year. It’s a beautiful country to visit or live in. Gorgeous weather, great food, affordable prices, great amenities, and ultra-low taxation (in some regions of Spain) appeal to foreigners at large. Many of these tourists decide to settle down and buy a property in Spain.

In recent years, Spain has introduced two new immigration schemes with significant tax advantages associated for those that qualify: Beckham’s Rule (named after the English football player) and also the Digital Nomad Visa.

Both of these allow applicants to pay NO tax on any assets or income held abroad. Moreover, on the income derived strictly in Spain, applicants pay only a flat fee, which is a mere fraction of the standard tax rates. These two immigration schemes have been purposely devised to attract foreign overachievers, so they relocate to Spain alone, or with their families. Due to their unique tax advantages, they are proving wildly popular amongst foreign applicants, both EU and non-EU respectively.

At LNA, we can help you attain a visa or residency permit to live in Spain legally in record time at an affordable price. Your case will be handled by one of our immigration lawyers assisted by one of our in-house visa managers.

General requirements for Spanish visas

The following five are staple requirements across all visa types:

Non-EU national
Hire private health insurance
Clean criminal record, no trace (previous 5 years)
Be self-supporting (you will not claim benefits from the State)
Not be living in Spain illegally at the time of making the visa application

Spanish visa overview

Spain offers five visas for non-EU nationals. At LNA, we can assist you in filing all five below.

Some visas will suit applicants better than others. Some offer unique tax advantages.

1. Golden Visa – Investor Visa

Spain’s Government announced on the 8^th of April 2024 they will be scrapping this visa. However, it will take them many months to implement this change (likely by Autumn). For those who are still interested, you should apply now whilst you still can.

The investor visa is thought for affluent non-EU applicants. It is popularly known as a ‘Golden Visa’. It’s a blue-ribbon visa that basically rolls out the red rug for its privileged holders that neatly cuts through all the red tape. Its purpose is to foster foreign investments in Spain. Whilst there are many different ways to attain a GV, the most popular (and least expensive) is by investing in Spanish real estate. This requires investing €500,000 in property.

We should point out that it applies retrospectively; meaning that any non-EU national that bought a property in Spain for over 500k on or after the 28th of September 2013 may qualify. The investment in property can be made either as a physical person or as company. Alternatively, you can also deposit €1mn in a Spanish bank (no need to invest it), or you can invest €2mn in Spanish listed shares. All three ways will allow you to qualify for a coveted golden visa.

Unlike the other four visas listed below, renewals are not tied to proving you live in Spain all year round. They are based on keeping the investment. This ability to override the 90/180-day rule and not being ‘forced’ to live in Spain, make it one-of-a-kind visa and goes on to explain why it is highly sought-after by affluent individuals.

Another point to consider, is that the Golden Visa is the ONLY visa in Spain which does not make you tax resident in Spain on applying for it. GVs allow you the right to work in Spain (optional). This visa is attained by us in under 3 weeks.

Suitable for:

Affluent applicants who invest €500,000 in Spanish real estate.
Affluent applicants who deposit €1mn in a Spanish bank.
Affluent applicants who invest €2mn in Spanish Teasury bonds, or €1,000,000 in shares of publicly trading Spanish companies.

Further reading: Spanish Golden Visa Explained

2. Digital Nomad Visa (tax-free visa)

Spain’s Digital Nomad Visa (DNV) was approved in December 2022. The DNV is extensive to family members i.e. spouse and children under the age of 18 years old.

It allows applicants to work remotely from Spain i.e. teleworkers. The main advantage of a DNV is its privileged taxation. It grants its applicants a special tax regime whereby they pay very few taxes as opposed to the standard tax rates that apply to Spanish tax residents.

The main two tax advantages open to successful DNV applicants are:

No tax on assets & income held abroad. This is of special interest for applicants holding substantial wealth and interests abroad Spain (i.e. HNWIs), which would go untaxed by Spain.
A flat tax rate of 24% on any income derived strictly in Spain.

Please contact us if you wish to pursue a DNV. This visa is attained by us in under 3 weeks.

Suitable for:

• Teleworkers
• Digital nomads
• Self-employed (freelancers) who manage their business remotely
Further reading: Tax Advantages of Spain’s Digital Nomad Visa

3. Marriage Visa – EU Family Regroupment

It’s intended for families or couples that have been separated, in and out of the EU. It seeks to reunite them in an expedited manner within the EU. So, although this type of visa is popularly dubbed as ‘Marriage Visa,’ it would rather be more appropriate to label it as ‘Family Visa’. Unfortunately, the term 'Marriage Visa' has caught on and sounds more catchy, so we will just stick to that for simplicity's sake.

Its scope goes well beyond a married couple. It ought to be understood in broader terms, as in family reunion. As its own name implies, couples must be married (including same-sex partners), this is the core requirement. Alternatively, it can also be a civil partnership. This visa allows you the right to work in Spain. This visa is fast-tracked, we can get it in one month.

Suitable for:

Separated family members that wish to reunite within the EU
Married couples

Further reading: EU-Family Regrouping (Marriage Visa)

4. Business Visa – Lucrative Visa

As its own name implies, this permit allows the applicant to work in Spain as you will be self-employed. This residency applies to someone who is looking to set up his own business in Spain. Typically, you will be acting as a director or managing director overseeing the company. Needless to say, one of the key requirements is that you will have enough means to be self-supporting, both for yourself and your family for one year.

The catch, besides a cast-iron motivation, is that you need to invest in the ballpark of €80,000 to €100,000 to open & run a business in Spain. You will also be required to hire employees (the cornerstone of this visa). This visa allows you the right to work in Spain as self-employed.

Suitable for:

Applicants (families) wishing to set up and run a business in Spain
Self-employed
Dauntless entrepreneurs

Further reading: Lucrative residency permit (Business Visa)

5. Non-Lucrative Visa – Pensioner’s Visa

As its own name implies, this visa allows applicants to live, but not to work, in Spain. If you are working, or plan to work in Spain, you will be stripped of this visa. Only pensioners should apply for it.

The applicant will be expected to be self-supporting and will be required to prove he or she has enough savings for at least two years. This visa is ideal for retirees who wish to spend extended periods of time in Spain – without working – enjoying the finer things in life.

This visa is available from us from only £300.

Suitable for:

Pensioners
Would-be buyers, long-term tenants
Bon vivants

Our law firm has a track record of 100% attaining Spanish visa & residency permits since 2013. We have assisted hundreds of individuals and their families.

Residency services available from LNA:

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

At Larrain Nesbitt Abogados (LNA) we have over 21 years’ experience specializing in immigration & residency visas. We also assist clients buying, selling, or renting properties in Spain. You can contact us by e-mail at info@larrainnesbitt.com, by telephone at our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

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

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How to file a 3% tax rebate on the sales proceeds of your Spanish property

Raymundo Larraín Nesbitt, April, 3. 2024

Raymundo Larrain explains how a non-resident seller is entitled to a tax rebate on his sales proceeds

Marbella-based Larraín Nesbitt Abogados (LNA) has over 21 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.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of April 2024

Introduction

Non-residents selling property in Spain undergo a 3% retention which is practised on the sales proceeds. This money is withheld by the buyer (or his lawyer) which is then transferred to the tax office.

Unbeknownst to most people, sellers are legally entitled to apply for a tax rebate on the full 3% of the sales proceeds providing they have sold at a loss, or have broken even.

This procedure is technical, meaning it requires the input of a seasoned lawyer to file this tax rebate (a seller cannot do this on his own).

Additionally, a seller is also entitled to legal interest when the tax office takes longer than usual to repay the withheld sales proceeds. This can be rather substantial, and most certainly higher than what any high street bank is paying savers nowadays for their deposits!

Surprisingly, most sellers are oblivious to this rebate and never bother to ask for their money back, which is lost!

3% retention explained

The purpose of this retention is to act as guarantor of a seller’s Capital Gains Tax liability on selling property in Spain. If a seller makes a profit, he must pay CGT. The 3% ensures sellers will not be doing a ‘runner’.

However, not all sales make a profit. Moreover, you would be surprised to learn that after adding all the associated costs and expenses most sellers are breaking even! Which would mean they are all entitled to apply for this tax rebate.

When you add up the associated conveyance expenses (both on buying and selling the property), the associated taxes, professional fees due (estate agent, notary, land registry, lawyer), and improvements on the property over time it is often the case that sellers are breaking even, or even making a loss, however small.

When you sell at a loss, or break even, the 3% retention is no longer justified legally. Meaning, the seller has a legal right to claw it back from the Spanish Tax Office, plus interests on top!

Procedure

As mentioned, on selling property in Spain, a 3% retention is practised on the non-residents’ sales proceeds at completion. For example, on selling a €500,000 house, €15,000 will be withheld by the buyer at the notary’s office.

Following completion, this retention is paid by the buyer to the tax office.

Depending on whether a profit or loss was made, the seller’s lawyer can apply for a tax rebate on the full, or part of the €15,000. Additionally, contingent on how long the tax office takes to pay the rebate, legal interests accrue, which can be quite substantial over time.

Law firm LNA helps you getting your money back

At LNA, we have assisted thousands of sellers getting their money back over the last two decades.

We offer the following competitive tax service: Calculating seller’s taxes

We offer a highly demanded tax service to calculate seller’s taxes (Capital Gains Tax and Plusvalia Tax) without having to instruct us on the conveyance. This includes filing a seller’s 3% tax rebate.

You can of course also hire us to handle your conveyance too, we act all over Spain.

Our team of pro-active lawyers will get your money back within months.

Our fee is tax-deductible from your seller’s taxes, meaning you pay even less taxes!

Conclusion

If you plan to sell your property in Spain, and you are a non-resident, you can contact us to recover your money in a timely manner.

Don’t let your money go to waste! It is your seller’s right to recover this money, your money.

Because every penny counts.

Contact us at LNA if you need us to calculate your seller’s taxes, and/or want us to file a tax rebate for the 3% on your behalf. Tax rebates are usually paid within months.

“Steinway grand pianos are the best in the world.” — Maurizio Pollini

Maurizio Pollini (5 January 1942 – 23 March 2024). Was an Italian pianist and conductor. He was known for performances of Mozart, Beethoven, Chopin, Debussy, among others. A staunch left-wing activist in the 1960s and 1970s, he would remain politically engaged in later life. He maintained a separation between his ideals and his music magic. Maestro.

Related tax and legal services available from LNA:

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

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Luxury rentals in Spain explained

Raymundo Larraín Nesbitt, March, 4. 2024

Lawyer Raymundo Larrain explains luxury rentals and their unique legal advantages.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of March 2024

You are probably aware of Spain’s Tenancy Act (LAU, in Spanish). This law is somewhat infamous because it (over)protects tenants (read biased) at the expense of landlords’ rights. The logic behind this is that lawmakers view tenants as the weak party in need of protection. Thus the LAU is heavily biased towards tenants to the point it crosses a thin red line and may even act as a deterrent cutting down the supply of suitable rented accommodation (specifically long-term), which in turn drives rental prices further up harming tenants. The law of demand and supply at work.

You will have likely heard that *all* long-term rental contracts in Spain are subject to the LAU, right? Well, not true. Meaning landlords can take advantage of legal loopholes to neatly circumvent lenient LAU tenant entitlements. Nuances are at play.

A number of rental contracts fall outside the remit of Spain’s Tenancy Act, such as seasonal contracts, holiday rentals, accommodation for military personnel, luxury rentals, and more. Today’s short article is going to focus on the latter, on luxury rentals. Known in Spanish as alquileres suntuarios.

In plain English, luxury rentals fall outside of the scope of Spain’s infamous LAU, which opens up a slew of advantages for landlords. In effect, luxury rentals give landlords the upper hand, as they are able to legally override all the pesky tenant entitlements laid out in the LAU.

What conditions need to be met for a rental contract to qualify as a luxury rental?

In short, either of the two:

The property rented is 300 m², or larger.
The monthly rental exceeds 5.5 times the average minimum wage. For 2024, that’s a €7,300/month rental.

If one, or both, of the above conditions are met, the rental contract is excluded from the protection of the LAU.

What legal significance does this have?

In short, a lot.

Basically, it means that all the thoughtful entitlements the LAU meticulously lays out for the protection of tenants do not apply. Meaning landlords are greatly favoured because all the lenient entitlements and rights the LAU rules on are waived legally, leaving the contract to be ruled only by the will of the parties. The legal significance of this is huge, as it basically conveys a huge leverage to landlords, if they play their cards right.

This is done because our lawmakers surmise that a luxurious rental contract is signed by a tenant who is either a shrewd businessman or an affluent person; either way someone who does not warrant the protection of our (biased) tenant laws, such as the LAU.

Advantages of luxury rentals: practical examples

Unlimited security deposits. Standard long-term contracts, subject to the LAU, are capped at a one-month security deposit (fianza, in Spanish). In luxury contracts, landlords are free to demand, for example, the equivalent of a full year’s rental in advance, or more, as a security deposit.
Freedom to terminate contracts. In standard long-term contracts, subject to the LAU, you can pull out only after 6 months have passed. In a luxury contract, you may pull out at any time, even on the following day.
Heavy penalties apply to early terminations. Following on the above point, in a standard long-term contract it could be agreed that if a tenant pulls out after 6 months a capped penalty applies which equates to the months left to complete a full year, on a pro rata. That, by law, would be the maximum. However, on luxury contracts there is total freedom; a tenant could be liable for all the rentals left to complete a full year. I.e. over €100,000 if you pull out a week after signing for whatever reason!
Standard eviction rules do not apply – evictions are (greatly) expedited. As opposed to standard rental agreements, where a tenant is regarded as the weak party and in need of legal protection, in luxury rentals both parties are viewed and treated as equals. This translates in practice to landlords being able to instigate fast-tracked eviction procedures that only last a couple of months, as opposed to standard ones, which under new laws, can take up to several years. In short, evicting tenants in luxury rentals follows an expedited procedure that lasts months, not years.

Conclusion

If you plan to sign up for a luxury pad in Spain, whether a villa or a penthouse, you are strongly advised to take legal advice before signing on the dotted line. Spending a few hundred euros in a lawyer’s advice can save you from losing, or being sued, over €100,000, or more!

From a landlord’s perspective, luxury rentals are a win-win. The freedom this type of contract confers landlords on wording clauses cannot be overstated enough. Landlords are normally constrained to work within the narrow legal framework and limitations of the LAU in standard lease agreements. By contrast, luxury rentals allow total freedom to landlords, placing them in a position of great power.

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

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