Blog / News

Stunning €32mn villa sold in Marbella

Raymundo Larraín Nesbitt, May, 11. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

Photo credit: Diario Sur.


By Raymundo Larraín Nesbitt
Lawyer - abogado
11th of May 2021

Last month, we reported drastic tax changes in Andalusia that reduced significantly both Property Transfer Tax and Stamp Duty. This is a new tax milestone, which coupled with the significant tax changes of April 2019 in both inheritance tax and gift tax, are effectively turning the region of Andalusia into the most tax-friendly region in all of Spain.

As I relentlessly care to point out every time I get the occasion, low taxation fosters foreign investments on a large scale. Which in turn creates wealth and jobs in its wake benefiting society at large. This is not idle banter or philosophic musings. Lowering taxes has an immediate and significant impact on the real estate market which we notice because we are at the frontline of it.

Andalusia’s right-wing coalition government have publicly announced they will be lowering furthermore a slew of six taxes, including wealth tax. Within the span of only three years, since the new right-wing government took office, they have turned the tables. Taxation was traditionally Andalusia’s Achille’s heel and is now fast becoming its most important selling point, never mind the sun or beach!

In fact, so much so, that we keep witnessing how client after client after client pay nothing in IHT, even on inheriting large estates since 2019. As pointed out in previous taxation articles, lowering taxes will no doubt act as beacon strongly attracting affluent individuals the world over who relentlessly seek to preserve and increase their family’s wealth.

As a result of this fiscal policy instigated by our regional right-wing government, we are witnessing in 2021 how Marbella’s (ultra) high-end market is performing spectacularly well with multiple mansions selling in the exclusive gated resorts of Sierra Blanca for over €20mn and several others at La Zagaleta for over €30mn. Last week we saw yet another €32mn mansion sold after five years on the market. Diario Sur reports: The most expensive mansion in Europe sold in Marbella. In March we reported on another one of €40mn being sold.

But don’t get me wrong, these tax changes also - and foremost - benefit low and middle-class income bracket families who will now not see their wealth and life savings being confiscated by voracious hard-left wing governments that only contribute to spread misery. Only in 2019, just before the new tax changes in IHT were enacted by the new government, over 10,000 Andalusian families were forced to renounce to their inheritance every year because they were unable to afford paying the steep IHT (source). In no other region of Spain (other than Catalonia, also under the control of a hard-left wing coalition) did so many families need to give up their parent's inheritance because they were unable to pay the extortionate tax rates set by greedy politicians. Mercifully, they were ousted by popular vote, and after the new administration stepped in office, it instigated the ambitious key tax changes of 2019 and now in 2021. As a result, you now don’t see anyone (rich or poor) in Andalusia being forced to renounce to their family’s life savings to finance politicians’ delusional dreams.

And to close, to boot Andalusia has never made more tax revenue than when it bravely lowered its taxes back in 2019 (source) because - again - low taxation (greatly) attracts investments & commercial activity, kickstarting the economy (Laffer curve). Is it so very hard to understand?

Make no mistake, tax hikes only benefit politicians and their ideological cronies, no one else.

 

The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.” – Winston Churchill

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

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

 

At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 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 services:

 

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

2021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Andalusia lowers taxes, including Property Transfer Tax and Stamp Duty, in dashing move that will boost the market

Raymundo Larraín Nesbitt, April, 30. 2021

Lawyer Raymundo Larrain gives us a brief rundown on the recent tax changes in the region of Andalusia, where the property transfer tax and Stamp Duty have been slashed in a welcome move for the housing market.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
28th of April 2021

On Monday this week, the political parties in Andalusia’s coalition government – Ciudadanos, Vox, and Partido Popular – publicly agreed to lower taxes in the region of Andalusia. Concretely the following six taxes will be significantly reduced:

  • IRPF (personal income tax)
  • IHT (inheritance tax)
  • Patrimonio (wealth tax)
  • ITP (property transfer tax)
  • AJD (stamp duty)
  • Taxes on gambling

 

Frankly, I’m not quite sure how they plan to reduce IHT furthermore, as over the last three years none of our clients have paid anything on inheriting an estate in Andalusia since the drastic changes in IHT of April 2019, but it’s welcome news of course.

For anyone who’s been following my articles over the years, they’ll know I am a staunch defender of lowering taxation across the board as I strongly believe it greatly attracts foreign investments, thus creating jobs and wealth on its wake.

Raising taxes is a futile exercise (even counterproductive), as you only chase away taxpayers, which leads to job losses and eventually a generalized impoverishment of society at large. Ironically, Andalusia has never made more money in taxes since it lowered them in 2019! In Economic theory, we know this as the Laffer curve.

This news is simply excellent, and a welcome respite at a time when the market is challenged due to the ongoing Covid-19 pandemic. But wait, it gets even better. Read on.

Andalusia slashes Property Transfer Tax (PTT)

The Andalusian parliament enacted a new law, which has been published in Andalusia’s Official Law Gazette (BOJA), which slashes PTT for 2021. This is a temporary measure devised to offset the negative repercussion of Covid-19 in the property market, and help to foster and kickstart property transactions. It will only last until the end of this year. So anyone whose thinking of buying a property in Andalusia, better get moving.

Until now, Andalusia followed a sliding scale for ITP that started at 8% and went to 10% contingent on the sale value. This has now been struck off, and a unique tax rate of only 7% applies regardless of the sale value.

This change will be in force as from the 28th of April 2021 until the 31st December 2021.

Before:

Residential property sale price Tax rate
Up to 400,000€ 8%
400,001€ – 700,000€ 9%
701,000€ up 10%

 

Now:

Residential property sale price Tax rate
Any 7%

 

This tax change translates into a massive tax saving for property buyers in Andalusia. Let’s see it with an example. A British couple buy a 500,000 euro property in Andalusia (they are chasing a  Golden Visa).

Tax to pay before: €41,000

Tax to pay now: 35,000

Tax savings of 15% or €6,000, for this example.

What’s important to note, is that this tax-saving grows exponentially in line with the sale price; the higher the sale price, the larger the % saved in taxes.

Again, with examples. On a 1.5mn sale price, the tax saved is almost 25%. On a 3mn sale price, the tax saved is 27%, and so forth.

This is why buyers sitting on the fence should seriously consider buying now and take advantage of this time-gated opportunity to save a huge amount in transfer tax. I stress this tax advantage ends on the 31st December 2021.

Andalusia reduces Stamp Duty  

If the above wasn’t enough, they have also approved to slash Stamp Duty from 1.5% down to 1.2%

Whilst Stamp Duty doesn’t impact on resale property, it does affect off-plan. Anyone buying new-build property will now make a considerable tax saving with this new tax change. That’s a 20% tax saving, not bad; not bad at all!

If only our beloved Communist leaders in Madrid followed suit, what a wonderful world this would be!

 

 

L’art de l’imposition consiste à plumer l’oie pour obtenir le plus possible de plumes avec le moins possible de cris.” – Jean Baptiste Colbert.

French economist and Finance Minister under King Louis XIV.

Translated as: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

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

Legal services available from Larraín Nesbitt Abogados

 

Article originally published at Spanish Property Insight: Andalusia lowers its taxes – Property Transfer Tax slashed!

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.

2.021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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5 tips on buying property in Spain

Raymundo Larraín Nesbitt, April, 21. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Lawyer - Abogado
21st of April 2021

As the sale high season is upon us, I thought I’d write a gentle reminder for property buyers on the five basic points they should be ticking off on their checklist.

  1. Hire a lawyer

More and more I am witnessing how new buyers fray into the market forgetting all the valuable lessons from the last property boom. You will find in Spain many people will tell you that buyers are under no legal obligation to hire a lawyer. While this may indeed be true, the fact is that lawyers add a valuable input that avoids buyers making costly mistakes such as wiring reservation deposits to rogue agents who take off and disappear overnight. I have witnessed two such cases only this month. I gently remind all buyers that estate agents in Spain - unlike lawyers - are unregulated, have no insurance policies hired and are not subject to any disciplinary body. Moreover, anyone can be an agent in Spain, you don’t need to pass any exam or hold any professional qualifications. I’ve just received an enquiry from someone who has been conned out of her deposit by a rogue agent who’s now fled. As a recent example, we reported a recent high-profile case in Mallorca that embezzled several million euros from clients: Several hundred (foreign) off-plan buyers conned in Mallorca. Lawyers have escrow accounts in place and (expensive) insurance policies for malpractice or negligence, besides being registered and subject to the discipline of the Bar Association of which they are members. We strongly advise you hire an experienced law firm such as ours, with over two decades. Bottom line, if you are a foreigner and plan to buy property in Spain without a lawyer, you are in for a world of pain.

  1. Is the property duly registered?

At times properties are put on sale which are not legally registered. This may cause serious issues down the line leading to a loss of money. I.e. Rural property may have registration issues on a house that is illegal, off-plan property may lack the mandatory building or occupation licences, etc.

  1. Is the property registered under the seller’s name?

Another common problem is when you are buying a property from someone who is not the registered owner. This happens more frequently than what you’d think. The reason is simple, people inherit properties all the time but they neglect to follow an inheritance procedure (probate) to avoid paying taxes, and put them straight for sale. Needless to say, you cannot buy a property from someone who is dead. Although this may seem rather obvious, I can tell you from experience that more than once someone has emailed me ‘signed’ reservation contracts (read forged) by owners who passed away long ago. Beneficiaries must first go through probate before being able to sell a property on.

  1. Are there charges, encumbrances, or debts against the property?

Unbeknownst to a buyer, a seller may owe money to multiple debtors. Only this month we’ve had a case where our star seller owed: the local tax office, IBI, basura (refuse charge), community of owners, water, electricity and God knows who else. All these debts are taken over by the new owner, that is the buyer. By law whoever owns the property, takes on any and all past debts against it. A lawyer can ensure you are buying a property free of charges and debts. Peace of mind is priceless.

  1. La complementaria or bargain-hunter tax

Guidy buyers will be eager to snag a bargain under the sun. However, if things aren’t done right taxwise, you will receive a nasty letter from the tax office some 6 to 12 months after completion demanding extra property transfer tax because they suspect you underdeclared the sale price. A lawyer can pre-empt this problem avoiding a massive tax bill when you least suspect it. If you want to know more on this, we wrote an article explaining it.

 

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

 

Legal services available from Larraín Nesbitt Abogados

 

Related property articles

 

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.

2.021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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8 reasons to buy property on the Costa del Sol (Andalusia)

Raymundo Larraín Nesbitt, April, 11. 2021

Lawyer Raymundo Larrain gives us a brief rundown on the advantages of living & buying property on the Costa del Sol (Malaga).

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

 

Image: Mary Jean Murphy photography

By Raymundo Larraín Nesbitt
Lawyer - Abogado
8th of April 2021

The Costa del Sol (Malaga) remains a prime market for the foreign worldwide community attracting millions of visitors every year for a host of reasons:

A pleasant all-year-round climate. The Costa del Sol boasts 330 days on average of sunshine a year. It is not called the Sun Costa for nothing!

Ultra-low taxation. As explained in our taxation articles, Andalusia has the lowest tax rates on both Inheritance and Gift tax in all of Spain, even beating liberal Madrid. In fact, so much so, that most taxpayers pay nil. Inherited estates under one million euros (per taxpayer) are tax-free for next-of-kin. Over one million, are taxed at only 1% on the excess. If you are looking to pay low taxes – or none – think Andalusia.

A privileged lifestyle. The Costa del Sol will spoil you for choice, as it caters to all tastes: whether you enjoy its beautiful unspoiled scenery, going out on a fancy dinner, practising sports, mountain trekking, horseriding, going to the beach, night-time clubbing for party owls, skiing (Granada, only a 3-hour drive), or simply chilling out in your terrace al fresco sipping a glass of a fine Rioja while you watch in good company a dramatic dusk silhouetted against a mountain ridge.

Excellent connections. Malaga airport, Gibraltar airport, modern rail network, toll highways, all help to connect Malaga to the modern world.

First-class amenities. Lavish restaurants, refined theatres, glam discotheques, renowned international museums (Picasso, Thyssen, Pompidou, etc), five-star hotels, golf courses, Malaga has it all! Your problem is that won’t have enough time to enjoy it all!

Top-rated international schools. The Costa del Sol boasts one of the widest selection available of top-ranked private international schools offering both the International Baccalaureate (IB) and the English syllabus (GCSE’s & A levels). Graduates enter top-ranked universities the world over following the Shanghai ranking of leading universities (Oxford, Cambridge, Imperial College, LSE, Edinburgh, Harvard, Princeton, Stanford, Yale, etc).

Quality healthcare. Malaga offers several state-of-the-art hospitals that will cover your every health need. There are also specialized beauty medical facilities that assist enhancing your physique, should you need a little magic touch here or there, for those in the know!

Covid-19 measures. To close, the Costa del Sol Authorities have implemented stringent regulations and recommendations, ensuring hygiene measures are in place for all our guests, inspiring trust, and confidence in all our visitors.

Marbella, it’s the lifestyle.

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

Legal services available from Larraín Nesbitt Abogados

 

Article also published at Spanish Property Insight: 8 reasons to buy property on the Costa del Sol (Andalusia)

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.

2.021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Reminder - Q1 2021 Non-Resident Income Tax filing

Raymundo Larraín Nesbitt, April, 1. 2021

Marbella-based Larraín Nesbitt Lawyers has over 18 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Copyrighted © 2021. Plagiarism will be criminally prosecuted.

 

Just a gentle reminder to all non-residents, who own property in Spain and rent it out (whether long or short-term i.e. holiday home); you must file your Q1 2021 quarterly tax return now in October. You are being taxed on your rental income for the previous three months: July, August and September.

For 2021, the non-resident tax calendar is as follows:

  • Q1 January – March. Filed on the first 15 days of April
  • Q2 April – June. Filed on the first 15 days of July
  • Q3 July – September. Filed on the first 15 days of October
  • Q4 October – December. Filed on the first 15 days of January 2022

 

Our cut-off date to accept filing Q1 2021 non-resident tax returns is Thursday the 15th of April 2021.

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

We can offer you this tax service for a very competitive fee: 125 euros plus 21% VAT.

The quoted fee is per property and per tax quarter, it includes up to two joint owners i.e. husband & wife.

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

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

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

 

Q1 2021 tax submission period

From the 1st to the 20th of April.

Related tax service

Holiday Rental Accounting Service (HRAS)

Related taxation articles

 

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

2.021 © Raymundo Larraín Nesbitt. All rights reserved.

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€40mn villa sold in Marbella

Raymundo Larraín Nesbitt, March, 21. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - abogado
21st of March 2021

With the huge changes in tax laws introduced by the new tax-friendly government in Andalusia in April 2019, I wrote a piece which conclusion reads as follows:

"Needless to say, the profound impact these tax novelties will have over the mid to long run, when word of mouth finally spreads, is that they will act as a beacon, strongly attracting affluent individuals who will flock from all over the world to the Costa del Sol and Sotogrande. With ever-changing tax laws, wealthy individuals are always on the prowl seeking low-taxation areas, ready to relocate and settle down with their families to preserve and increase their wealth."

I will say it again, low taxation fosters foreign investment on a large scale, which in turn creates local jobs and lays the path to wealth. It is not idle banter, political decisions and actions have direct consequences on our economy and job creation. Politicians take note.

Today is the first day of Spring, meaning the high season for property sales is upon us. Buyers flock from all over the world to Marbella, and Costa del Sol, to fulfil their dream property. A new trend that’s emerged, and that I’ve been watching with particular interest, is Covid-induced. We have seen how affluent buyers are specifically seeking large, isolated plots with plenty of living space. Even buyers on lower income brackets are now also demanding similar living specifications. No doubt a lifestyle change induced by the virus-ridden world in which we now live in.

Whilst it wasn’t uncommon in Marbella to see properties selling for several million (seven figures), it has now become increasingly more ‘common’ to see properties on the market selling with an eight-figure tag, even a record-breaking €40mn price tag, such as the one sold last month. Besides the virus, there are several reasons which explain the drive of high-flyers to invest their hard-earned money in multi-million euro mansions in Marbella and the greater Marbella area.

Costa del Sol still remains a prime market for the foreign worldwide community attracting thousands of affluent visitors every year for a host of reasons:

A pleasant all-year-round climate. The Costa del Sol boasts 330 days on average of sunshine a year. It is not called the Sun Costa for anything!

Ultra-low taxation. As explained in our taxation articles, Andalusia has the lowest tax rates on both Inheritance and Gift tax in all of Spain, even beating liberal Madrid. In fact, so much so, that most taxpayers pay nil. Inherited estates under one million euros (per taxpayer) are tax-free for next-of-kin. Over one million, are taxed at only 1% on the excess. If you are looking to pay low taxes – or none – think Andalusia.

A privileged lifestyle. The Costa del Sol will spoil you for choice, as it caters to all tastes: whether you enjoy its beautiful unspoiled scenery, going out on a fancy dinner, practising sports, going to the beach, night-time clubbing for party owls, skiing (Granada, only a 3-hour drive), or simply chilling out in your terrace al fresco sipping a glass of a fine Rioja while you watch in good company a dramatic dusk silhouetted against a mountain ridge.

Excellent connections. Malaga airport, Gibraltar airport, modern rail network, toll highways, all help to connect Malaga to the modern world.

First-class amenities. Lavish restaurants, refined theatres, glam discotheques, renowned international museums (Picasso, Thyssen, Pompidou, etc), five-star hotels, golf courses, Malaga has it all! Your problem is that won’t have enough time to enjoy it all!

Top-rated international schools. The Costa del Sol boasts one of the widest selection available of top-ranked private international schools offering both the International Baccalaureate (IB) and the English syllabus. Graduates enter top-ranking universities the world over following the Shanghai ranking of leading universities (Oxford, Cambridge, Imperial College, LSE, Edinburgh, Harvard, Princeton, Stanford, Yale, etc).

Quality healthcare. Malaga offers several state-of-the-art hospitals that will cover your every health need. There are also specialized beauty medical facilities that assist enhancing your physique, should you need a little magic touch here or there, for those in the know!

Covid-19 measures. To close, the Costa del Sol Authorities have implemented stringent regulations and recommendations, ensuring hygiene measures are in place for all our guests, inspiring trust, and confidence in all our visitors.

Marbella, it's the lifestyle.

 

At LNA we can assist you buying, selling, or renting out your property in Spain. We have 18 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 services:

 

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

2021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Financial & legal repercussions of breaching an option’s contract

Raymundo Larraín Nesbitt, March, 11. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.


By Raymundo Larraín Nesbitt
Lawyer - abogado
11th of March 2021


On buying property in Spain, you will be presented with multiple options. One of them being to sign an option’s contract, whereby on signing, you pay a seller typically 10% of the agreed sales price. Once you complete at a notary, the 10% goes towards the final sales price.

However, what happens if - for whatever reason - the buyer pulls out and does not carry on with his purchase? It is important to understand that on pulling out of a sales contract, the buyer automatically breaches the Private Purchase Contract (exchanges). The immediate legal repercussion this has is that the seller legally pockets the buyer’s 10% and the property can now be put into the market once more, and sold to someone else.

The seller, or his legal representative, will attend the notary on the day it was contractually stipulated agreed the buyer would complete and will raise a deed, which a notary will witness, stating the buyer has breached the contract as they have failed to attend completion on the agreed day and time and pay the sales price as was agreed. The seller will then proceed to withhold the 10% option as penalty for contract unfulfillment. The notary will then send a letter by recorded delivery to the seller, or his legal representative, of this deed for notification purposes. There is no point in challenging this at court as a buyer is almost guaranteed to lose.

Where am I getting with this? The reason on why I’m writing this post is because some buyers naively think that only because to their minds they have a justified reason to pull out and not go ahead with a purchase (i.e. family member dies, their financial circumstances change drastically, they are laid off, they fail to secure a mortgage loan, life-threatening disease, flight bans, divorce, etc), that does not justify a refund of the 10% they’ve already paid as an option to buy. Normally, the only way to ‘recover’ this 10% is simply to complete on the property at a notary, period.

This post is simply a gentle reminder on the gravity of signing such a contract whereby a buyer in fact legally commits to buy a property in Spain. And if he doesn’t, there is a price to pay in the form of the 10% already handed over to the seller on signing the PPC.  The lesson we can glean from this is that a buyer should only sign such purchase contracts if they are resolute and committed, being fully aware of the legal and financial consequences of signing such a contract.

 

At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 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 services:

 

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

2021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Balearics social-communist government expropriates 56 privately-owned houses for ‘social use’

Raymundo Larraín Nesbitt, March, 3. 2021

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - abogado
3rd of March 2021

 

Here we go again.

I wasn’t planning to publish my next blog post until the 11th of March, but given the gravity of the news, I am forced to pull it ahead of time.

The Balearics regional social-communist government decided yesterday to expropriate 56 privately-owned properties for ‘social use.’ You can read the amazing press clip here. You can find a list of all confiscated properties here.

This is an unprecendeted historic event which had never taken place before during Spain's young 44-year-old Democracy. We need to go all the way back to the 1930's, to the expropriations instigated by the II Spanish Republic (also run by communists), to witness this. Events like this one, and many others, would eventually lead to the downfall of the Second Republic which would be overthrown by the forces of General Franco in a coup, unleashing the Spanish Civil War and leading us to a dictatorship that lasted 36 years, until Franco's death in 1975.

The good part of this terrible news is that:

  1. These properties belong to large stakeholders such as lenders and real estate funds.
  2. The properties hadn’t been used over the last two years.
  3. The Balearic government will pay €1.8mn as compensation to the rightful owners.
  4. They have only expropriated the use, not the ownership, over the next 7 years.
  5. The properties will be destined to social housing.
  6. The Balearics government will self-decide (read impose) the monthly rental.

In light of the above six points, you'd think it’s not such a big deal after all, right? Wrong!

The 1.8mn euros is less than half of what they'd get renting out the properties themselves, even at today's depressed market values.

You are likely thinking these properties belong to fat cats, so stuff them. The problem with this line of thinking is where do you draw the line? Fat cats or not, property rights must be upheld for everyone by everyone. Otherwise, who is to say the day after tomorrow who will be next in the pecking order, maybe you?

In the 1930’s Nazi Germany it all started fairly innocently at first; one day the then democratically-elected Nazi Government (let us not forget Hitler rose to power on the back of winning the elections, democratically) decided that one could no longer deduct medical invoices from Jewish dentists on the Social Security. No biggie, right? You could always find another dentist who wasn’t a Jew, who cares, right? We all know how that story ended up. Well, it turns out I care and so should you, and a lot. If we don’t learn from the lessons of our past, we are truly lost, we are bound to repeat the same mistakes all over again.

When governments, even democratically-elected ones, start to curtail citizen’s rights, such as private ownership, and erode our freedoms enshrined in the Spanish Constitution, it sets out a very dangerous precedent. Because, again, where do you draw the line? Is expropriating properties from affluent individuals also acceptable? What makes one affluent anyway? Having more then one million euros net, half a million? See where I am getting at? Yesterday was fat cats, today is affluent people but tomorrow it could be you. Such reckless and dangerous decisions taken by irresponsible politicians open Pandora’s box.

Well, you may think, surely the Spanish Central Government (Madrid) will step to rein in this unruly behaviour in the nation's best interests! Well, it won’t. And the reason is because Spain’s government is also led by a social-communist coalition. In fact, the same one as in the Balearics, so expect Madrid to do nothing about it, nada.

I really don’t want to drag on and on about the negative consequences this bad news has for everyone because to my mind the consequences are only blatant:

  1. It creates massive legal insecurity. This action is clearly unconstitutional.
  2. It tarnishes Spain's reputation as a country with a stable legal framework in which you can safely invest in.
  3. When the foreign press catches wind of this, it will deter foreign investments in Spain to no end. Exactly what we needed in the midst of a II Great Depression with over 6mn Spaniards unemployed (the Spanish Communist Government officially only recognizes 4mn unemployed).
  4. The Balearics government are looking to artificially impose rental prices at the expense of private owners to further their political agenda.
  5. Stupidly, on doing this, other landlords will grow fearful of this aggressive market interventionism and withdraw their properties from the market altogether.
  6. This in turn will create a shortage of available properties which, following the law of demand and supply, will push rental prices higher at a time when they were in fact nose-diving with the crisis as we’ve reported repeatedly. This reckless regional government planning leads to nasty market price distortions.

You really couldn't make it up, Good Lord.

Seriously, how more dafter and incompetent can our politicians be in this country? Somehow, they always manage to pull it off finding a new low. Is it a requirement to have an IQ of 60 and have never worked in your life to be a successful politician in Spain? Honest to God, these people drive me nuts.

Whatever will be next? Bank deposits confiscated for the so-called 'social good'? A very dangerous and reckless move that sets in motion an even more dangerous precedent straight out of the playbook from Maduro’s Venezuela ("exprópiese"). Venezuela, that 'lovely' political model that ensures wealth and prosperity for all its citizens *cough*. Venezuela happens to be a role model for our Madrid communist government who trip over themselves to flatter the regime (read dictatorship) and often quotes it as "an example to follow". Yeah, right.

As night follows day, you can bet your bottom dollar these property owners, who’ve been illegitimately confiscated out of their properties, are now putting the matter in the hands of competent lawyers who will appeal the Balearics daft law of 2018 and yesterday’s 56 expropriations. And you can also bet they will win, eventually.

If the powers that be do not act decisively, eradicating the disease from the root, it will spread like wildfire to other parts of Spain; particularly to those regions with a strong political affinity. Pedro Sanchez needs to grow a backbone and start taking harsh decisions, otherwise the disease will metastasize and infect the whole country. What we need to understand is that these ideologic zealots are always in constant competition to outdo one another proving who is more communist. Communism is cancer, a disease that has killed hundreds of millions of human beings the world over and has driven into poverty hundreds of millions more. It has killed far more people than what Nazis and Covid-19 combined ever did. If no action is taken, we will witness how hundreds of other empty properties are expropriated all over Spain for 'the greater good'. And this in turn will exacerbate Spain's political instability furthermore. Spain sorely needs a leader that heals and unifies the country, reconciling both sides, not someone who constantly sows dissension and stokes the flames of political division, polarizing the country, for his own selfish political gain. We already saw in 1936 what lies down that rabbit hole, thank you very much.

I've still to meet anyone whose life Communism has improved aside from its 'beloved' leaders, granted. I've never known of a communist leader who wasn't a multimillionaire, and you?

“Als die Nazis die Kommunisten holten,
habe ich geschwiegen;
ich war ja kein Kommunist.

Als sie die Sozialdemokraten einsperrten,
habe ich geschwiegen;
ich war ja kein Sozialdemokrat.

Als sie die Gewerkschafter holten,
habe ich nicht protestiert;
ich war ja kein Gewerkschafter.

Als sie die Juden holten,
habe ich geschwiegen;
ich war ja kein Jude.

Als sie mich holten,
gab es keinen mehr, der protestierte.”

 

Loosely translated as: “First they came for the Communists and I did not speak out because I was not a Communist. Then they came for the Socialists and I did not speak out because I was not a Socialist. Then they came for the trade unionists and I did not speak out because I was not a trade unionist. Then they came for the Jews and I did not speak out because I was not a Jew. Then they came for me. And there was no one left to speak out for me.

Martin Niemöller (1892–1984). Was a prominent Lutheran pastor in Germany. He emerged as an outspoken public foe of Adolf Hitler and spent the last seven years of Nazi rule in concentration camps. He is perhaps best remembered for his above postwar words. Wise words we should heed.

 

 

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

2021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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How to pay less tax on selling property in Spain

Raymundo Larraín Nesbitt, March, 1. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.


By Raymundo Larraín Nesbitt
Lawyer - abogado
1st of March 2021


Springtime fast approaches. It is again that time of the year in which buyers' ‘nest' instincts quick in, driving estate agents into a buying frenzy. 

With this in mind, I’m writing a short post as a gentle reminder on how to greatly reduce your tax bill on selling property in Spain.

Whilst understandably most buyers are giddy on buying, and have anything on their minds other than selling, the fact is that if you want to greatly mitigate your tax bill on selling, you should plan ahead. Ironically, the best time to do this is when you buy a property in Spain. Planning ahead is key to pay a low tax bill.

Smart buyers will safely store a series of VAT invoices and taxes on buying to greatly reduce their CGT liability on selling, even years on. We collate below a list of taxes and invoices that may be offset against your CGT, on selling, greatly reducing your tax bill.


List of expenses that can be written off

 

On selling property in Spain, your lawyer can write off a series of acquisition & sales expenses that greatly reduces your profit, for tax purposes. As you are taxed on the profit you've made, the translation of this is that you pay very low taxes on selling.

In fact, if done right, a non-resident seller is entitled to a 3% CGT tax rebate, plus legal interests. That's a great deal in taxes a company like Larrain Nesbitt Abogados can save you.


1) On buying


•    Lawyer’s fees 
•    Notary fees 
•    Land Registry fees 
•    Taxes (yes, taxes on buying can be fully offset)


2) On selling


•    All property-related improvements (not maintenance costs) i.e. glass curtains, refitted kitchen, roof retiling, wood flooring, A/C installation, house alarm, etc.
•    Estate agent's commission
•    Lawyer’s fees


Conclusion


Speaking from experience, I know it’s challenging for most buyers to be thinking of sales taxes on buying. Most people are enthralled by the colour of their new curtains, their fancy walk-in closets, the breath-taking sea or mountain views, the infinity pool, the lush tropical gardens and such trifle details.

However, it is my dull job to throw on a damper on buyer’s warm & fuzzy mood, and gently remind taxpayers that you can save yourself a great deal in taxes on selling (in most cases dozens of thousands of euros) if you follow my above tax advice. You're welcome.

 

“But one type of book that practically no one likes to read is a book about the law. Books about the law are notorious for being very long, dull, and very difficult to read. This is one reason many lawyers make heaps of money. The money is an incentive – the word “incentive” here means “an offered reward to persuade you to do something you don’t want to do – to read long, dull, and difficult books.” – Lemony Snicket, The Bad Beginning

Daniel Handler (1970). Is an American writer and musician. He is best known for his children's series A Series of Unfortunate Events and All the Wrong Questions, published under the pseudonym Lemony Snicket.

 

At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 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 services:

 

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

2021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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Revista Imágenes de Actualidad - cese de actividad

Raymundo Larraín Nesbitt, February, 18. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

Raymundo Larraín Nesbitt
21 de febrero 2021

 

Es con gran pesar que leo este mes que la revista Imágenes de Actualidad dejará de publicarse en lo sucesivo.

Imágenes es una revista sobre el mundo del cine, el cual me apasiona, que llevaba comprando desde 1994; la friolera de 27 años. Fue fundada en Barcelona en 1985, en formato fanzine, con carácter quincenal. Posteriormente, a finales de los años 80, pasaría a imprimirse en formato revista con periodicidad mensual.

Al menos a mí, me parecía la mejor revista del sector; amena en su lectura, rigurosa en sus análisis (sin traza de pedantería tan propio en este tipo de revistas), valiente en sus opiniones y siempre al día con la farándula de Hollywood.

Como ellos mismos se encargan de publicar en su último ejemplar, número 416, debido a los tiempos difíciles que corren, a la falta de estrenos cinematográficos, al cierre masivo de quioscos y otros puntos de venta, y en general, a la devastadora crisis económica que nos asola, se ven abocados al cierre.

Sin duda un golpe (muy) duro para todos aquellos fieles lectores que esperábamos ansiosos, mes a mes, poder disfrutar de la lectura del último ejemplar. Nunca he sido muy partidario de subvenciones estatales, la verdad, pero si hay una revista del mundo de la cultura y del cine que se lo merecía, sin duda era esta.

Es la primera vez en casi 20 años publicando artículos que escribo uno en español, pero la ocasión bien lo merecía. Deseo a todos los redactores y colaboradores de la misma, todo lo mejor en lo profesional y personal. Seguramente me acabaré suscribiendo a «Dirigido Por», su revista hermana, aunque francamente, no será lo mismo.

Que el cine os acompañe, siempre.

 

At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 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, 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 services:

 

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

2021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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