Buying property in Spain

Raymundo Larraín Nesbitt, September, 9. 2022

Lawyer Raymundo Larrain gives us a brief overview on buying property in Spain.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted. 

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of September 2022

Introduction

September marks the end of the summer and the start of autumn. Autumn is the high season for property purchases. Traditionally the best months for property sales are September, October, and November.

As we have highlighted in multiple articles over the last two years, there is a property boom ongoing in Spain. Property prices have strongly rebounded post-pandemic.

  • Capital appreciation has risen by 8.5% for resale property across the board and over 10% for new builds (off-plan). In coastal areas, and large Spanish cities, it’s actually a two-digit property rise! Bottom line, property prices have risen in Spain reaching all-new highs!
  • Rental yields are also growing by two digits year-on-year. Long term lets offer a net yield of 4.5% per annum, whereas short-term rentals (holiday homes) are far more profitable, delivering a two-digit return.

 

Pro-tip: The combination of both capital appreciation and soaring rental yields translate into a combined yield of over 10% per annum! No other safe investment offers such high returns.

In some regions of Spain, regional authorities have (dramatically) lowered the taxes associated to buying property in a bid to foster an economic recovery post-pandemic. For example, Andalusia slashed by 20% its tax on off plan and from 13% to 30% in resales (contingent on the asking price; the higher the price, the more tax you save). Indeed, it’s a great moment to seize the opportunity and save dozens of thousands in tax money!

Our law firm, Larraín Nesbitt Abogados, published a detailed (free) guide to buy property in Spain. Simply follow the link supplied: Guide to buy property in Spain

Conclusion

Spanish real estate is poised for combined two-digit gains over the next year, interest rate fluctuations notwithstanding, easily trumping alternative investments (bonds, commodities, cryptocurrencies, gold, etc) and paltry fixed returns in a context of historic ultra-low interest rates.

If you are thinking of buying (or selling), please contact us. We have 20 years’ experience buying & selling property. Our friendly staff can guide you safely through the procedure.

We offer this service:

Conveyancing in Spain – Buying

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

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

Article also published at Larraín Nesbitt Abogados: Buying property in Spain

 

“If you are not moving forward, you are moving backward.”  Mikhail Gorbachev

Mikhail Sergeyevich Gorbachev (1931 – 2022). Was a Russian statesman who served as the last leader of the Soviet Union from 1985 to the country's dissolution in 1991. Domestically, his policy of glasnost ("openness") allowed for enhanced freedom of speech and press, while his perestroika ("restructuring") sought to decentralize economic decision-making to improve its efficiency. Internationally, he avoided WWIII and nuclear armageddon, in tandem with US President Ronald Reagan, on kickstarting the most ambitious denuclearization treaty to date (START). Despite being broadly scorned in his home country (because he proved instrumental in dismantling the dreaded U.S.S.R. empire and the collapse of the Iron Curtain), the West, and most of the free world, widely regards him as one of the greatest Russian president ever. Gorbachev was a peacemaker who brought freedom and democracy to one of the greatest countries in our planet. In 1990 he was bestowed the Peace Nobel Prize. He left our world a better place.

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 and/or financial advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Buy-to-Let: Landlord’s tax reliefs

Raymundo Larraín Nesbitt, August, 1. 2022

Lawyer Raymundo Larrain explains how non-resident BTL landlords can GREATLY benefit from tax allowances dramatically reducing their landlord tax bill (on average by 70%, or more).

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted. 

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of August 2022

Introduction

August. It’s again that month of the year when everyone is enjoying their holiday break and landlords in Spain are – once more – making a killing through rental income.

Have you tried booking a flat for July, August, or September? Sorry, all taken!

One of the best, if not the best, business in Spain over the last 7 years has been to buy a property with a view to rent it out (buy to let), specifically as a holiday home (short-term).

Property prices in Spain have strongly rebounded post-pandemic (since 2021). We are witnessing an annual capital appreciation of 8.5% for resale property across the board and over 10% for new builds (off-plan). In coastal areas, and large Spanish cities, it’s actually a two-digit property rise! Bottom line, property prices have risen in Spain for 12 consecutive months reaching all-new highs!

In addition to the above, rental yields are also growing by two digits year-on-year. Long term lets offer a net yield of 4.5% per annum. Short-term rentals (holiday homes) are far more profitable, delivering a two-digit return.

Spain ranks as the world’s second tourist destination, trailing only behind the United States of America, with over 84 million tourists a year. The strong demand for tourist accommodation in Spain grows every year, pushing up home prices. The prospect of investing in Spain looks brighter than ever.

Pro-tip: The combination of both capital appreciation and soaring rental yields translates into a combined yield of over 10% per annum! No other safe investment offers such high returns.

Spanish real estate is poised for combined two-digit gains over the next year, interest rate fluctuations notwithstanding, easily trumping alternative investments (bonds, commodities, cryptocurrencies, gold, etc) and paltry fixed returns in a context of historic ultra-low interest rates.

But wait, it gets even better!

Now that I have made a case on why buy-to-lets are indeed an excellent investment in Spain, I want to focus mainly on the HUGE tax advantages open to all non-resident landlords. Read on.

Tax deductions available to all non-residents apply to both short-term rentals (holiday homes) and long-term rentals

Non-resident landlords can take advantage of huge tax breaks on their landlord tax bill.

In plain English, landlords can expect to reduce their tax bill by 70%, or more, on filing their quarterly rental income tax using our accountants.

Please be advised that to take full advantage of the below-listed tax allowances you need to instruct a specialized accounting firm – such as us – with over 20 years experience in non-resident taxation. Irresponsibly self-filing tax returns, without taking proper tax advice, leads to costly mistakes with huge fines being levied.

2022 non-resident tax calendar

You must file a tax return in Spain if you rent out your property in one of the below tax quarters:

  • Q1: January – March.
  • Q2: April – June.
  • Q3: July – September.
  • Q4: October – December.

Requirements

In order to benefit from generous landlord tax relief, three requirements must be met:

  • Landlord is tax resident in the European Union or EEA (your nationality is irrelevant).
  • The expenses you claim are in direct relation towards the upkeep of the property (see tax relief list below) i.e. claiming travelling expenses would be excluded.
  • You store VAT invoices to back up your tax relief claim.

Landlord tax relief

As an example, non-residents in Spain may deduct the following expenses from their quarterly tax returns (open list):

  • Interests arising from a mortgage loan (to buy the property).
  • Local taxes and administrative charges and surcharges.
  • Expenses arising from formalising lease agreements.
  • Maintenance costs may be offset; however, refurbishment expenses (improvements) are excluded (but may be claimed on selling the property to dramatically reduce the seller’s CGT bill).
  • Community of owners’ fees.
  • Home insurance premiums.
  • Property repairs: plumbing, roof retiling, painting, pool pump etc.
  • Utility invoices: electricity, water, gas, internet, and landline.
  • Cleaning.
  • Concierge, gardening, alarm & security services (i.e. gated communities).
  • Lawyer’s fees: are 100% tax-deductible! Yes, our fees are also tax-deductible. I.e. to calculate and submit you quarterly tax returns.
  • Property management fees.
  • Advertising invoices from property portals, such as Idealista: online/offline.
  • Marketing expenses.
  • Home depreciation and amortization.
  • Etc.

 

Conclusion

Our clients are reducing their tax bills on average by 70%, or more, every tax quarter on renting out in Spain through us. 

Call or e-mail us, our friendly staff will be delighted to guide you through the procedure and explain how we can assist you by greatly reducing your tax bill.

These taxes are filed online nationwide. So, regardless of where your property is located in Spain i.e. Mallorca, Marbella, Barcelona, Valencia, Madrid, Sotogrande, etc, we can file them for you at a very competitive fee:

  • EU resident: 125 euros plus vat
  • Non-EU resident: 75 euros plus vat

To close, a gentle reminder that our accounting fee is tax-deductible!

If you want to pay less tax, please contact us.

We offer this accounting service:

Holiday Rental Accounting Service (HRAS)

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

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

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 and/or financial advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Selling the bare ownership and cashing in!

Raymundo Larraín Nesbitt, July, 4. 2022

Lawyer Raymundo Larrain briefly explains how to cash in on your property, releasing the pent-up equity. This is attained on selling the bare ownership of your property and retaining a usufruct right.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted. 

 

 

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of July 2022

Introduction

It has become apparent that we have fallen on hard times. The ongoing war in Europe (which threatens contagion to neighbouring countries), the unbridled two-digit inflation, tax hike, hike in petrol, hike in electricity & gas, the ongoing Covid-19 restrictions, and more all add up to our woes!

But none fair harder than those in their twilight years. They are hands down the most affected collective with all that is going on.

Many senior citizens struggle to get by on low pensions given the unrestrained rise of prices (two-digit inflation!). All they know is that after a life of hard work and sacrifices they can afford every month fewer things on the same fixed income (pension).

But precisely, because of their age, they can turn this round to their advantage. Seniors are likely sitting on properties which value has gone up substantially over the previous years. Property prices in Spain have appreciated for eleven consecutive months, hitting all-time highs in some cities, such as Madrid. Property sales are at the highest numbers since 2007.

Moreover, in a high inflationary context, money experts strongly advise investors to buy property (tangible assets) to hedge themselves against rising inflation, so their property values are bound to increase even further over the next years, interest rate fluctuations notwithstanding.

What’s the point of living in a 500k property if you can’t treat yourself to fancy restaurants, from time to time, or even book some luxury holiday abroad? Or maybe you need to release equity to finance an expensive medical treatment for your loved ones.

It is my experience that elders often live in a permanent disconnection between what their properties are valued at and their spartan lifestyles, often struggling silently to get on by on low pensions. In this month’s article, I shed light on a legal method that reconciles both, allowing seniors to take full advantage of their real estate, opening their locked wealth by allowing them the freedom to enjoy life as they deserve in their twilight years, without struggling every month to make ends meet.

Unbeknownst to them, there is legal a way to tap into their build up wealth without needing to sell their property, much less leave their home!

This is known as selling the ‘bare ownership’ to an investor whilst retaining a ‘life usufruct’ on the property. This is a legal procedure witnessed by a notary. In simple terms, bare ownership grants ownership of a property but does not grant possession.

PROS

  • The seller is allowed to remain in the property for as long as they live. In other words, the seller retains the possession. This, for senior citizens, is a huge plus as they will not have to renounce to their lifestyle or surrender the keys of their house for the remainder of their lives.
  • The seller immediately accesses a large pool of money which they can use as they see fit: for medical expenses, lavish holidays, fancy restaurants, or simply as a well-deserved improvement to their lifestyle in their twilight years.
  • The seller no longer needs to trouble himself with paying property taxes or community charges, it now falls on the investor to pay for them all.
  • The owner avoids enduring all the associated hassle, stress and aggravation of a standard property sale but reaps all its benefits!
  • You will only need to pay electricity and water bills.
  • The seller can in fact rent out the property, or part of it (i.e. rooms), and pocket the money!
  • The seller can in fact also sell his usufruct right, if needed be, to raise even more money!
  • This procedure allows you to supplement and bolster a meagre state pension.

 

CONS

  • You will receive slightly less money than its market value.
  • If the seller has children, they will receive less by way of inheritance.

Requirements:

  1. Are you 65 years old, or older?
  2. Have you attained a Spanish residency permit?
  3. Are you tax resident in Spain? Have you filed Spanish tax returns previously?
  4. Is your property worth 150,000 euros, or more?
  5. Is your property classified as urban (not rustic land)
  6. Have you been empadronado in your Spanish property over the previous three years?

Conclusion

Selling the bare ownership is a (very) smart way of cashing in on the accumulated wealth of your property without relinquishing your lifestyle. Because in truth, you won’t notice any difference other than sitting on a large pile of money! You will still live in the same property for the remainder of your life.

This procedure is ideal for senior citizens who are asset rich, but cash poor.

For a seller, it’s a win-win as you get to keep your property (whilst you live) and you also have access to a large pile of cash with which you can do as you please.

For an investor, it is a win-win as they get to buy a property below the market value (BMV) and also do not pay inheritance tax or plusvalia tax on receiving the possession of the property in the future.

If you have grown tired of struggling financially every month, and wish to put an end to your endless nightmare, just give us a buzz. Our friendly staff will guide you through the procedure.

We can advise and represent you, to secure it, and sign the notary deed. Your only concern going forward will be what to do with so much money in your bank; it will be up to you!

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

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

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.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Sotogrande, the pearl of Cadiz

Raymundo Larraín Nesbitt, June, 6. 2022

Lawyer Raymundo Larrain sheds some light on what makes Sotogrande special and why you should buy property there.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted. 

Inset photo: The 40th anniversary of Sotogrande’s Gold Cup where team Las Monjitas defeated team Ellerston 11-9. Rider: Fran Elizalde

 

 

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of June 2022

Introduction

Continuing on last month’s trend (Where to buy property on the Costa del Sol), I thought it would be appropriate to write on this ‘hidden’ gem. Sotogrande doesn’t really need an introduction - much less from me - but I need to begin my article somewhere, and the beginning is always a good place to start.

Sotogrande, to many of us this word evokes images of unspoiled sandy white beaches, unending forested areas, superb views at dusk against a dashing blue sea, free roaming horses on green fields, and luxury secluded villas. To be honest, every time I’m there, it strongly echoes the Marbella of the 70’s I once knew, unblemished and blissfully underdeveloped.

Sotogrande has a very low building density by rapport to neighbouring towns, with very few constructions actually reaching two stories high. The plots of land are huge, allowing nature to take over. It belongs to the Andalusian province of Cadiz. Meaning all the lenient tax breaks and allowances I have collated in previous taxation articles apply, making Sotogrande an area of ultra-low taxation.

Sotogrande, by Spanish standards, is a very unusual place and that is good! If you take a moment to drive through its wide avenues, you can’t help but notice it bears an uncanny resemblance to a US leafy suburb; you would be forgiven if you thought you were in the US, and you would in fact be right. Col. Joseph Ralph McMicking, a retired US serviceman, bought in the 60’s several adjacent plots of land and set about developing them devising a huge housing estate reminiscent of Boston.

As a result of his ambitious overarching vision, through sheer force of will, this forerunner developed a very exclusive estate that stretches lazily from the coast all the way up to the gentle mountain slopes, adjacent to land earmarked by the Spanish Army where building is banned. This results in a huge estate that is cleverly surrounded by green belt land. This sprawling estate is dotted with lakes, lush forested areas, 18-hole golf courses (such as the Real Club Valderrama, which hosted the Ryder Cup in 1997), and a top private school. Sotogrande is renowned for its beautiful and elegant polo matches during the elegant summer soirees.

If you are the kind of person that shies away from the bling and glitz of sister upcoast resorts, and rather place value in discretion, choice, and exclusive gated communities that keep to themselves, Sotogrande is right up your alley. Sotogrande’s game, unlike other tacky neighbouring coastal resorts, is not about distasteful antics showing ostentatiously what you have, but rather, about enjoying what you have. It is home to discreet affluent individuals from all over the world.    

Sotogrande is split broadly into three distinct areas, which I’ll gloss over.

Sotogrande Bajo

This is the part of the estate that borders the coastline. You will find lavish mansions built in huge independent plots of land. Its wide sprawling avenues, with green sidewalks that make them distinctive, are dotted with impossibly tall palm trees that look taken straight out of a postcard from Miami Beach. What they lack in views is compensated by vast plots of land.

Sotogrande Alto

This is the part of the estate that sprawls over the gently rolling green hills with commanding views over the Atlantic coastline and Gibraltar. Impressive views are guaranteed at dawn & dusk. No palm trees here, it’s a leafy suburb. A mantle of evergreen lush vegetation covers the ground whilst a mature canopy, that belongs to the Atlantic climate, provides a welcome respite of shade. You will find multiple impressive gated estates within, such as La Reserva, where discretion is cherished, mum’s the word.

La Marina de Sotogrande

Strictly speaking, it’s located within Sotogrande Bajo. But it has such a distinctive personality, that it warrants being featured as its own space. This is where the port is located, Sotogrande’s main social hub and its vibrant heart. Its unusual bright pastel colours, Moustique like, catch visitors’ eyes. Most homes boast their own private moorings, door-to-door, much like in Venice! The marina is lively and vibrant, dotted with glam cafes and trendy restaurants that cater to all tastes where one can mercifully rest his weary bones basking in the warm sunlight, sipping a coffee, whilst watching life gently passing by; with younglings amorously courting each other, against a backdrop of sailboats and luxury yachts, in a never ending cycle that only gets interrupted, from time to time, by the bickering of seagulls flying overhead.

Sotogrande International School (SIS)

To close, I need to mention a school that was our feared sports rival when I studied in Marbella a long, long time ago.

Nestled high atop the mountains, surrounded by tall pine trees, lays a school with commanding views of the coastline (you’ve got to see the view at the crack of dawn, simply gorgeous) that is one of the finest private schools in all of Spain, directed by Mr. James Kearney.

Once again, I don’t really need to introduce what in time – and by its own merits – has become a renowned academic institution. The syllabus followed is the International Baccalaureate. The school attracts students from all over the coast, not only from Sotogrande, that flock to receive a privileged education from a passionate and dedicated faculty. They have recently built dorms so students can reside on campus during the academic year.

A special shout-out to teacher Mr. Carmelo (Tino) Sanchez, Head of IT, whose indelible passion for teaching his students cutting-edge ‘engineering’ courses, designing and developing all types of ingenious aquatic devices in tandem with local companies, is so advanced that it borders a university course.

Because of its superb sports facilities and installations, which they continuously expand upon through the approval of its ever-watchful Board, it generously hosts every year sports events that gather schools from the area, and beyond. I myself attended several as a kid, representing first Swans School, and later on Aloha College. But we, the underdogs, held our own, and even managed to beat’em at some events, heh!

Did I mention the school’s beautiful views? Simply breathtaking!

Sotogrande, heaven on earth. Sans soucis.

 

My main language was music, and my teacher was nature.”  Vangelis

Evángelos Odysséas Papathanassíou (1943 – 2022). Was a Greek musician, composer, songwriter, and producer of electronic orchestral music. He was best known for his Academy Award-winning score to the spiritual Chariots of Fire (1981), sci-fi noir films such as the mythical Blade Runner (1982), Missing (1982), Antarctica (1983), 1492: Conquest of Paradise (1992), and Alexander the Great (2004). He also left a mark for his masterful use of music in the 1980 documentary series Cosmos: A Personal Voyage by Carl Sagan. Vangelis was one of the greatest modern composers of our time whose magic music will echo down the ages, standing the test of time; a hallmark reserved only for a handful of artists.

 

 

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

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

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.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Guide to buy property in Spain

Raymundo Larraín Nesbitt, May, 3. 2022

Larrain Nesbitt Abogados publish a brief guide on how to buy property in Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted.

8th of May 2022

Having bought and sold hundreds of properties, and with over 450 articles published over the last twenty years, it was long overdue Larrain Nesbitt Abogados published an in-depth guide on How to Buy Property in Spain. This has been a long-standing request from clients and SPI readers that we needed to fulfil.

Our practical guide will take you step-by-step through the process of finding and buying your dream home, with particular focus on the region of Andalusia. Whilst we have strived to help you to get the best result at every stage of the buying process, please understand this guide is only an approximation to the procedure and should not be construed, or taken, as a substitute for professional legal advice.

 

You can download our guide on PDF format from this link: Guide to Buy Property in Spain


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

Related services:

    Conveyancing in Spain – Buying
    Conveyancing in Spain – Selling

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.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

 

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Working remotely from Spain

Raymundo Larraín Nesbitt, April, 1. 2022

Lawyer Raymundo Larrain runs us through the basic pointers on relocating to work in Spain.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted. 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of April 2022

War, Covid-19, high taxes, lousy weather, living new experiences, enjoying quality of life, etc There are simply too many reasons to collate on why people decide to pack up and move over to Spain.

It is undeniable that the virus outbreak has changed and shaped our mentality redefining our outlook on life. Millions of workers the world over have taken time to sit down and reflect upon their lives. Thousands have handed in their resignation and have made the decision to set up shop in Spain.

Spain has so much to offer that it comes as no surprise how over the last two years dozens of thousands of talented individuals, and their families, have made the move and are now living the (great) life in Spain. As a result of this large influx of foreign remote workers, the Spanish Government has seen fit to approve a bill that further improves and expands work conditions to attract talented immigrants: Spain’s new Entrepreneur Law.

In this short article, I give some basic pointers so you can plan ahead:

  1. Residency permit. Whether you belong or not to the European Union, if you spend more than 90 consecutive days in Spain within a calendar year, you need to apply for a residency permit. The main difference is that EU nationals are fast-tracked and can easily attain one at a very competitive cost. Non-EUs (i.e. British) are required to attain a visa to bypass the dreaded 90/180-day rule. We cover the topic of all the visas available in our in-depth immigration article: How to spend over 90 days in Spain – Residency visa overview.
  2. Work permit. EU nationals can automatically work in Spain without any further red tape, but what about non-EUs? Non-EUs require a work permit to work in Spain. Not all visas have associated a right to work in Spain. Visas which do are: Golden Visa, Marriage Visa, Business Visa, Work Visa. A Student Visa does not allow you to work but you can do internships in companies. A new visa will be approved further on this year which is the optimal choice for remote workers: digital nomad visa. It has associated significant tax benefits.
  3. Taxation. Spain is not a uniform country. It is comprised by a series of nations that speak their own regional languages, have their own cultural heritage and bear their own idiosyncrasy. Spanish is the official language that applies nationwide, but there are four other languages that are also used regionally. As a result of this diversity, regions have devolved competencies on several matters, including taxation. This is extremely relevant, as there are huge variations (understatement) when it comes to taxing legal or physical persons on income tax, inheritance, gift tax etc. Some regions are tax-friendly (Andalusia, Madrid), with ultra-low taxation, whereas other regions in Spain have very high taxes in place. Before you make the move to Spain, for your own sake, make sure you have researched the taxation of the region you pick.  
  4. Climate. Spain has a diverse climatology, it’s not all sun and palm trees. As a general rule, Mediterranean coastal areas have a pleasant and mild all-year-round weather. Inland and Atlantic coastal areas are cold and rainy with sharp contrasts in temperature between winter and summer.
  5. Language. You know that Spanish you learnt in secondary? Well, it may be for naught if you choose the wrong region in Spain. As written above, in Spain we have four co-official languages besides Spanish. In some regions, with strong nationalist views (read separatist) Spanish is shunned and they do not even use it on official administrative procedures or schools. Please ensure the region of Spain you pick actually does use Spanish. This is obviously a non-issue for those that don’t speak Spanish.
  6. Accommodation. The best advice I always give is that when you have chosen an area to settle down in, before you commit buying any property, you should rent out a place for 4 to 6 months. Bear in mind, tourist hotspots change dramatically from low to high season. That quiet shack on the beach next to you, that remains shut all winter, springs into life during the summer season with booming latino music for 3 months non-stop!

To close, I add my shameless plug on the beautiful region of Andalusia, which ticks all the boxes above! This could be your new life in Spain: The Passion of Andalusia.

At Larrain Nesbitt Abogados, we have made true the dreams of hundreds of non-EU investors, and their families, assisting them to attain residency permits. You can browse our clients’ visa testimonials here. 

 

Ukraine is entitled to its sovereignty, no matter who its neighbors happen to be. In the modern era, great countries accept that, and so must Mr. Putin. That is the message undergirding recent Western diplomacy. It defines the difference between a world governed by the rule of law and one answerable to no rules at all.” – Madeleine Albright

Marie Jana (Madeleine) Korbelova Albright (1937 – 2022). Was born in a family of Czechoslovakian immigrants who fled from the terrors of a war-torn Europe following the end of WWII to settle down in the U.S., which would become her new adopted home. She was a brilliant student that spoke eight languages. She became an American diplomat who served as the 64th United States Secretary of State from 1997 to 2001 under President Bill Clinton. She was the first female secretary of state in U.S. history. She was an outspoken advocate of freedom and a staunch defender of democratic values that showed a will and tenacity seldom seen our days.

Madeleine is a role model to young women and to all those that defend and uphold Western democratic values.

 

Residency services available from LNA

 

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

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

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.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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The Spanish Golden Visa: 8 reasons to apply

Raymundo Larraín Nesbitt, March, 17. 2022

Lawyer Raymundo Larraín highlights the eight main advantages of a Spanish Golden Visa.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted. 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
21st of March 2022

Introduction

The Spanish Golden Visa is a success story.

Spain has become the number one Golden Visa provider in the European Union since it was introduced in 2013.

Out of all the visas available in Spain, it is hands down the one that offers the most perks, including one which is exclusive to it (explained below) and which strongly appeals to affluent investors.

Europe, cradle of democracy, is chosen every year by thousands of wealthy non-EU individuals as it provides a clear and stable legal and tax framework that allows freedom, nurtures ingenuity, and upholds property rights.

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 admin red tape.

Spain’s Golden Visa is a success story, be a part of it!

 

8 Reasons on why you should apply for a Golden Visa in Spain

 

I’ll list the main benefits as bullets points for ease of comprehension, simplifying where necessary.

  • A Golden Visa does not automatically make you tax resident in Spain, unlike every other visa in Spain. This is a unique advantage exclusive only to GVs. No other visa in Spain shares this unique trait. Only for this reason, affluent investors will find it most appealing if they do not fancy paying taxes in Spain.
  • Allows you to override the 90/180-day that limits stay in Spain (and by extension in the Schengen Area/EU).
  • You can work in Spain. Unlike other visas, which ban you from working in Spain, a GV allows you, and your family, to work in Spain if you wish. Working is optional.
  • Allows you unfettered access to Spain. You can enter and leave the country as you please, even overriding Covid flight bans, as you will hold a select residency permit that few people have.
  • No minimum stay is required. Fancy staying only one night? A Golden Visa has you covered. You can spend as little as one day, or the full year round in Spain, at your choice.
  • Family is included as dependents.
  • Leads to permanent residency (optional).
  • Leads to Spanish citizenship (optional).

 

Conclusion

If you can afford one, it is hands down the best visa to have in Spain.

The good news is that you may already qualify unbeknownst to you! You see, Golden Visas apply retrospectively. If you have invested in Spain €500,000 in real estate on or after the 28th of September 2013, you may already pre-qualify for one!

Over the last year I have come across multiple people who hadn’t realized they already qualified for a Golden Visa. This is because they already owned property in Spain, which allows them the opportunity to apply for one, if they fancied.

Interested? Come and speak to Larraín Nesbitt Abogados friendly staff who will be pleased to guide you through Spain’s Golden Visa programme. On applying for a Golden Visa, we assign you one of our immigration lawyers, who will be assisted by one of our in-house visa specialists, guiding and hand holding you through the whole procedure. A Golden Visa takes under 2 months to attain.

At Larrain Nesbitt Abogados, we have made true the dreams of hundreds of non-EU investors, and their families, assisting them to attain a Golden Visa since its inception in 2013. You can browse our clients’ visa testimonials here.

At LNA, we put you in touch with the most reputable real estate agencies across Spain to make your dreams come true safely. Apply for the keys to your Golden Visa through Larraín Nesbitt AbogadosGolden Visa Service.

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 post-war European and trans-Atlantic institutions and was one of eleven Founding Fathers of the European Union, the Council of Europe, and NATO. Upon retiring, the European Parliament bestowed on him the title of Father of Europe.

 

Schuman’s generation was indelibly marked by the harrowing events of WWII and would go to great lengths to ensure such bloodshed would never take place again in European soil. To this end, the Union was conceived; a supranational political entity that safeguards peace & freedom within its borders and which does not seek dominion over others, preserving each Member state’s idiosyncrasy, united but not absorbed. It is hands down the greatest political achievement of all time and a living testament to those eleven men that made it possible.

In fact, all Founding Fathers of the Union were Christian, which explains the thoughtful choice of Rome - bedrock of Christianity - 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.

 

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: Golden Visa: 8 Reasons to apply

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.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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New law for the protection and wellbeing of animals

Raymundo Larraín Nesbitt, March, 3. 2022

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists has a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of March 2022


Animal rights, always a pet article of mine.

Spain’s social-communist government approved a new law for the protection and rights of animals. I can only show my personal appreciation and gratitude for at (long) last having such a law enacted and enforced throughout Spain.

The new draft law can be browsed here, it came into force on the 5th January 2022.

This key law, which amends several other laws, is the latest addition to a general legal framework that is gathered in an Animal Codex (Código de Protección y Bienestar Animal) devised for the protection of animal welfare. Updated as of 27-01-2022.

This was a trend that was started long ago by one man; a proto-ecologist called Mr. Félix Rodríguez de la Fuente in the 70’s who, over time, shaped Spanish modern society changing its mindset, even to our day, and has coalesced in this Animal Codex that now protects our little brothers and sisters. No accolade can honour enough what this man achieved in benefit of us all. Almost four decades on after his tragic death, he is still mourned and credited as the Father of Spanish Environmentalism.

Spain’s historical disposition towards animal’s rights has been hazy at best; to put it mildly and avoid ruffling feathers. This situation has changed dramatically post-Constitution as new open-minded generations, imbued by democratic ideals, seize power to enact laws in line with the core values that behoove a modern society.

This new law, that extends jail terms to those gits that would abuse animals, is a clear victory for animal rights in Spain which have (finally) become a core tenet of our society and which may now be legally upheld.

Kudos to our government for making such a great effort to protect our pets and wildlife.

Credit where credit is due. Gracias Félix.

Recap of the new points brought by this law

As per usual, I will collate the main 25 as bullet points, simplifying where necessary.

  • Animals cease to be ‘things’, in legal terms, and are now regarded as living, sensitive beings. As a consequence, they may no longer be repossessed or embargoed in insolvency procedures.
  • Animals can no longer be sold in pet stores. They will be sold only by licenced animal breeders.
  • Animal exchanges between private unlicenced individuals must be free of charge, no money can be exchanged.
  • Animal breeders are under a legal obligation to identify and tag animals in a national animal registry before being sold.
  • Some animals will be neutered prior to being sold to avoid their unwanted reproduction.
  • Animals may no longer be freely sacrificed unless there are valid reasons.
  • Prohibition to mistreat them physically or psychologically.
  • Animals may no longer be abandoned by owners in open or closed spaces i.e. terraces, cars, etc.
  • No mutilations are allowed i.e. for aesthetic reasons.
  • Animal fights are forbidden.
  • Banning of public shows that use animals and may cause them any kind of pain or suffering.
  • Beggars may no longer use animals to beg.
  • Certain jobs, that are deemed too stressful for their wellbeing, may no longer use animals.
  • Banning of animal accessories that cause them harm i.e. spiked collars for dangerous dogs.
  • Banning of pets to be eaten (sic)!
  • Banning of capturing wild birds to force them to sing.
  • Banning of certain foods for animals not considered apt.
  • Banning of animals as prizes in draws or lotteries.
  • Banning of animals (i.e. pets) released into the wild.
  • Banning of animal traps unless legally authorized.
  • Cats can no longer be left alone for more than 3 days, dogs no more than 24 hours unsupervised.
  • The adoption of non-tagged or identified animals is expressly banned.
  • Publicity with animals is banned except for their own purposes i.e. animal food
  • Arts 332 to 340 of Spain’s Criminal Code.
  • New amendment will increase jail terms from the current 12 months to 2 years in prison.

 

Conclusion

The majority of animal lobbies consider the new amendment of 2 years falls short of what’s required. They are lobbying hard to increase it to 3 or 5 years. Given the changes in the mindset of our society, I find it highly likely this increase in jail terms will be achieved in the future. I very much welcome them.

There is still much work to be done to extend these rights and protection to animals in the wilderness.

To close, such laws for the protection of animals are always a welcome respite, as they exemplify the best of Human exalted values and show the respect that is due - and owed - by our little brothers and sisters, who look up to us. These changes act as a ray of hope, in the dark times we now live through, when not even human life is spared by those who wield absolute power and ought to know better. History is a ruthless mistress, tyrants and despotic warmongers go down in shame, always.

 

The greatness of a nation, and its moral progress, can be judged by the way its animals are treated.” – Gandhi. AKA Mahatma (‘Great Soul’) Gandhi.

Mohandas Karamchand Gandhi (1869 – 1948). From an impoverished and humble social background, he would rise to become the Father of the modern Indian Nation. Trained lawyer, author, journalist, editor, statesman, staunch human rights activist and founder of the non-violent movement. He would be wrongfully incarcerated and would suffer unjust persecution throughout most of his adult life. Gandhi's mindset would be for ever changed after reading the book ‘The Kingdom of God is Within You’, from the universally acclaimed Russian writer Leo Tolstoy, in which Tolstoy reinterpreted the teachings of our Lord Jesus coalescing his ideas of nonviolent resistance. In what can only be described as an extraordinary feat at the time, he single-handedly managed to lead the country to a peaceful independence, on following a non-violent resistance movement, breaking the heavy chains of oppression from the British Empire; at the time, the world’s greatest superpower. He also oversaw the peaceful breakup from the Muslim population, thus avoiding the horrors of a fratricidal civil war, which would go on to form their own country (Pakistan). Through Gandhi's peaceful actions, in both South Africa and India, he would go on to influence civil right movements and freedom activists the world over, including historically relevant figures such as Reverend Martin Luther King and Nelson Mandela, both awarded with the Peace Nobel Prize. The Peace Nobel Prize for 1948 was never awarded because sadly "there was no suitable living candidate". In a dark century, full of giants and great historical figures, Gandhi towers above them all, a shining beacon of Humanity. He is arguably the greatest historical figure of the 20th century.

 

At LNA we can assist you buying, selling or renting out your property in Spain. We have 19 years’ experience in conveyance & tax. We are also specialized in Immigration & Residency permits.

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

Larraín Nesbitt Lawyers is a law firm specialized in taxation, inheritance, conveyancing, residency, 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 animal rights articles:

 

Article also published at Spanish Property Insight: New law for the protection and wellbeing of animals

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. No animal, or politician, was harmed on writing this article. VOV.

2022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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European Court of Justice rules on tax form 720, declares aspects illegal

Raymundo Larraín Nesbitt, February, 1. 2022

Lawyer Raymundo Larrain does a brief rundown on the ECJ’s landmark ruling from 28-01-2022 on tax form Modelo 720 (Worldwide Asset Declaration for Spanish residents).

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022 Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
21st of February 2022

Introduction

It was long time coming, the writing was on the wall.

Through the dogged perseverance of one Spanish lawyer, Mr. Alejandro del Campo, we now have this ruling. We should all be grateful to him (and our EU Overlords).

Finally, after years of anxious wait, the European Court of Justice (ECJ, for short) delivered a landmark ruling on Spain’s unfamous 720 tax form. We had published several articles on this topic leading up to this long-anticipated moment (i.e. European Court of Justice’s lead council states Spanish Tax Form 720 fines are disproportionate – 16th July 2021).

On Thursday 28th of January, the ECJ declared null and void several sections of the law related to tax form 720.

This was featured prominently all over the Spanish press and is now being misconstrued as the end of 720. But, is it really?

(Spoiler) No! Not by a long shot.

We keep receiving emails from clients telling us they no longer need to file 720 because it “has been abolished” etc.

In light of this, I’ve written this short article to shed some light on the matter and hopefully clarify the matter.

ECJ’s ruling

The ECJ’s ruling declared null and void a series of aspects that we had previously bitterly criticized in our articles and blog posts:

  1. The no imprescriptibly of the debt.
  2. The disproportionate fines of 150%.
  3. The disproportionate fines on not disclosing all the financial data or doing it wrong.

All three aspects above have been declared null and void by the ECJ in yesterday’s ruling.

I really don’t want to go into this in detail, but as an example, only crimes of genocide in our legal system have no imprescriptibility. And quite frankly, you honestly cannot compare a heinous act such as genocide (a crime against Humanity) with not disclosing your estranged rich uncle left you 60k in some fancy Swiss bank. I mean honestly.

In short, the above points are an affront to core tenets enshrined and upheld by the community of nations known to us as the European Union i.e. freedom of movement of capital. As a result, they are null and void as they are deemed incompatible with core principles of our Union (UK not included).

Does that spell the end of the dreaded Modelo 720?

Again, for the avoidance of doubt, no.

720 remains, and will very much remain, a tax form that all tax residents in Spain will need to abide.

If you meet the 720 criteria, you must file a 720 tax form on or before the 31st of March of every year. It’s only for reporting purposes, no tax is paid and in principle, you only need to do it as a one-off, not every year.

So, what’s changed then?

The three points I collate above.

The Spanish Tax Office will waste no time (understatement) in working on this and tweak the penalties associated to 720 over the next weeks so they are fully compliant with the ECJ’s ruling on the 720 and with the EU’s founding principles that pervade all our legal system.

I bet my bottom dollar that they’ll sort it out before the end of February 2022. When it comes to these matters, that is to demand taxes from us poor buggers, our tax office moves so fast it would even make a cheetah blush in shame. Eat your heart out Mr. Bolt Usain, you’re no match for our tax office.

Going forward

Going forward, as mentioned, any resident taxpayer that meets the criteria of 720 needs to submit it, so no changes there.

The only difference is that the associated penalties on non-compliance, or presumably on making any mistakes (knowingly, or not), will be far more lenient and fall in line with other tax forms.

What about fines? What happens to all those that were fined in the past?

The Spanish Tax Office racked up an estimated 230 million euros in fines since the inception of 720 in 2012.

As a result of yesterday’s landmark ruling, all those taxpayers that were (heavily) fined now have the door ajar to apply for a tax rebate on the amount fined, plus legal interests on top.

We advise taxpayers, that find themselves in such a predicament, to contact our law firm so we study their case and assist them in recovering their money.

Conclusion on the ECJ ruling on the Modelo 720 Spanish tax form (Worldwide Asset Declaration)

Once more, the ECJ, the highest court in the land, proves its mettle and draws the line on abuse. The voracity of the Spanish Tax Office knows no bounds and it is up to law courts and impartial judges and magistrates to defend us from this abuse.

Ideally, and it pains me to write it, it should really be Spain’s Supreme Court that should be doing this job and holding the line. But I guess they are far too busy still trying to rule – twelve years on – such cases like the one on abortion. I kid you not. A slooow justice indeed, no cheetah fast-pace here.

Once more, I must commend our EU Overlords for delivering impartial justice and setting the record straight. Thank you.

Rant over.

For the broader market (read real estate & foreign investments), the implication of this ruling is that resident taxpayers should no longer hold back submitting this tax form as the fines that will now be levied by the Spanish Tax Office (still to be disclosed) will be very reasonable and should no longer be feared.

Bottom line, the ECJ’s key ruling is (most) positive, and it is much appreciated by us punters, kudos!

Justice delayed is justice denied.” – legal maxim

 

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 originally published at Spanish Property Inisght:  European Court of Justice rules on tax form 720 – 21st February 2022

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 taxman or politician was harmed on writing this article. Voluntas omnia vincit.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Andalusia’s new tax changes for 2022

Raymundo Larraín Nesbitt, January, 21. 2022

Lawyer Raymundo Larraín briefs us on the new tax changes in force in Andalusia as from 2022. The landmark tax reduction is so significant that it has ushered in a new era in wealth-planning.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of over 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted.

 Inset photo: La Alhambra, Granada

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
21st of January 2022

I’m going to cut to the chase on this one because, in all honesty, it’s growing old reporting every month on the continued changes in taxation in Andalusia (lowering them one month after another). I will be focusing mainly on the tax changes dealing with buying & selling property, inheritance, and income tax. But the scope of these changes run broader and deeper.

Any reader who follows us regulalry, will have noticed the large influx of tax articles featuring Andalusia over the last three years. This is because Andalusia’s new regional government is hell-bent on lowering taxes across the board and we are immersed in what can only be described as a ‘tax revolution’.

After almost 40 years of high taxes under the previous Administration, the newly-appointed Authorities have reduced taxes as much as is legally possible – within the constraints of devolved competencies – and we are all very grateful for it.

Changes below are a recap from law 5/2021, which came into force as from the 1st of January 2022. Please note I will not mention any previous tax changes (such as the key suppression of inheritance tax in Andalusia approved in 2019) only new tax changes.

Wealth Tax (Patrimonio)

  • Tax-free allowance increased to €1,250,000 per taxpayer with a physical disability equal to or greater than 33% (was €700,000).
  • Tax-free allowance increased to €1,500,000 per taxpayer with a physical disability equal to or greater than 65% (was €700,000).
  • Improved wealth tax sliding scale:
Tax base

 

Euros

Quote

 

Euros

Remainder

 

Euros

Tax rate

 

%

0 0 167.150,00 0,20
167.150,00 334,30 167.100,00 0,30
334.250,00 835,60 334.250,00 0,50
668.500,00 2.506,85 668.500,00 0,90
1.337.000,00 8.523,35 1.337.000,00 1,30
2.674.000,00 25.904,35 2.674.000,00 1,70
5.348.000,00 71.362,35 5.348.000,00 2,10
10.696.000,00 183.670,35 Onwards 2,50

Personal Income Tax (IRPF)

  • Tax allowance on buying main home 5% for young people (under 35 y.o.)
  • Tax allowance on long-term rental 15% (capped at €600/year).
  • Improved regional sliding scale: *
Tax base

 

Euros

Quote

 

Euros

Remainder

 

Euros

Tax rate

 

%

0,00 0,00 12.450,00 9,50
12.450,00 1.182,75 7.750,00 12,00
20.200,00 2.112,75 15.000,00 15,00
35.200,00 4.362,75 24.800,00 18,50
60.000,00 8.950,75 onwards 22,50

*works in tandem with national scale

Inheritance Tax (ISD)

  • 99% tax reduction on acquiring a main home for Groups I and II (irrespective of value).
  • 99% tax reduction on acquiring business/company for Groups I, II, and III.
  • Tax allowance for Group III increased to €10,000 (was €8,000)
  • Additional tax allowance of €250,000 for inheritors with disability greater than 33%
  • Additional tax allowance of €500,000 for inheritors with disability greater than 65%
  • Group III: top marginal rate is reduced to 45% (was 70%, top rate applies only in the most extreme cases, when millions are inherited).

As a gentle reminder:

Group I: Natural and adopted children under 21.

Group II: Natural and adopted children over 21, spouse, registered civil partnerships, parents, adoptive parents, grandparents, and great-grandparents.

Group III: Relatives in second and third degree: in-laws, brothers/sisters (siblings), nephews/nieces, aunts, and uncles.

Gift Tax (ISD)

  • 99% tax reduction on parents gifting money to children to buy a main home.
  • 99% tax reduction on parents gifting the main home to children.
  • 99% tax reduction on parents, or family members, gifting capital to set up a business (capped at €1,000,000).
  • 99% tax reduction on parents gifting money to children.

Property Transfer Tax (ITP)

  • 7% flat rate (irrespective of property value)
  • 5% for young families (under 35 y.o.) on buying a main home (capped at €150,000)
  • 6% on buying a main home (capped at €150,000)
  • 5% on buying a main home and with disability (capped at €250,000)
  • (long list of case-per-case reduced rates goes on and on) etc

Stamp Duty (AJD)

  • 1.2% flat rate on buying property (off-the-plan)
  • 1% on buying a main home (capped at €150,000)
  • 0.3% in rentals

Conclusion

These tax changes are as good as it gets, period.

Andalusia’s regional government continues with its unabated trend of lowering taxes across the board.

The tax improvements are so prominent, they have turned Andalusia into an ultra-low taxation area.  Andalusia and Madrid now have the lowest taxation in all of Spain.

The improvements foster foreign investments in Spain, and in particular in Andalusia.

These pivotal tax changes have not gone unnoticed by non-residents. In a 2021 survey, 12,000 expats from 174 countries, voted Malaga as the world’s second best place to work & live in.

If regional politicians continue doing such a stellar job, I won’t have anyone left to throw darts at, sigh.

 

At Larrain Nesbitt Abogados we can assist you buying & selling property in Spain and deal with its taxation. Ask us.

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

Larraín Nesbitt Lawyers is a law firm specialized in conveyance, taxation, inheritance, residency 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:

Related articles

 

Originally published in Spanish Property Insight: Andalusia’s new tax changes for 2022

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. No politician was harmed on writing this article. VOV.

2022 © Raymundo Larraín Nesbitt. All Rights Reserved.

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