Spain to approve an additional Wealth Tax that will do more harm than good

Raymundo Larraín Nesbitt, December, 5. 2022

The Spanish government has approved another ‘temporary’ Wealth Tax on ‘big fortunes’ that is more about politics than economics, and likely to be counter-productive.

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 successfully assisting expats all over Spain. You can review here our client’s testimonials.

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

Introduction

Spain is different.

In order to better understand why Spain would approve a second Wealth Tax, I need to preface this article with a political digression on how we got here in the first place because this new tax is being introduced solely for political reasons, serving no other purpose.

Politics, always the politics

As frequent readers will recall, Spain already has in place another ‘temporary’ (read permanent) Wealth Tax, control over which was devolved to Spain’s 17 autonomous regions. This tax was once suppressed, and then reinstated again by a socialist government and applies nationwide (Impuesto de Patrimonio). Being a devolved tax Spanish regions have leeway to make adjustments as they see fit to the point of even suppressing the Wealth Tax.

In broad strokes, Spain is traditionally split into two ideological camps like many other countries:

1. Left-wing parties that favour higher taxes to finance the needs of an ever-expanding public administration, and increasing public expenditure to finance more services (health, education, etc).

2. Right-wing parties that favour low taxation and a slim but efficient public sector to dynamize the economy and increase employment.

These two opposing camps often clash on administrative and tax matters and coalesce on implementing different tax measures, depending on which side is ruling at any given moment.

Spain is now ruled at a national level by a coalition government of socialists and communists whose self-declared goal is to increase the fiscal pressure on taxpayers, which brings us to the new tax this article is about (known as ITSGF for short, explained below) to prop up an ever-growing public sector.

As I’ve already mentioned, Spain’s autonomous regions are run by governments of different political stripes. In the regions where centre-right parties have been elected like Madrid, Andalusia, and Galicia, they have put in practice (to great success) liberal fiscal policies that reduce taxation, even going so far as to suppress some taxes altogether like the original Wealth tax.

In these three liberal regions, as I have painstakingly recorded over the years through multiple articles, the economic phenomenon of Laffer’s curve can be observed. In a nutshell, this economic theory (penned by US economist Mr. Arthur Laffer) says that a tax reduction can actually increases tax revenue up to a certain marginal revenue point (only if supplemented by other measures, such as a reduction of public expenditure).

These regions have de facto suppressed both the Wealth Tax and Inheritance Tax, amongst many other tax instruments, as I’ve reported in several articles over the years:

 

The liberal fiscal policy pursued by these three regions has triggered strong economic growth with welcome consequences in those regions. Besides a notable increase in tax revenue, the unemployment rate has fallen, and foreign investment has increased. This resounding success is in stark contrast to the rest of Spain where economic policy has strangled the economy through higher taxation, fostering huge levels of unemployment.

Despite the success of liberal regions, the national government in Madrid has decided to enact a ‘new’ (second) Wealth Tax to quash the fiscal competencies of liberal regions under the cover of harmonising (read equalizing) the fiscal policy nationwide to avoid what they label as ‘unfair’ competition and fiscal dumping (Spanish anglicized made up word).

The frustrating thing is that all regions in Spain have the same freedom to pursue such liberal policies if they want to, prompting economic success on its wake, but they purposely deny themselves such an option because of their own ideology, which drags down their regional economies.

For example, take the case of Catalonia. This is one of Spain’s industrial and financial powerhouses whose rightful place should be at the forefront of the economy. However, the regional government has held the economy back through a series of misguided policies that reduce incentives for local companies to create jobs, and deter foreign investment. Take, for example Barcelona’s hostility to foreign property-investors.  

In a nutshell, the purpose sought by our government in Madrid through this new tax bill is primarily to exert control, negating all the successful fiscal policies lawfully passed by these three liberal regions freely exercising their constitutional rights, and bring them to heel in line with the rest of Spain’s (failing) regions under the government’s direct control.

This will no doubt have serious repercussions for the Spanish economy, because Madrid is Spain’s financial powerhouse. If you mess up Madrid’s economy, the country will hurt (badly).

New solidarity tax on the rich (impuesto temporal de solidaridad a las grandes fortunas, or ITSGF for short)

The instrument for this policy is a new ‘Temporary Solidarity Tax on Big Fortunes’ (known for short by its Spanish initials ITSGF) to be enacted on or before the 31st of December 2022 with retroactive effects to the 1st of January 2022. In other words, it covers all of the tax year 2022.

Its goal is to collect 1.5 billion euros a year from the ‘super rich’ (personally I’d call it a win if it even manages to rake in 300 million euros). As you can see from the wealth tranches below, it doesn’t take billions to be considered ‘super rich’ in Spain.

The ITSGF is divided into three tranches:

  • €3,000,000 to €5,300,000 – 1.7%
  • €5,300,001 to €10,600,000 – 2.1%
  • Over €10,600,001 – 3.5%

 

In practice, taxpayers have a minimum allowance of €700,000, so the above figures must take this into account, besides other personal tax allowance like a main home.

Unconstitutional

As mentioned above, the Wealth Tax was devolved to Spain’s 17 regions, as enshrined in Spain’s Constitution of 1978. It is no longer a (tax) competency held by Spain’s central government. The ITSGF in effect encroaches on a legal competency that was assigned to regional tax authorities and is constitutionally enshrined.

In other words, the central government has no business with the Wealth Tax, which is a matter for the regions, but that has not stopped it interfering with a new Wealth Tax dressed up as a ‘Solidarity Tax’ to gain an advantage over its political rivals by cornering them and negating their (economic) success.

Moreover, it is one of our general tax principles that you cannot be taxed twice for the same thing. It stands to reason that introducing a second tax that taxes exactly the same thing is unconstitutional and can – and should – be legally challenged at court.

Under normal circumstances, I can safely say this new politically motivated tax would be quashed by Spain’s Constitutional Court for self-evident reasons.

However, we are not living under ‘normal’ circumstances. We have a Spanish President whose pursuit of power has led him to ‘colonize’ all independent democratic institutions in the country by appointing his own people, which includes tarnishing the prestige and independence of the Constitutional Court itself by promoting two allies who give the government a majority of vote in this court. Therefore, the outcome of this law being repealed is uncertain, at best.

Impact on the overall economy

In short, negative.

This could prompt an exodus of affluent taxpayers, who will relocate to neighbouring states with low taxation, such as Portugal and Andorra. This will enable them to mitigate their tax bill, within the law.

It will also disincentivize foreign investments in Spain. At a time when Andalusia (but also Madrid and Galicia) were attracting substantial foreign investments that translated into the creation of jobs and higher tax revenues, this new tax will throw a spanner in the works, dampening the business mood.

This new tax is – clearly – politically motivated having no economic or legal logic to it, to put it mildly. In fact, we can credit our President Mr Sanchez as the creator of political taxes that serve no discernible purpose other than to create a political advantage of sorts; even if it’s at the expense of the whole country.

Podemos, the pro-Russian, hard-left junior partner of the socialist government, has basically pushed for this law to be passed if Mr. Pedro Sanchez wants to secure their political backing in the new upcoming national elections in 2023.

But ultimately, it’s not even about this tax.

It’s about taking away the freedom and (tax) competency of autonomous regions and placing them under the control of a central government that seeks to quash any and all dissension and freedom, ‘equalizing us all’. Ironically, Mr. Pedro Sanchez is acting much as General Franco did under his loathsome four-decade dictatorship, killing freedom.

Spain’s future is bleak

An economic meteorite is heading towards Spain in the shape of a ballooning public debt (€1.5 trillion) and soaring interest rates.

Unless decisive action is taken, either by the EU, or by a new government that adopts sensible economic policies such as lowering taxes and reducing public expenditure, Spain could find itself in a very delicate situation where it has difficulty borrowing and/or even repaying the (high) interests of its public debt. If, on top of this, its credit-rating takes a tumble, like it did during 2011-2013, it could push the country over the edge.

I get how most politicians are not economists and tend to overspend and overpromise with an eye on poll day. I really get it, it’s part of the game we call democracy.

However, when the ambitions of the few threaten the welfare of the many, we need to put checks and balances in place. And that onus, I’m afraid, now falls on our EU Overlords to rein in the exuberant excesses of our deluded political class.

For it is clear Spanish politicians are not up to the task, and their complacency blinds them from stepping up and taking responsibility for our economic future. Short-sighted career politicians who take decisions on the hoof, based on short-term opinion polls, are a nuisance under normal circumstances, but they can become a big liability when the economy slows down and is derailed by high inflation.

Next year we have general elections in Spain, so our government is in overdrive hyping all sort of promises and financial commitments to secure votes and political allies across the left of the political spectrum. Foremost amongst the government’s main objectives, in view of the general elections, is to bring down unemployment (13%, the highest out of any OECD country, that’s out of 38 member countries) that most affects collectives such as women and young adults. To ‘massage’ the high unemployment figures, which don’t reflect well in polls, the government has been busy hiring public-sector workers at full throttle using public money, and EU money.

A few key figures to keep on mind on where Spain is heading next economically:

  • 80% of all new jobs created in Spain have been in Spain’s (bloated) public sector, fostered by the government.
  • On average, the wages in the public sector are 70% higher than those in the private sector.
  • Over 75% of the much-vaunted EU’s NextGen funds have been allocated to public administrations! In other words, they have not reached SMEs (which constitute 90% of Spain’s productive industry) nor millions of ailing Spanish families who (literally) cannot afford high energy bills and struggle to make ends meet every month.
  • Spain’s fiscal pressure is 27% higher by comparison to fellow EU countries.
  • Spain spends over 300 billion euros a year in pensions and civil servants' wages. In 2005 civil servants' wages were 7.5% of GDP, now in 2022 they are almost 13% (its almost doubled).
  • Over 300 companies a day are filing for creditor protection in Spain (the highest figure on record, even surpassing that of 2011-2013 when Spain almost defaulted on repaying its high interests and was on the brink of being bailed out by the EU as the country’s credit-rating took a plunge) which means thousands of workers are losing their jobs every day.
  • And last but not least the most severe one: Spain’s public debt has ballooned by over 30% under the incumbent, to a staggering record-breaking 1.5 trillion euros (€1,500,000,000,000). That’s over 133% to GDP of debt! Every day another 300 million euros is piled into this debt. This is by a long shot the most serious figure of all.

 

So basically, what our government is doing is ploughing forward with blinkers on, over-indebting the country, and using all that borrowed money to hire yet even more civil servants with an eye on the next general election. In the words of Oscar Wilde: “The bureaucracy is expanding to meet the needs of the expanding bureaucracy.”

In a context of ultra-high inflation, where central banks are ‘forced’ to hike up interest rates like there is no tomorrow month after month, owing 1.5 trillion euros can pose a real threat for Spain’s ability to repay back loan interests in the future, let alone the principal.

It is no longer far-fetched to imagine a scenario of interest rates reaching two digits over the next two years, much like in the eighties. This would seriously compromise Spain’s ability to repay its ever-growing debt interests, even compromising its borrowing ability unless the ECB keeps its policy of open hands.

If Spain continues its present course unchecked, it does not seem unreasonable to expect  ‘issues’ on repaying its loan commitments, or even raising new debt. As Italy’s situation is not much better, the European Union, in order to ensure its very own survival, should really start to rein in the borrowing of Spanish politicians and school them on the benefits of a frugal economy: to save money, invest it wisely, and think about the long run; not to overspend it and take on more and more loans they can’t repay.

Spain’s economy is not as resilient and strong as that of Germany; we categorically cannot be burdened with such high public debt figures in the long run least it compromises the economic viability of the country itself.

Better oversight

The EU should seriously consider monitoring where the over 130 billion euros in EU money sent to Spain is going. No one seems to know what this money is being spent on.

The EU’s high commissioner, Ms. Monika Hohlmeier, appointed to oversee the expenditure control of the EU’s Next Gen Funds across all EU member States, recently declared in an interview: “I have no clue what Spain is doing with it (EU funds)”. We could always ask Spain’s own national commissioner to shed some light on the matter but, oh wait, she resigned early on this year, so that’s that.

Billions of euros in EU taxpayers’ money are being squandered and no one knows where it’s going, and no one is held accountable. But clearly these EU rescue funds are not reaching struggling families or ailing SME’s, which was precisely the whole point of the Covid rescue funds.

I wrote an admonitory article on this almost two years ago: Now you see it, now you don’t - 12th February 2021

Conclusion

It is clear to me that Spanish politicians are burying their heads in the sand, refusing to acknowledge the harsh reality of a sharp rise in interest rates, all the while consumed by their own petty squabbles.

Unless the EU steps up, and acts decisively (even if spurred to act out of self-interest to ensure its own preservation), Spain will head down a dangerous path that could lead to repayment issues on its vast public debt.

As much as we are all (very) grateful to generous EU taxpayers’ solidarity through the Covid rescue funds (NextGen funds), the truth of the matter is that the EU is spoiling Spain like a child indulging it on its reckless credit addiction. Spain needs to grow up and face the harsh reality, adapting its economic policy to become more competitive and resilient in a digital economy, to reduce its overall expenditure (does our government really need 22 ministries?), to curb its insatiable reliance on public debt.

Madrid, Andalusia and Galicia have shown us there is an alternative, a way out of this vicious credit spiral through the pursuit of liberal policies that have helped their economies boom, unlike in the rest of Spain.

I fully understand that overcoming bipartisan rivalries is easier said than done, granted, but Spanish politicians really need to get their act together and start thinking about tomorrow, adopting a grand long-term strategy for the good of the country and its people, instead of just living for today burning borrowed money like there is no tomorrow; much like in Aesop’s fable of the ant and the grasshopper. Winter is coming.

The core argument I try make in this article is that the new ITSGF bill is a bad idea that exemplifies everything that Spain’s government is doing wrong economically, and that we ought to avoid at all costs. It is primarily a political tax whose purpose is more about firing up the base than raising tax. This government has proven adept at pinning the blame for economic woes they’ve helped create on easy targets such as banks, utility, and energy companies, and now the latest villain, the ‘super-rich’ (insert evil laughter here).

Back on planet earth, if our EU Overlords do not act to rein in Spain’s credit addiction, as clearly Spanish politicians are not fit for the task, Spain will endure serious financial problems in the future that could even threaten the EU itself.

The European Union is -without a shadow of doubt- the most ambitious and greatest political achievement of humankind of all time; a living testament to those eleven men that made it possible and averted all future wars in European soil. We should not jeopardize its future turning a blind eye on spoilt nations that are hell bent on inflicting themselves self-harm and which may even, in the near future, pose an existential threat to the strength of the Union.

There is still time to correct the course avoiding the choppy waters ahead. The EU must intervene and curb Spain’s unbridled craving for public credit embodied by Mr Sanchez. It is in the Union’s own best interests to put an end to it.

 

Españolito que vienes

al mundo te guarde Dios.

una de las dos Españas

ha de helarte el corazón.” – Antonio Machado

Antonio Cipriano José María y Francisco de Santa Ana Machado y Ruiz (1875 – 1939). Brilliant Spanish poet and one of the leading figures of the Spanish literary movement known as the Generation of ’98. Died in imposed exile during the fratricidal Spanish Civil War. He is credited as being one of Spain’s most popular poets. Amongst his timeless classics, Campos de Castilla stands head and shoulders above the rest.

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 taxation, immigration & residency visas. 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.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 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. Ní neart go cur le chéile. VOV.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

Copyrighted © 2022. Plagiarism will be criminally prosecuted.

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Spanish contracts: Read & review service and contract-drafting

Raymundo Larraín Nesbitt, November, 7. 2022

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 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 November 2022

When you buy, sell, or rent a property in Spain you will no doubt be shown a contract in Spanish chock-full of legal jargon. It is only normal you start growing nervous, even feeling a knot at the pit of your stomach. Our law firm offers you two legal services that remove all the stress and anxiety so you, and your family, can enjoy Spain at its fullest!

The best advice I can give you is to hire legal council before you sign on any contract. This is when costly mistakes can be avoided, by pre-empting them. Both landlords and tenants should instruct their own separate legal representation.

Larrain Nesbitt Abogados offers two competitively priced contract services:

1. Read & Review service

 

We offer this service nationwide. On buying/selling/renting out a property in Spain, it is advisable a lawyer is hired from the onstart to protect your interests. This legal service is thought for tenants, but landlords can also make use of it.  We strongly advise tenants to seek legal council prior to signing on the dotted line. Once signed, contracts are binding. Ignorance of Spanish laws will not protect you from performance.

  • Tenant, did you know that if you do not word correctly your tenancy agreement your landlord can pocket your full security deposit or charge you multiple months of security deposits?
  • Tenant, did you know that some devious landlords include clauses that make tenants responsible for previously broken kitchen and household appliances, forcing them to repair or replace them?
  • Tenant, did you know rental increases are now capped by law? Only this tip can save you several hundred euros every month in the context of soaring inflation.
  • Tenant, did you know that some landlords push ‘11-month’ rental contracts to circumvent your legal rights?
  • Tenant, did you know that the Spanish version of a contract always overrides that of any translation? It is not unusual for agreed terms to get ‘lost in translation’ in the Spanish version…
  • Tenant, did you know that in some cases it is the landlord that must pay – by law – the agent’s commission on finding you a rental accommodation? Only this tip saves my clients thousands of euros in undue commissions.
  • Tenant, did you know that in some type of contracts in Spain, if you pull out ahead of time, you are still legally liable to pay your landlord a full year’s rental? This tip not only saves you money but also from protracted litigation proceedings.

 

I can honestly say that clients who hire this service save more money than what we charge.

We review the following standard contracts within 24 working hours (as from payment received):

  • Lease agreement (rental contract), long-term or holiday rentals, seasonal contracts
  • Purchase contract
  • Sales contract
  • Option to buy contract (let-to-buy)

 

We offer the following service (T&Cs apply): Contracts (read & review)

Flat fee: €100 plus vat

2. Contract-drafting

 

We offer this service nationwide. Tenancy laws are traditionally biased towards tenants in Spain. Which is why we strongly advise landlords to instruct a lawyer to protect their interests. This is a service geared towards landlords, as they are the ones that will normally draft a rental agreement. Professionally drafted lease agreements avoid landlords many problems on the long run, saving them money and aggravation.

  • Landlord, did you know that under new rental laws a tenant can legally stay in your property for up to 8 years, or even 10 years? There are ways around this.
  • Landlord, did you know that you can legally override lenient tenant entitlements on choosing the right type of rental contract?
  • Landlord, did you know there are legal ways to recover the possession of your property ahead of what’s contractually agreed?
  • Landlord, are you aware there are several types of rental contracts available in Spain, that range from overprotective (read tenant-biased) to landlord-friendly ones?
  • Landlords, beware of internet rental templates that perpetuate themselves over time, they are a recipe for disaster as rental laws are frequently amended.

 

Lease agreements completed within 48 working hours in Spanish, English, or both languages:

  • Residential (long-term rentals).
  • Holiday lettings (short-term rentals).
  • Seasonal lets (short or long-term).
  • Commercial leases.

 

We offer the following service (T&Cs apply): Rentals (contract drafting)

Fee: starting from only €200 plus vat

Recent LNA testimonials on these two services:

Larrain Nesbitt Abogados provides an excellent service and I have been using them for several years for my Spanish property legal services. The turnaround time is extremely quick and the quality is excellent – I highly recommend, LJ London

LJ, London, United Kingdom. September 2021

We would like to thank you for your very prompt response and advice. It was very considered, concise and to the point, not what we were hoping to hear, but sometimes that’s the best advice. We were able to process accordingly and do the best by my parents without getting engaged in further unnecessary dispute and argument.”

Barbara & Niall McKenna, Republic of Ireland. December 2021

“Many thanks for your advice and adapting the agreement in right legal terms.”

DSB, England, United Kingdom. March 2022

Thank you for your exceptionally competent expert advice. I am so grateful.”

Marie Löfstedt, Sweden. April 2022

If you are looking for a legal expert, Raymond is your guy. As Expats, we were presented with a long term rental lease and asked Raymond to look it over. Do yourself the favor of having him look over your contract before you move in. It is a small price to pay for piece of mind and could save you lots of money in the long term. His advice prevented us from getting taking advantage of. I am so grateful we found Raymond and will definitely use him again in the future.”

Suzanne Cohen, United States of America. August 2022

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

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

Copyrighted © 2022. Plagiarism will be criminally prosecuted.

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Spain’s Digital Nomad Visa

Raymundo Larraín Nesbitt, October, 7. 2022

Lawyer Raymundo Larraín runs through the main highlights of this long-awaited new 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
8th of October 2022

The Digital Nomad Visa (DNV, going forward) was first introduced by the new Start-up Law, which was passed last December 2021. The DNV sets a milestone as it effectively breaks the mould on what we’ve come to expect from a Spanish visa. In a nutshell, it introduces great tax breaks (for both employers and employees), streamlines the visa procedure (reducing waiting times), it allows for greater freedom, and most fundamentally reduces the admin control on applicants. Less red tape is always bueno.

It’s no secret the expectation for the approval of this visa is off the charts. It is hands down the most anticipated visa. For the avoidance of doubt, the DNV is in its last stages of approval, so it is still a draft bill. We expect it to be passed over the next months.

The self-declared purpose of this visa is to attract talented foreign individuals to Spain, paving the way with exciting tax breaks that will likely turn the DNV into the second most sought-after visa after the coveted Golden Visa.

The winds of change blow, and times move on. Most traditional visas in Spain – which are decades old – have become outdated and no longer address appropriately the needs of modern workers in a digital economy. There is a huge pent-up demand for a specific visa that caters to digital workers that work from home remotely. This demand has fostered the creation of a specific visa that caters to the needs of digital workers, pandering to them.

The advent of the Covid 19 pandemic opened up new opportunities to work from home, normalizing and consolidating the demand for telecommuting, which has now become generally accepted. The Spanish Government was quick to pick up on this new trend and wishes to capitalize on it. To that end, it has devised a specific DNV that plugs this gap, attracting talented foreign individuals and investments on its wake. The DNV is the first of its kind in a new generation of modern visas that target specific collectives, with enticing and unique advantages.

As a disclaimer, I stress again the DNV bill is still on its last draft stage, meaning its wording may yet be subject to amendments before approval. I collate below in bullet points its main advantages and requirements, but with the caveat that some of the highlighted points below may yet be altered by lawmakers on being enacted.

Main advantages

  • Five-year residency permit. Initially on a one-year application, followed by two-year renewals up to a total of 5 years. The visa extends to the family of the main applicant.
  • Allows you to work in Spain remotely. Moreover, it encourages you to work in Spain, specifically remotely with your laptop (or desktop if you happen to be a dinosaur like me). Unlike other Spanish residency permits (i.e. Non-Lucrative Visa which bans you from working in Spain, even remotely) this visa actively promotes you working in Spain (remotely).
  • Allows you to legally override the 90/180-day rule that limits stay in Spain (and by extension in the Schengen Area/EU).
  • Tax breaks for the foreign employer (if it has an establishment in Spain)
  • Tax breaks for the employee (DNV applicant). This is the core advantage. It basically applies a privileged non-domiciled tax scheme to visa holders that allows them to pay a flat tax rate of only 15% on the first €600,000 of gross annual earnings over a five-year period. Over and above said threshold, they are taxed at the standard top marginal rate of 47%. In plain English, the so-called Beckham Law applies to them which creates a legal fiction whereby they are treated as if they were non-resident in Spain for tax purposes, attracting a privileged tax rate. This greatly empowers digital nomad visa holders to legally circumvent the standard IRPF tax sliding scale that applies to the rest of us punters who are tax resident in Spain. Ah yes, so much for equality.
  • The legal limitation to benefit from the non-dom tax scheme of 5 years is waived and extended up to 10 years.
  • The standard limitation of not having being resident in Spain over the previous 10 years is reduced to only 5 years.

 

Requirements

  • You need to prove you are hired by a foreign company. This is the core requirement. I.e. a freelance IT artist with a contract.
  • You need to prove you have formal academic qualifications (i.e. 3-year university degree).
  • You need to prove you have at least 3 years of work experience.

 

In conclusion

The Digital Nomad Visa addresses a gap for high-end professionals that wish to relocate to Spain, alone or with their families, and enjoy all the country has to offer, including ultra-low taxes, regardless of where they settle down in Spain.

In effect, you get the best of both worlds; you get to enjoy all the perks of being resident in Spain albeit you are fiscally treated as a non-resident, paying (much) fewer taxes. In my book, that’s a win-win.

Once approved, our law firm will offer this visa service: Digital Nomad Visa

LNA has a 100% track record of attaining Spanish residency

 

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

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.

Copyrighted © 2022. Plagiarism will be criminally prosecuted.

... Read more

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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