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Beckham’s Law Explained (Spain’s Non-Domiciled Tax Scheme)

Raymundo Larraín Nesbitt, November, 1. 2023

Lawyer Raymond Nesbitt explains to us one of four legal ways to bypass the pesky 90/180-day rule that now affects all UK nationals post-Brexit.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 20 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
1st November 2023

In 2015, Spain introduced a special tax regime for wealthy EU expatriates who relocate to Spain. Following in the footsteps of other countries’ successful non-domiciled tax schemes, namely the United Kingdom, the self-declared goal of this programme is to attract high achievers to relocate to Spain on the back of a job offer. The typical taxpayer profile that qualifies would be a high-profile artist, techy, high-ranking corporate employee, etc. Over 10,000 foreigners settled in Spain have benefitted from this special tax arrangement.

In a nutshell, this tax scheme allows EU nationals to make spectacular tax savings on paying Income Tax in Spain (IRPF). If you opt into this scheme, you stand to benefit from substantial tax breaks on both income derived in Spain as well as worldwide income.

On opting into this special tax regime, a legal fiction takes place whereby EU expats are treated (for admin purposes) as if they are a resident taxpayer in Spain. Albeit in practice, for tax purposes, the taxpayer is regarded as a non-resident. Meaning you in fact get the best of both worlds; you get all the perks from being legally resident in Spain, yet you pay a substantially lower tax bill as you are deemed in practice as a non-resident taxpayer.

Who can apply?

Any European Union national relocating to Spain as a result of a professional contract. You need to be hired by a Spanish company or else by a foreign company with a permanent establishment in Spain. The contract is the core requirement to opt into this tax scheme. Non-EUs may also apply but may require a visa to live and work in Spain. Non-EUs are advised to benefit instead from a Digital Nomad Visa, which offers almost identical tax benefits and is also a visa permit.
Not to have resided in Spain on the previous 10 years.
No earnings derived from a permanent establishment in Spain.

The tax benefits

Spanish income. The first €600,000 earned from a source within Spanish territory will be taxed at a flat rate of 24% (in lieu of the standard top marginal rate of 47%). As can be surmised, even for earnings whose source is derived exclusively in Spanish territory, the tax savings are huge.
Worldwide income. However, it is here where this tax scheme truly shines and comes into its own. Spanish Tax Authorities only tax you on your income derived within Spanish territory. Meaning, any other source of worldwide income is tax-exempt (just like with the popular UKs non-dom tax scheme). Needless to say, this unique tax advantage offers a hugely attractive prospect for those taxpayers with substantial earnings, assets, and interests overseas. The only exception is any income derived abroad from working.
Exempt from submitting tax return 720
Exempt from submitting wealth tax *
Five years plus one. Because of its outstanding tax advantages, the government time gates the tax benefits. It applies on the fiscal year of relocation as well as on the following five years (total up to six years).

*contingent on the value of your Spanish estate.

Potential disadvantages

As written above, a legal fiction applies whereby you are regarded as a non-resident taxpayer (non-domiciled). The implication of this is that as you are not regarded as a tax resident, you may not benefit from lenient tax allowances on personal income tax as would be standard practice.
This tax scheme only works out if the taxpayer's country of origin has a double taxation treaty in place with Spain.

Conclusion

Beckham’s Law addresses a gap for high-end professionals who wish to relocate to Spain (on the back of a job contract), 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 i.e. in Mallorca.

If you are a high-flyer, don’t fancy paying many taxes, and wish to relocate to Spain (legally), this is the tax scheme for you. Give us a call!

In effect, this blue-ribbon tax scheme allows you, and your family, to get the best of both worlds; you get to enjoy all the perks of being legally resident in Spain albeit you are fiscally treated as a non-resident taxpayer, paying little to no tax. In my book, that’s a win-win.

At Larrain Nesbitt Abogados, we offer the following immigration service: Beckham's Law

“I don’t do anything unless I can give it 100%.” – David Beckham

David Robert Joseph Beckham (1975). OBE. Born in a humble background, from a young age he became a footballer, quickly rising through the ranks given his innate talents, becoming England’s captain. He retired after a very successful 20-year career, during which he won 19 major trophies. He married a spicy posh businesswoman, and they’ve had four children. He’s a known philanthropist who has created several football academies to benefit children who come from deprived backgrounds. Surprisingly – and most annoyingly – he hasn’t been bestowed (yet) the title of ‘Sir’, despite others attaining it with half of his accomplishments.

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

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Spain’s Non-Lucrative Visa Explained (Pensioner’s Visa)

Raymundo Larraín Nesbitt, October, 9. 2023

Lawyer Raymond Nesbitt explains to us one of four legal ways to bypass the pesky 90/180-day rule that now affects all UK nationals post-Brexit.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8^th of October 2023

The non-lucrative visa has proven wildly successful over the last few years. The typical applicants are a retired couple who wish to spend their twilight years enjoying the very best of the gorgeous Spanish weather & fine food at affordable prices.

Please note this visa service is only open to non-EU residents (i.e. British). NLVs make you tax resident in Spain.

NLV general requirements

Not to be already in Spain illegally at the time of making the application.
Clean criminal record (previous 5 years).
Hire your own health or medical insurance (full coverage) with a Spanish healthcare provider (applicants must be under 75 y.o. to apply).
€29,000 in savings for the main applicant. For every additional dependant, you need to add a further €8,000.
You must not suffer from any of the diseases that may have serious public health repercussions.
Proof you can secure accommodation in Spain.
You cannot work in Spain, you can also not be working at the time of making the application.

LNA offers the following visa service (Ts & Cs apply): Non-Lucrative Visa

What’s holding you back from enjoying a well-earned retirement? Give us a call.

You can call us at our UK line: (+44) 07543838218

LNA has a 100% track record of attaining Spanish visas & residency permits

Larraín Nesbitt Lawyers, small on fees, big on service. Your family’s success is only one call away: (+44) 07543838218.

At Larrain Nesbitt Abogados, we have assisted hundreds of EU and non-EU nationals to successfully attain Spanish residency permits & visas.

Interested? Come and speak to Larraín Nesbitt Abogados’ friendly staff who will be pleased to guide you through the different residency options, choosing the one that appeals to you most.

Other residency services available from LNA:

Golden Visa (Investor Visa)
Digital Nomad Visa
Lucrative Visa
Non-Lucrative Visa
Marriage Visa
Spanish Residency permit for EU nationals

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How to discharge a mortgage loan in Spain

Raymundo Larraín Nesbitt, September, 11. 2023

Lawyer Raymundo Larraín outlines the procedure to cancel your mortgage loan in Spain attracting little to no tax.

How to discharge a mortgage loan in Spain

Marbella-based Larraín Nesbitt Abogados (LNA) has over 20 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of Septermber 2023

Introduction

The sharp rise of interest rates over the last 12 months, has prompted scores of borrowers to look into cancelling their Spanish mortgage loans. This is done to avoid servicing large monthly repayments.

Mortgages, besides their obvious purpose of financing a house purchase, have long been used by lawyers and accountants as a useful tool to reduce clients’ tax burden. With careful forward tax planning they prove extremely helpful to mitigate client’s overall taxes. It is for this very reason that even wealthy individuals (that do not really need them) actually apply for them to benefit from the lenient tax breaks available.

However, when an inflection point is reached of high interest rates – such as the one we are now in – clients are inclined to re-assess their tax planning strategy and lean to discharge them.

Additionally, on selling a property, a buyer, or his lawyer, will demand from the seller they cancel the existing mortgage loan. Properties need to be sold with a clean title.

With this in mind, in today’s article we give a brief overview on the procedure to fully discharge a mortgage loan in Spain. Unlike other countries, the conveyance procedure involved is not automatic and requires the input of a seasoned lawyer. You will need to instruct a lawyer to carry it out on your behalf (with a specific power of attorney, or POA). This is not a legal procedure that can be followed by laymen.

Preliminaries

Your lawyer, in use of a specific POA will contact your lender and start the procedure.

The bank needs to agree to it. The borrower is free to choose a notary of his choice to formalize the procedure. The legal representative will sign several documents with the lender. Almost every mortgage loan applies a small penalty for early redemption.

The borrower will finish paying off the balance presented by his lender, with penalty interests rolled on top.

Signing the deed

A bank’s representative will then attend the notary of choice and sign a deed fully discharging the mortgage loan.

In plain English, the property is now legally ‘freed’ from the encumbrance. But it doesn’t stop here.

Land registry

The notary deed then needs to be lodged. Once done, the property will appear as free of charges and encumbrances.

How long does it take?

Overall, you are looking at 2 to 3 months on average, always dependant on how fast a lender accommodates you.

Conclusion

Mortgage loans in Spain are not cancelled automatically when you finish paying them off.

Moreover, banks are perfectly content leaving a mortgage charge against a property indefinitely (as it improves their ratios in investor’s eyes), even when the mortgage was paid off long ago. Lenders are in no rush whatsoever to discharge them, and it takes the proactivity of a lawyer to gently nudge them time and again to cancel them over the course of several months. Without a shadow of a doubt, one of the most aggravating tasks that falls on lawyers, is precisely this; assisting borrowers to cancel them as there is a huge amount of red tape involved.

On paying off a mortgage loan, you ought to cancel your mortgage loan. Banks do not do this automatically.

On selling property in Spain, you need to cancel a mortgage loan. No buyer will acquire a property with an existing mortgage against it. A buyer cannot get a new mortgage on the property if there is already one showing up in the title, that is why it must be cancelled.

In a context of high interest rates, most financial advisors will recommend you to cancel them, avoiding hefty monthly repayments which in fact negate the tax benefit sought on the mid to long run.

Bottom line, whatever the reason for cancelling a mortgage loan, you need to hire a lawyer.

Larrain Nesbitt Abogados offers a competitively-priced conveyance service: Discharging a mortgage loan.

At Larrain Nesbitt Abogados (LNA) we have over 20 years’ experience assisting clients buying, selling, or renting properties. We can also offer you a competitively priced accounting service to file your landlord taxes every tax quarter nationwide. We are also specialized in taxation, 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.

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

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

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Taxation on gifting property in Spain

Raymundo Larraín Nesbitt, July, 4. 2023

Lawyer Raymundo Larraín outlines the procedure to gift property (and money) in Spain attracting little to no tax.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of July 2023

Introduction

The continued (vertical) hike in interest rates pursued relentlessly by the ECB (basically to mend its own errors on printing money to no end during the Covid pandemic, which generated a huge inflation bubble) has continued to erode people’s income. In plain English, we are all poorer thanks to the errors of central banks. The good news is that no one in these central banks will be held accountable for their gross incompetence (not even a slap on their wrist), yay! The bad news is that all of us punters get to pay for central banker’s mistakes – as in literally. Nay!

The bottom line is that we are all now collectively poorer as a result of their gross negligence, and as a result many families are struggling to make ends meet as they are out-of-pocket with the rising cost of loans and life in general (inflation). This translates to loving parents lending a helping hand to their offspring, so they can get their paws on the first rung of the property ladder.

Gifting property

In today’s article, we outline a method so that parents – or other family members – support their children (or loved ones) financially so they can, for example, buy their first property. But it is also extensive to gifting properties between spouses, other family members, etc.

My professional experience is that most foreigners are blissfully unaware of the legal procedure involved on gifting property (or money) in Spain to their loved ones saving huge amounts in tax in the process.

Gifting property arises when:

Joint owners (i.e. spouses) decide to re-arrange property holdings.
When parents gift their property, or money, to their children.
When property owners gift their property to other family members, or friends.

Gifting property (or money) has indeed become very popular in Spain, as several regions have approved new tax laws that suppress inheritance and gift tax (Andalucia, Madrid, Galicia, etc). People are jumping at the chance of paying little to no tax in case these tax laws are changed again in the future when a new government takes power …

Taxes paid by the giftor:

Taxes paid by the giftee:

Gift tax (in several regions in Spain this is almost zero)

Additional expenses:

Lawyer’s fees
Notary fees
Land registry fees

Gift procedure

A lawyer needs to be retained from the outset to organize & supervise the gift deed which will be witnessed by a Spanish notary. This requires planning ahead carefully to mitigate your tax bill. If you fail to plan, you plan to fail.

If the legal procedure is not followed correctly (i.e. you do not bother to instruct a lawyer and attempt do it on your own), you will likely not qualify for the lenient tax breaks available and be slammed with a huge tax bill.

Please note we are only giving in this article a (very) basic outline on how the procedure works, the devil is in the details.

Dissolution of joint property ownership (DJPO)

If existing joint owners wish to re-arrange their property holdings, they can opt instead for a DJPO, which reduces taxes by as much as 86%, or more! More on this in our in-depth article: Dissolution of a joint property ownership.

A DJPO applies when:

1.- In divorce or separation proceedings. Couples owning property jointly may decide to split up. Taking for granted they own a property in equal shares, one of them decides to sell their 50% to his ex-partner. The ex-partner will pay him/her his quota.

2.- Re-arranging inheritances. Beneficiaries of an inheritance transfer their quota on a property to a fellow heir. E.g. Sisters who inherit property transfer a share between them.

3.- Re-arranging property holdings between family and friends. Stakeholders such as family, friends, or investors co-owning a property may decide to re-arrange their holdings.

Conclusion

If you care for your loved one’s well-being, and want to help them out in life, all the while paying little to no tax, you may wish to consider this option I explain above.

At LNA we will gladly assist you to re-arrange your property ownership by way of gifting it. Just give us a call, and one of our friendly staff will speak to you.

LNA offers this service: Gifting property & money

“If you fail to plan, you plan to fail.” – Benjamin Franklin

Benjamin Franklin (1706 – 1790). Founding Father of the United States. Exceptionally gifted statesman, scientist, inventor, diplomat, writer, printer, postmaster, and political theorist. He campaigned from early on for colonial unity, initially as an author and spokesman in London for several colonies. He was tasked to raise funds in Europe for the War of Independence. Malaga’s cathedral only has one tower (known as ‘La Manquita’), as the funds were gifted to 13 struggling colonies in their War for Independence against a mighty overseas empire. He was one of the drafters and signers of the Declaration of Independence of the 4^th July 1776. Appointed as the first United States ambassador to France, he exemplified the ingenuity and prowess of a young emerging American nation.

Benjamin was a politician in his spare time; nobody’s perfect.

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

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Spanish Golden Visa: 10 reasons to apply

Raymundo Larraín Nesbitt, June, 13. 2023

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

You can review here our client’s testimonials.

Article copyrighted © 2023. Plagiarism will be criminally prosecuted

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of June 2023

Golden Visas do not automatically make you tax resident in Spain upon renewal, unlike every other visa in Spain. This is a unique tax 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 (legally) override the 90/180-day that limits stay in Spain (and by extension in the Schengen Area/EU). This visa allows you unfettered access to Spain. You can enter and leave the country when and as you please, even overriding Covid flight bans, as you will hold a select residency permit that (very) few people hold.
Clear rules. Initially granted for 3 years, then renewable every 5 years.
No minimum stay is required. You can spend as little as only one day in Spain, or the full year-round, at your choice.
Fast-tracked. Golden visa applications are greatly expedited by rapport to standard visa applications. Golden visas are granted in only 3 weeks.
Streamlined. Golden Visa applications are (greatly) streamlined, removing all the unnecessary admin red tape normally associated to standard visa applications, making applicant’s lives easier.
The whole family is included as dependents, even ascendants (such as grandparents).*
You can work in Spain (optional).
Leads to permanent residency (optional).
Leads to Spanish citizenship (optional).

*(subject to criteria)

Conclusion

The European Commission does not like golden visas.

The Spanish government doesn’t like golden visas either (although it greatly benefits from them).

Several countries in Europe don’t like them either and have already scrapped them in a trend that is growing and gathering pace throughout all the Union (Ireland, Portugal, etc).

On the back of this burgeoning trend, several political parties have piled pressure on the government to suppress them altogether registering proposals at congress (Mas Pais, Podemos, etc). The Spanish government jumped on the bandwagon last month, and made public it will either scrap golden visas, or raise the cap to €1,000,000. It seems they are leaning towards the latter (raising the cap, meaning doubling the required minimum investment).

So, what does all this mean for applicants? It means the window of opportunity to attain a golden visa in Spain, by way of investing €500,000 in real estate, is waning by the day. Over the next months, the Spanish government will approve to raise the cap, as reported by El Pais, in effect doubling the minimum investment to €1mn. Anyone who cannot afford to spend a minimum of one million euros in real estate, will be left out in the cold.

We strongly advise all non-EUs – who are considering filing for a golden visa in Spain – to do so immediately, before the window of opportunity closes. Obviously, if you are a multi-millionaire, this change does not concern you. But there is also the distinct possibility of the government caving into the political pressure and shutting down golden visas for good, in line with other fellow EU countries.

In any event, all would-be golden visa applicants, affluent or not, are strongly advised to act sooner rather than regret it later.

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.

Your family’s success is only one call away: (+34) 952 19 22 88

Golden Visa (investor visa)

Larrain Nesbitt Abogados has a 100% track record of attaining Spanish residency.

“I’m self-made. I always wanted to make myself a better person, because I was not educated. But that was my dream – to have class.” – Tina Turner

Anna Mae Bullock (1939 – 2023). Was an-all American singer (later on in life she acquired Swiss residency & citizenship through investment). Born in a humble family, in the deep South, she picked cotton as a kid with her father in a farm. Family members soon noticed her natural talent for singing and she went on to join the local church’s choir. Without receiving a formal education, she would go on to work in several jobs, such as joining a household’s domestic service, etc until finally pursuing her dream, a singing career on meeting the man who would eventually become her husband, Ike Turner. He taught her all the basics. She became the featured vocalist of his band, and rose to prominence as the lead singer of the Ike & Tina Turner duo. Because of her husband’s constant abuse (fuelled by the unrestrained consumption of cocaine & alcohol), she bravely decided to split up and launch a successful career as a solo performer, at age 37, garnering worldwide recognition. And the rest, as they say, is history. Tina Turner will be fondly remembered as the Queen of Rock ‘n’ Roll.

She is one of the few singers who dedicated a song to us lawyers: “Typical male.” No doubt, the lady had class.

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 Service (Investor Visa)
Non-Lucrative Visa (Pensioner’s Visa)
Lucrative Visa (Business Visa)
EU-Family Regroupment (Marriage Visa)
Digital nomad visa (Tax-free visa)
Spanish Residency permit for EU nationals

Golden Visa related articles

Investor Guide to Spain’s Golden Visa Law – 8th November 2013
????????????? – 8^th July 2015
Golden Visa Spain – 8th June 2017
Golden Visa Spain – 8/8/18
Golden Visa Spain: 10 frequently asked questions – 8th October 2019
Golden Visa for British – 21^st January 2021
Golden Visa: 8 Reasons to apply – 21^st March 2022
Spanish Golden Visa: 10 reasons to apply – 21st March 2022

Article also published at Larrain Nesbitt Abogados: Spanish Golden Visa: 10 reasons to apply

Marbella-based Larraín Nesbitt Abogados (LNA) has over 20 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speakinglawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

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10 reasons to invest in Spanish real estate

Raymundo Larraín Nesbitt, May, 2. 2023

Lawyer Raymundo Larrain gives ten reasons to invest in Spanish real estate.

You can review here our client’s testimonials.

Article copyrighted © 2023. Plagiarism will be criminally prosecuted

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of May 2023

10 reasons to invest in Spanish real estate

Store of value. In times of political and economic instability (war, stock market crash, global pandemic, bank runs, high inflation, etc), gold and real estate are king as traditionally they act as safe havens where savers shelter their money to weather the storm.
Staves off inflation. At a time when central banks have (irresponsibly) printed money to no end, vastly increasing the monetary mass which in turn has led to inflation spiralling out of control worldwide, real estate offers by contrast a placid solace to deposit your life savings. Savings sitting idly at a bank are devoured by rising inflation, losing value every year.
Tangible asset. Real estate is a tangible asset that you can touch, feel, and see any time of the day. This acts in sharp contrast to ethereal investments, such as cryptocurrencies and other intangible assets, which are really never under your control, hard to understand, and even harder to monitor.
Security. The laws in Spain offer property owners a solid legal framework which protects and upholds their rights as behoves a modern European democracy. In several regions of Spain (i.e. Madrid, Andalusia, Galicia, etc) inheritance tax and wealth tax have been suppressed. These regions have also slashed property transfer tax and stamp duty on buying property.
Capital growth. It’s no secret that real estate always appreciates in the long run. Unlike other volatile investments (such as stocks, bonds, and mutual funds) which undergo huge fluctuations, real estate offers a constant and gradual increase of value over time. Property prices in Spain have risen by 16% over the last five years (and even by two digits year-on-year in some sought-after areas, such as large cities (i.e. Madrid, over 40%) and coastal areas (i.e. Marbella, 40%). You really don’t need to invest in Bitcoin to strike it rich, just stick to the basics.
Generates passive income. Rental yields in Spain have soared by two digits over the span of three years. Spain is the world’s second tourist destination creating a huge pent-up demand for holiday accommodation. Investing in property, and collecting the rent, is indeed a (very) profitable business in Spain. For long-term rentals, you can expect a net yield of 5% per annum; for holiday accommodations it’s over 10%. They don’t call them ‘landed’ gentry for nothing!
Equity leverage. Investing in real estate allows you to leverage your equity over time. In plain English, this means that if you finance a property with an investment loan, the amount of money you borrow will eventually be less than the value of the property once it appreciates over time. After some years, you can refinance and use some of the additional equity to invest further in other properties. This strategy is ideal for investors who want to play it safe and adopt a long-term investment strategy, building up a healthy property portfolio over time.
Source of cash flow. Rented properties generate a constant revenue stream for their owners. Landlords may use the collected rent to pay overheads and other property maintenance expenses - including monthly mortgage repayments! In a nutshell, a well-chosen property pays for itself!
Generous tax deductions. Unbeknownst to most people, Spain offers lenient tax allowances which in effect reduce a landlord’s tax bill by 70%, or more (applies only to EU residents). You can offset all property maintenance expenses, including your lawyer’s fees (to calculate the rental tax) and mortgage interests! Once deducted, property offers great returns on investment.
Strong dollar vs. weak euro. This advantage is unique to those investors holding US Dollars. Due to the lacklustre and reactive performance of the ECB, the US Dollar has strongly appreciated against the Euro over the last months creating unique buying opportunities. In plain English, never before has Spanish property been cheaper and more appealing to savvy US Dollar holders. Not to mention that buying property opens the door to a coveted Golden Visa, which allows unfettered access to the Schengen Area (27 countries).

When you combine soaring rental yields and capital growth, you reach the conclusion that Spanish real estate is delivering a safe two-digit return year on year.

Be smart, don’t work for your money, make your money work for you.

If you take care of your money, it will take care of you.

Invest in real estate.

“One generation plants the trees in whose shade the next generation rests.” – Ancient Chinese proverb.

LNA offers the following tax & legal services:

“Los políticos no son necesarios, pero ellos nos convencen de que los necesitamos para resolver los problemas que, sin ellos, no existirían.”– Sanchez Dragó

Loosely translated as: “We don’t need politicians, but they go to great lengths to convince us we need them to solve all the problems that, without them, wouldn’t exist.”

Fernando Sánchez Dragó (1936 –2023). Was a Spanish writer and journalist. In his idealistic youth, he was an active member of Spain's Communist party; he was imprisoned a few times for his fierce opposition against Franco’s dictatorship. Later on in life, he would gradually gravitate towards a conservative line of thinking. He was a prolific writer who published over 40 books, and wrote thousands of articles. During his lifetime he received numerous literary accolades. A polemic figure, whose private life would fill multiple libraries, that never left anyone indifferent. It is challenging to label such a unique man, greater-than-life.

Sanchez Dragó died last April aged 87. He leaves behind a vast fortune, mainly in real estate.

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Eight pointers on buying property in Spain

Raymundo Larraín Nesbitt, April, 3. 2023

Lawyer Raymundo Larrain delivers useful pointers on buying property in Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
1^st of April 2023

Introduction

You would never buy a property in your home country without instructing a solicitor or conveyancer, and yet a surprising number of people choose not to instruct a lawyer or legal representative when buying abroad. If anything, it is even more important to obtain good legal advice when buying overseas as it is highly likely that you will be unfamiliar with many of the key processes.

While it is possible to buy a property in some overseas jurisdictions, including Spain, without having to appoint a lawyer, it would be very unwise to do so. Buying a house is one of the biggest investments most people make in their lifetime. So why take the risk by not obtaining proper legal advice?

Eight pointers on buying property in Spain

Tenants. Unbeknownst to a buyer, on buying property, there could be tenants inside. The new owner takes on the legal position of landlord and must respect - by law - the duration and terms of any pre-existing rental agreement. You should know some rental agreements in Spain lock you in for ten years… and you cannot update the rental. Your lawyer can safeguard your interests in this event.
Utility invoices (water, electricity, etc). Outstanding utility invoices are a nuisance as utility companies may shut down the supplies. Reconnecting the electric supply, for example, can set you back 500 euros and you need to wait at least 4 weeks to top it off!
Community of Owners. Properties within a community can be in arrears. The new owner takes on all the debts dating back five years, which can be fairly substantial. Likewise, a new owner also becomes liable for all the pending community improvements (known in Spanish as derramas). In old buildings, that require much work and maintenance, these hidden debts are in the thousands i.e. replacing the lifts.
Local taxes. The property can be in arrears with taxes levied by the local town hall. In a worst-case scenario, the property can be impounded and sold off in a public auction to recoup the debt. The new owner is held liable for all taxes going back four years.
Report on Title. It is important to acquire a clean title. Mortgages, embargoes, liens, etc can weigh down on a property’s value. Nobody wants to buy a property with a charge against it, as it can be seized by creditors.
Community of owners that ban holiday rentals. A new trend is emerging in community of owners, whereby they agree to ban holiday rentals outright. There is no point investing in a fancy beach pad if you are not allowed to rent it out. It goes without saying that a property which cannot be leased legally has a substantially reduced market value as opposed to other ones which can.
Licence of First Occupation (LFO). Strictly speaking, a LFO should only be requested on buying off-plan property. However, nowadays it is being required even for resales. Buying a property without a LFO brings its owner serious problems that we collate in our article: Licence of First Occupation. For example, a property which lacks a LFO cannot get a mortgage loan against it. Meaning any potential buyer of said property must be a cash-buyer (it goes without saying they are few), which would greatly reduce the pool of prospective buyers, pushing back years the sales date.
Tourist licence. Most regions in Spain have passed stringent laws if you want to offer your property as a holiday accommodation. By law, it is mandatory you attain a tourist licence to offer your property in holiday platforms, estate agencies or private websites. Failure to comply leads to eye-watering fines. There is also the point that some regions in Spain (i.e. Balearics) go to great lengths to restrict and ban holiday rentals. Meaning not all properties can attain a tourist licence as some are located within areas which are zoned out for holiday rentals; that is banned outright by local authorities. It goes without saying that a property which cannot be leased legally has a substantially reduced market value as opposed to other similar ones which can.

In conclusion

I have only listed the basic eight, but you should be aware there are far more points to look out for (in the dozens). A seasoned conveyance lawyer will quickly pick on all the flaws listed above and advice his client on running a due diligence on the title. For reference, we offer a free in-depth buyer’s guide to buy property in Spain: Lawyer guide to buying property in Spain.

On buying property in Spain, you should be mindful the title is clean. It is fairly common the previous owner has fallen in arrears (maybe that’s exactly why they are selling!). In Spain, the golden rule is that debts follow the property, not the debtor. Meaning, when a buyer takes over a property, they also take on all existing debts from the previous owner! And this is not limited only to owed money, if a buyer, for example, acquires an illegally built rustic property on green belt land, the may be held criminally liable for the previous owner’s planning infractions. Planning infractions follow the property; whoever becomes the new owner, ‘inherits’ any outstanding planning problems and will be held liable for them.

Whilst it is true there is no legal obligation to hire a lawyer on buying property in Spain, it would be very foolish (and costly) not to do so. This is why we advise you to hire a reputed and independent conveyance law firm to carry out a thorough due diligence on the property ensuring everything is above board.

We assist clients all over Spain. Our friendly staff will be more than happy to have a chat with you.

LNA offers the following related tax & legal services:

“Eyes up Guardian.” – Lance Reddick

Lance Solomon Reddick (1962 – 2023). Was an American actor and musician. He was best known for playing Cedric Daniels in The Wire (2002–2008), Phillip Broyles in Fringe (2008–2013), and Chief Irvin Irving in Bosch (2014–2020). In film, he was best known for starring as Charon in the John Wick franchise (2014–2023) and David Gentry in Angel Has Fallen (2019). He was also known for portraying Detective Johnny Basil on Oz (1997–2003), Matthew Abaddon in Lost (2004–2010), and Albert Wesker in the Netflix series Resident Evil (2022). He provided the voice and likeness for video game characters Martin Hatch in Quantum Break, Sylens in Horizon Zero Dawn and Horizon Forbidden West, and Commander Zavala in the much-acclaimed Destiny franchise. He will be sorely missed.

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Dealing with someone’s affairs in Spain when they die

Raymundo Larraín Nesbitt, March, 6. 2023

Lawyer Raymundo Larrain briefly explains the steps that need to be taken to prepare an inheritance procedure in Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8^th of March 2023

It is strongly recommended that you make a Spanish will when you own property in Spain. The reason is because it will greatly assist your appointed beneficiaries saving them time, money, and aggravation at a time of bereavement. The full advantages are explained in our article: 7 Advantages of Making a Spanish will – 8^th May 2018. Spanish wills are usually done in under one hour at a Spanish notary.

It’s important to note you only have 6 months to file inheritance tax in Spain, as from the time of death, without attracting any penalties. After the tax deadline, penalties and delay interests are rolled on top and can be up to 20% of the estate. Your lawyer can request a one-time extension to avoid this.

When a person dies in Spain, you must appoint a Spanish qualified lawyer to instigate and oversee the probate procedure. Depending on whether there is a Spanish will already made, the procedure can take anywhere between two months to over a year. That is why we stress again that making a Spanish will is highly advantageous as it cuts through all the red tape saving considerable time and money (in the thousands).

Property in Spain cannot be sold to anyone until the probate procedure has concluded and the taxes have been filed. Only then can the property be re-registered under the beneficiary’s name who becomes the new legal owner and is now free to sell the property on.

Please note that in several regions of Spain, such as Andalusia, inheritance tax has been suppressed, so 99.99% of people don’t pay any tax on inheriting (but the tax still needs to be filed regardless).

If a loved one passes away in Spain, please contact our law firm so we can assist you. We have over 20 years’ experience assisting in probate matters all over Spain. We are here to help.

LNA offers the following related tax & legal services:

Further reading:

New EU Regulation to be Passed on Succession and Wills –18th May 2010
EU Pulls the Stops and Vows to Put and End to Inheritance Taxation Discrimination on Non-Resident Beneficiaries Inheriting in Spain – 20th May 2010
Non-Residents: Six Advantages of Making a Will in Spain – 8th August 2012
Spanish Wills and Probate Law in Light of European Regulation 650/2012 – 8th January 2015
Changes to Spain’s Inheritance and Gift Tax Law – 21st February 2015
Dispelling Spanish Inheritance Tax Myths – 8th August 2015
Spanish Inheritance Tax for Non-Residents (Part I) – 21st February 2016
Spanish Inheritance Tax for Non-Residents (Part II) – 8th March 2016

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Tax advantages of Spain’s Digital Nomad Visa

Raymundo Larraín Nesbitt, February, 6. 2023

Lawyer Raymond Nesbitt explains the unique tax advantages of Spain’s Digital Nomad Visa

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
21^st of February 2023

Introduction

The new Digital Nomad Visa (DNV) offers unique tax advantages that no other Spanish visa can match. Its main outlier - and what distinguishes it from other available visas - is precisely the wide array of tax benefits it offers. The DNV has been purposely devised so successful applicants pay few taxes; the purpose is to incentivize these overachievers to move and work (remotely) in Spain.

The DNV is modelled after Beckham’s Law, enacted in 2015, and which applies to EU residents which in turn was inspired by the UK’s wildly popular Non-Domiciled taxpayer scheme.

It’s a legal fiction whereby a non-EU taxpayer is treated as a non-fiscal resident in Spain, but for administrative purposes, they are regarded as fully resident in Spain. The tax significance of this nuance simply cannot be understated enough and opens the door to the slew of tax benefits I collate below.

Precisely because of its huge tax advantages, the law time-gates it to a maximum of only five years.

Needless to say, a DNV makes you tax resident in Spain (that’s precisely the whole point!).

Because of its nature (to attract talented individuals), and similar to Golden Visas, all applications are fast-tracked. Meaning that in under one month you know if you’ve been accepted.

In a nutshell, the DNV is all about paying little to no tax.

DNV tax benefits

All income & assets held abroad go untaxed. In other words, any source of worldwide income is tax-exempt (just like with the popular UKs non-dom tax scheme).
DNV holders only pay tax strictly on the income they derive working remotely in Spain for a foreign employer. They will pay a flat tax rate of 24% on the first €600,000 of gross annual earnings over a five-year period.
They are not required to file a 720 tax return (unlike Spanish tax residents)
They are not required to file Wealth Tax (unlike Spanish tax residents)
You can request to defer the payment of tax on the first and second year without penalties or delay interests being rolled on top (as is standard)
For the purposes of other tax agencies, you are considered tax resident in Spain.

LNA has a 100% track record attaining Spanish residency

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

At Larrain Nesbitt Abogados, we have assisted hundreds of non-EU nationals, and their families, to successfully attain a Spanish residency permit since 2013.

Interested? Come and speak to Larraín Nesbitt Abogados’ friendly staff who will be pleased to guide you through the different residency options, choosing the one that appeals to you most.

Your family’s success is only one call away: (+34) 952 19 22 88.

Residency services available from LNA

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How to spend over 90 consecutive days in Spain - General visa overview (updated)

Raymundo Larraín Nesbitt, January, 9. 2023

Solicitor Raymond Nesbitt supplies us with a general overview on the different types of visa permits available and how to spend more than 90 consecutive days in Spain.

You can review here our client’s testimonials.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
1^st of January 2023

Introduction

With the advent of the new and upcoming popular Digital Nomad Visa (which has now been approved), it was time to update our visa article. The goal of this article is to explain how you can (legally) spend over 90 consecutive days in Spain.

If you are a non-EU national, you can legally spend up to a maximum of 90 consecutive days in Spain, or within the Schengen Area, within every rolling six-month period. This is popularly known as the 90/180-day rule.

Non-EUs who wish to spend longer periods of time in Spain, or even work, must apply for a visa. Please note that not all visas allow you the right to work in Spain, it should not be taken for granted.

In this article, we supply a general overview of all five visas available through our company. We won’t cover other options, such as student visas, which are applied for directly by academic institutions.

The five listed visas below allow its successful applicants, and dependants, to remain in Spain for more than 90 consecutive days within a calendar year; moreover, you may stay all year round if it pleases you. As an additional advantage, visa holders will have unfettered access to the Schengen Area (all 26 countries). Basically, you will be treated on equal footing to a Spanish national on entering & exiting the country without all the border & customs hassle that cause so much aggravation.

Regarding taxation, none of them automatically make you tax resident in Spain on attainment. However, if you spend over 183 days/year in Spain you will be deemed tax resident. On applying for a visa renewal, you will have to provide proof you are living in Spain long term, which triggers tax residency.

All visas collated below extend their benefits to the main applicant’s family i.e. spouse and underaged children.

All five listed-below visas have in common the following staple requirements:

Non-EU national.
Hire private health insurance in Spain.
Clean criminal record (previous 5 years).
Be self-supporting (you will not claim benefits).
Not be already in Spain illegally at the time of making a visa application.

1. Digital Nomad Visa (DNV)

The DNV belongs to a new generation of visas that specifically target certain collectives that are of interest to the government. To that end, it rolls out the red rug to attract talented teleworkers offering them in exchange unique and enticing advantages. Hands down the outlying advantage is the privileged taxation it confers upon its holders (basically Beckham's law applies). No other visa in Spain offers the benefits of paying such low-income tax: a flat tax rate of only 24% on the first €600,000 of gross annual earnings over a five-year period. Your worldwide income & assets are tax-exempt. If you fancy living and teleworking from Spain, and paying few taxes, look no further.

Suitable for:

Freelance workers
Affluent candidates
High-end corporate profiles
Teleworkers in general

Further reading: Spain’s Digital Nomad Visa approved! – 29th December 2022

We offer this competitively priced visa service: Digital Nomad Visa

2. Golden Visa – Investor visa

The investor visa is devised for affluent applicants. It is popularly known as a ‘Golden Visa’. It’s a blue-ribbon visa that basically rolls out the red rug for its privileged holders that neatly cuts through all the red tape. Its purpose is to foster foreign investments in Spain. Whilst there are many different ways to attain a GV, the most popular (and least expensive) is by investing in Spanish real estate. This requires investing €500,000 in property. We should point out that it applies retrospectively; meaning that any UK national (or from any other non-EU country) that bought a property in Spain for over 500k on or after the 28^th of September 2013 may qualify. Unlike the other visas listed below, renewals are not subject to proving you live in Spain all year round. They are based on keeping the investment. This ability to override the 90/180-day rule and not being ‘forced’ to live in Spain make it one-of-a-kind and explains why it is so coveted. GVs allow you to work in Spain should you choose to.

Suitable for:

Affluent property buyers
Investors, developers
High-flyers

Further reading: The Spanish Golden Visa: 8 Reasons to apply – 21^st March 2022

We offer this competitively priced visa service: Golden Visa

3. Marriage visa – EU Family regroupment

It’s intended for families or couples that have been separated, in and out of the EU. It seeks to reunite them in an expedited manner within the EU. So, although this type of visa is popularly dubbed as ‘marriage visa,’ it would be rather more appropriate to refer to it as ‘family visa’, as its scope goes well beyond a married couple. It ought to be understood in broader terms, as in family reunion. As its own name implies, couples must be married (including same-sex partners). This visa allows you to work in Spain.

Suitable for:

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

Further reading: EU-family regrouping (marriage visa)

We offer this competitively priced visa service: EU-family regrouping (Marriage Visa)

4. Business visa – Lucrative Visa

As its own name implies, this permit allows the applicant to work in Spain as you will be self-employed. This residency applies to someone who is looking to set up his own business in Spain. Typically, you will be acting as director or company administrator. Needless to say, one of the key requirements is that you will have enough means to be self-supporting both for yourself and your family for one year. The catch, besides a cast-iron motivation, is that you need to invest in the ballpark of €100,000 in savings to open & run a business.

Suitable for:

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

Further reading: Lucrative residency permit (business visa)

We offer this competitively priced visa service: Lucrative Visa

5. Pensioner visa – Non-Lucrative Visa

As its own name implies, this visa allows the applicant to live, but not to work, in Spain. The applicant will be expected to be self-supporting and will be required to prove he or she has enough savings for at least two years. This visa is ideal for retirees who wish to spend extended periods of time in Spain – without working – enjoying the finer things in life. However, it should be noted that other applicants, who are not of pensioner age, are also welcome to apply. This visa is also a good option for those who want to test the waters and are considering living in Spain long term.

Suitable for:

Pensioners
Would-be buyers, long-term tenants
Bon vivants with a healthy bank balance

Further reading: The Spanish Non-Lucrative Visa Explained

We offer this competitively priced visa service: Non-Lucrative Visa

LNA has a 100% track record attaining Spanish residency

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

At Larrain Nesbitt Abogados, we have assisted hundreds of non-EU nationals to successfully attain a Spanish residency permit since 2013.

Interested? Come and speak to Larraín Nesbitt Abogados’ friendly staff who will be pleased to guide you through the different residency options, choosing the one that appeals to you most. Your family’s success is only one call away: (+34) 952 19 22 88.

Residency services available from LNA

Article originally published at Spanish Property Insight: How to spend over 90 days in Spain – Residency visa overview

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