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Offplan property is appreciating by two digits a year: The main difference between 2008 and 2022

Raymundo Larraín Nesbitt, December, 5. 2022

Marbella-based Larraín Nesbitt Lawyers 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.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
1st of December 2022

As most buyers will have experienced, offplan property in Spain has appreciated by two digits nationwide over the las years. This is good, no? Let’s take a closer look at this and see what’s under the hood. We are going to compare it to 2008 to have a wider perspective of what is really going on.

2008

2008 marked the high point of Spain’s property bubble. Over 750,000 properties were being built a year and property prices were rising by 15 to 20%.

2022

In 2022 offplan property is appreciating on average by 10%, and in coastal areas by 20% a year. 150,000 properties are being built a year.

A closer look

Both figures look almost similar to what is going on in today’s market, yes? Actually, no.

The key difference is that in 2008 properties appreciated greatly driven by high demand. This pushed asking prices forward. I personally witnessed how investors were buying properties by twos and threes. It was simply a crazy speculative market fuelled by ultra-low interest rates.

Whereas in 2022 the increase in offplan prices are driven by high inflation, not by demand. The Covid-19 pandemic, and all its strains, have created serious disruptions in the global supply chain. Aluminium and other construction materials imported from China, and which are required by the offplan industry, are now taking much longer to arrive to Spain and have also greatly appreciated in price. Developers are forced to pass on this cost increase to buyers, which translates into higher asking prices. Meaning developers themselves are having to increase the sale price of their units every year only to break even because of the inflation spike (bubble) in construction materials.

Conclusion

To close, note that in 2022 FIVE times less offplan units are being built than in 2008 (150k vs 750k).

So, clearly the reasons underlying the huge spike in offplan asking prices are due to very different reasons.

At Larrain Nesbitt Abogados we have over 19 years’ experience buying, selling, and renting properties. 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.

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

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.

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Spain’s Taxation on Crypto Currency

Raymundo Larraín Nesbitt, November, 21. 2022

Copyrighted © 2022. Plagiarism will be criminally prosecuted.

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

Unbeknownst to most people, Spain has passed legislation on the matter of taxation on Crypto Currency. Spanish resident taxpayers have a legal obligation to declare their purchase and sell

As any economist worth his salt will tell you, the success behind any profitable portfolio is a healthy diversification: real estate, bonds, commodities, shares, and cryptos. Cryptos have become very popular over the last decade, not only as a means of payment, but also as a store of value as they are widely regarded as the future of trading. This success has prompted the appearance of hundreds of digital currencies, with even central banks taking a jab at it with an aim to control the market’s ebb and flow. Despite their resounding success, they have taken a beating lately, even denting the main front runners. The strongest will no doubt rebound in a new expansion phase.

Spanish tax residents are under a legal obligation to declare them. You should declare the purchase & sale in your IRPF tax return (personal income tax return).

If you hold over €50,000 abroad, you must include it in your annual 720 tax return. Annual variations in value in excess of €20,000 need to be reported.

As a general rule, if you hold over 2mn euros in cryptos (and/or other assets), you also need to include them in your Wealth Tax return.

Inheriting cryptos is also taxable. Because of devolved competencies on inheritance matters, this will change from one region to the next.

Capital gains (on selling) is taxed following a progressive sliding scale:

From €0 to €6,000 – 19%.
From €6,001 to €50.000 – 21%.
From €50.001 to €200,000 – 23%
Over €200,001 – 26%

Although cryptos have suffered greatly as of late, we view this as a healthy market correction that will purge all the exuberant excess, weeding out thousands of cryptos from the market on its wake, leaving only the survival of the fittest.

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Barcelona, the beautiful

Raymundo Larraín Nesbitt, November, 11. 2022

Lawyer Raymundo Larrain explains what he thinks makes Barcelona so special and why you should buy property there.

Sunrise from Park Guell

By Raymundo Larrain

8^th of November 2022

Right off the bat, I must admit I have a soft spot for Barcelona, so yes, this article is going to be biased towards it, soz.

Introduction

Barcelona was founded in the 3^rd century B.C. by Carthaginians. It was named ‘Barcino’, and – if we are to go by legend – it is named after one of the most prominent Carthaginian families (the Barcas) which included no other than Hannibal himself; one of the finest commanders of all time.

Barcelona is the capital city of the Spanish region of Catalonia, one of the richest, most powerful, and industrious in all of Spain. It is undoubtedly one of the crown jewels of the Mediterranean Sea, and is arguably the most beautiful city in all of Spain; well, at least to me. The fact that it is a coastal city is simply the cherry on top. Its close proximity to European influences and avant-garde trends, give it a luster of a cosmopolitan city.

The Eye-Catching Architecture in October 2022 crowned Barcelona as the third most beautiful city on the planet, after Rome and Venice. Using an advanced computer program to measure the dimensions and proportions of buildings, they compared them to the golden ratio (1:1.618). But frankly, you don’t need any machine to appreciate its beauty, you only need to be human.

If you are single, this is the city where you need to mingle. I have fond memories of visiting it with the lads when I was an undergrad. Mmm, to be young again!

For reasons of space constraint – and also because my editor would likely strangle me – I need to keep this article short; but you should know I could ramble all day about Barcelona and its countless delights. This is an abridged article, do not expect an insightful guide chock-full of insider tips, because it is not. I simply gloss over the city’s main highlights and leave it to the reader to fill in the gaps.

Barcelona’s Districts

The Old Town

The Old Town is the core of the city and includes the Gothic Quarter, El Raval, La Barceloneta, and El Born. You will find antique shops, centuries-old cafes that were frequented by artists, poets, laureate writers and bon vivants that discussed on arts, and politics; fancy restaurants sprawl amid its winding lanes surrounded by a cosmopolitan crowd of smiling tourists, students, and immigrants displaying their brightly coloured wares. A scent of freshly made food gently drifts through the air tethering the unsuspecting visitor.

Eixample

This is a large district with modernist avenues and buildings which includes such iconic places as the Passeig de Gracia, and Gaudi’s masterpiece ‘La Sagrada Familia’. It attracts swathes of tourists.

Montjuic

Overlooking the commercial port, there is a hill rising above the city, the Montjuic mountain. It is a place of natural beauty and cultural value. Beautiful views over the city are guaranteed at dawn and dusk.

Gracia

Is home to Gaudi’s Park Guell, another landmark of this stunning city, which illustrates this article. It’s a garden park that beckons you to wander it and get lost in its enticing beauty.

Must-see places

La Sagrada Familia

This is widely regarded as Gaudi’s masterpiece, it’s an unfinished cathedral unlike any you have ever laid your eyes on. It seems taken straight out of an alien dream that beckons you forward, ensnaring your very soul.

Port Olimpic

This was built to accommodate Spain’s 1992 Olympics, hosted by Barcelona, which brought the nation together, and constitutes one of the most beautiful chapters in Spain’s young democracy; a wondrous time when anything seemed achievable, and which rallied all of Spain behind one banner, as one, in happier times.

During the daytime, you can take a walk and view the yachts with the family, at dusk you can sit at one of the many cafes and take in the beauty of a golden dusk against a dashing blue sea. But only when the sun sets, it is truly when the place comes into its own – at nighttime. The port is brimmed with industrial hubs that have been reconditioned to harbour hedonistic nightclubs that cater to discerning party owls. It’s another place where beautiful people, and those young at heart, visit to quench their undying thirst for living life with passion.

Las Ramblas

Is a tree-lined avenue in the old town that acts as a boundary between the Gothic Quarter and El Raval. This is a place where carefree undergrads visit the numerous watering holes that dot it, pulling the local (beautiful) girls, or so I’m told, ahem. I recall El Bosc des Les Fades (Fairy Forest) as a great place to stop for a pint or two, it is beautifully decorated with candles and inside waterfalls that give it an ethereal mystique, almost dream-like. Las Ramblas bustles with life and diversity, but you should pay special attention to pickpockets whose nimble fingers have ruined many a day of wide-eyed tourists.

Barcelona’s Architecture

To speak of Barcelona’s architecture, is to speak of Gaudi as they are both inextricably linked. Frankly, I don’t even know where to begin, I’m so overwhelmed. You are going to have to forgive me on this one, because there are simply far too many places to list, and I only have so much space (that and also because I cherish my neck!).

To name my personal top tier:

La Sagrada Familia: as mentioned, an iconic cathedral built at the heart of Barcelona, unique in the whole world, otherworldly, almost alien-like. I’m pretty sure Ridley Scott took pointers for his famous Alien movie. I run out of words to describe its mesmerizing beauty.
Park Güell: another of Gaudi’s iconic marvels. It’s a park that draws inspiration from Mother Nature, now converted into a municipal garden.
Casa Batlló: Gaudi was commissioned to build this building. Its façade and balconies resemble Venice’s carnaval masques. Again, another prime example of Modernist art.
Casa Amatller: another beautiful example of modernist fantasy with reliefs of dragons and knights commissioned by a generous philanthropist after which it was aptly named.
La Pedrera: a Unesco-listed masterpiece. A beautiful building with endless balconies commissioned by another affluent businessman after which it was initially named (Casa Milà), but its nick (meaning the quarry, after its uneven grey stone façade) catched on and is now known by it.
Palau de la Música Catalana: again, another Unesco-listed building. I would finish quicker if I simply listed the ones which are not Unesco-listed!
Basílica de Santa Maria del Mar. I’ll finish the list as I started it, by naming another religious building, a Catalan Gothic church named Our Lady of The Sea that dates from the XIV century.

Conclusion

Truly, what can one add to perfection?

If you want your heart stolen visit Barcelona, or better yet, buy a property there. Barcelona is one of those bewitching cities which beauty and lovely people haunt you, leaving an indelible mark upon your soul. It truly is a unique European city that one should visit during his lifetime.

“Nothing is art if it does not come from nature.” – Antoni Gaudi

Antoni Gaudí i Cornet (1852 – 1926). Was a Spanish architect known as the greatest exponent of Catalan Modernism. Gaudí’s works are mostly located in Barcelona, and include La Sagrada Familia, Park Güell, and Casa Batlló amongst many others. Gaudí’s work was influenced by his passions in life: architecture, nature, and religion. Gaudi is universally acclaimed as one of the greatest modern architects whose magic art 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. Ní neart go cur le chéile. VOV.

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Spain to increase Plusvalia tax on selling property as of 2023

Raymundo Larraín Nesbitt, November, 2. 2022

Copyrighted © 2022. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
1st of November 2022

On selling property in Spain, you are liable for two taxes (more on this in our taxation article: Taxes on Selling Spanish Property – 8th December 2014):

Capital Gains Tax (CGT)
Plusvalia tax.

The first tax is national and set by the government.

The second one, is a devolved competency to municipalities (read town halls). They are free to set the rate within a sliding scale supplied by the government. The government will be adjusting the coefficients (read moving the tax goal posts) as from the 1^st of January 2023 in the new budget law. In plain English, town halls will have free rein to increase by as much as 50% Plusvalia tax as of next year.

If you are selling property in Spain, you should seriously factor this in on negotiating a sales price. Unlike CGT, there is no escape from paying Plusvalia tax. The reason is that buyers practice a retention on all non-resident sellers, so no matter what the tax is always paid to the town hall.

The importance of this cannot be understated if you are a seller. The smart thing would be to sell now, during 2022, even accepting a small discount on the sales price, as effectively you are going to pay this tax increase anyway on selling it as from next year onwards.

So next time you are negotiating with a buyer the asking price, keep my tip in mind. You may as well knock off a few thousand euros in the sales price to secure a sale now, during 2022, and save yourselves paying thousands more in 2023, and beyond!

You’re welcome.

We offer this conveyance service: Conveyancing in Spain – Selling

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Happy Halloween!

Raymundo Larraín Nesbitt, October, 31. 2022

Anál nathrach, orth' bháis's bethad, do chél dénmha

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Brexit is destabilising the United Kingdom

Raymundo Larraín Nesbitt, October, 21. 2022

By Raymond Nesbitt
21^st of October 2022

The most traumatic experience any individual can endure during his lifetime are the three D’s: death, debt, and divorce.

Brexit, in effect, was an acrimonious divorce from the EU. The UK’s decoupling of the Union caused severe ripples which have grown in size and intensity overtime threatening the core fabric of the United Kingdom: its stability and unity.

The UK has had three Prime Ministers in under a year, in what constitutes an unprecedented time of political turmoil and chaos. More and more the UK resembles Italy - in all the bad.

The economic and political decoupling of the EU was the most grievous mistake of a generation – of the century. Because after Brexit, the fact is that the UK remains very much within Europe, it hasn’t moved anywhere. The Union is - and will remain - the UK’s largest trading partner with a European single market of over 450 million consumers. It is estimated the UK lost over 4% of its GDP post-Brexit (some 40 billion pounds), personally I think the truth is closer to double that figure the Office for National Statistics quotes. And this figure does not take into account the billions of pounds spent by SMEs and large companies duplicating a bureacracy and registration system already in place with the EU. It also does not take into account the increase in taxes paid, for example, by my clients (from 19% to 24% tax rate) and no tax relief. This means all this money (thousands of pounds per taxpayer) that would have otherwise stayed in the UK ends up in Spain, or elsewhere, making the UK poorer.

And what did the UK get in exchange of losing well over 4%of its GDP to its major trading partners only 20 miles away? It got a trade deal with Australia, half a world away, that adds a whopping 0.08% GDP to the UK's coffers. With New Zealand it was paltry 0.03% GDP. I'm no economist, but that doesn't seem like a brilliant move to me.

In the private sector, where I've worked for all my life, the persons responsible for such a giant mistake would be held accountable and would have very serious consequences for their job prospects. There should be a national reckoning over this and the handful of Tory politicians that grossly misled the whole country should be held accountable for it. Remember that red bus driven by Bojo with the 350 million pounds a week (sic) that had to be transferred by the NHS to the EU? Where is all that money now? Surely the NHS staff must be highly paid, right? False. The harsh truth is that they are underpaid, overworked, and under a lot of stress. More than 40,000 nurses have left the NHS (over 11% of its workforce) during 2022 alone. It was all a pack of lies.

It was folly, and a huge historic mistake, to think the UK could go about on its own in this small intertwined world we all live in. Abandoning a single market of 450mn consumers that is literally sitting at is doorstep and its customs union, to which it had unfettered access of goods & services, in the hot pursuit of self-deluded dreams of grandeur, manifest destiny and self-sufficiency is bonkers, period. Some (or many) Tory politicians need a reality check. They are totally dettached from reality and how the economy works, at least for the average joe. The UK needs the Union as much as the Union needs the UK.

Almost two years on from Brexit, we ought to think hard who has benefitted from it. As I pointed out in my articles and blog posts at the time, it most certainly wasn’t going to be the average person nor the country, that’s for sure. I'm surprised UK journalists haven't digged deeper on who financed - in a big way - the campaign to leave the EU *cough* bears&dragons *cough*. But then again large groups of tabloids and UK newspapers are owned by powerful affluent foreigners whose interests are aligned with leaving the EU. There were also serious vested interests in leaving the EU that grossly benefitted rival global superpowers as well as a small minority of uber wealthy UK individuals, with money tucked away in offshore tax havens, that wanted to escape all regulatory control from Brussels at the expense of the whole bloody country. Meanwhile, the small people, SMEs, and large companies suffer the brunt of the ongoing Brexit financial and trading debacle and no one is held accountable.

Brexit is an unmitigated disaster and there is no way to hide it.

You can go blue in the face arguing the opposite, but the facts and figures speak for themselves. Guess which is the only country out of the entire OECD (comprised by 38 countries) which is expected to grow at 0% in 2023? Yep, the UK. Its growth will flatline, the same as some politicians' electroencephalogram. There is only one other country that will fair worser with -8% (Russia), but that's only because everyone, and their mother, has imposed state-sanctions on them for waging their illegal war against Ukraine.

More and more people are waking up to the hard truth – Brexit was a mistake. The country, its people, were misled by the hubris of a handful of Tory politicians. Brexit does not favour the United Kingdom in any meaningful way; quite the opposite, it undermines it, it weakens its economy, diminishes its clout in the EU and worldwide, and makes the country overall less competitive.

When I worked in the UK in 2014, at the time it was Europe’s leading economy and the most stable democracy, the country all fellow European countries looked up at with respect and admiration as an example to follow. The UK was in fact one of the joint leaders of the EU, along with Germany and France.

Eight years on it's in shambles, its economy in tatters, its politicians a laughing stock worlwide, even its pension plans have taken a blow. We dodged a silver bullet a few weeks ago with a major pensions crisis (liability-driven investments). Let’s see how that pans out in the context of a sharp rise of interest rates.

The situation can be neatly summed up in our now ex-PM own words: “I cannot deliver on this mandate.” And not because she is incompetent – because she is not, and neither were the previous PMs, well, except Boris – it’s because the mandate in itself is stupid, Brexit is a dead end. You cannot curb and stomp off migration and at the same time foster a growing economy; it just doesn’t work like that, it’s incompatible. You need migration to keep the economy flowing, growing, to fill all those menial underpaid jobs UK youngsters frown upon. Tell me about it, I travelled to the UK for work in 2010 and lived there for several years, so I know first-hand how it works.

Brexit will continue to create nasty ripples that destabilize the country, its politics, and its economy. Because inherently, Brexit is flawed to the core, a glaring mistake that acts like a millstone around our necks, dragging us down with it. Reality clashes with people's desires.

And that is the problem when irresponsible populist carreer politicians, such as Nigel Farage and others, who appealed to people's emotions, low instincts and feelings instead of their minds on poll day. It's all just empty promises and fireworks, nothing is delivered. When one votes with the heart and not with his mind we face such tribulations. The truth is that the ruling party has shot itself on the foot, has placed the UK on its knees, and has greatly impoverished our country for generations.

Can anyone name one benefit of leaving the EU, please?

Brexit was a mistake, it's time people realize and accept it. Acceptance is the first step out of this mess we have gotten ourselves into.

Anticipated elections should be called.

Conclusion

I know how most people show a manifest disdain for history, but the fact of the matter is that human nature never changes, as classical Greeks always gently reminded us, and the past provides valuable insights for the present, and even for our future. Lessons we should not ignore. This whole conclusion is going to be pervaded by the idea of unity and the importance it holds, in the past, present, and future with historic examples. Please bear with me.

Alfred the Great, King of West Saxons, sowed the seeds and paved the way to unite all seven Anglo-Saxon kingdoms into one, creating what in time would be England. A nation that would one day rule the world. It was through unity this was achieved.

Fast-forward to 1707, the Act of the Union. The four great nations in our land would eventually agree to create Great Britain. And its ‘great’ because all four saw fit and proper to stand united. This is what allowed Britannia to rule the seas and most of the known world, for centuries.

Do you see a pattern? It’s called unity, working together towards a common goal that collectively makes us all stronger

Because of the unbridled hubris of one man, which I will not name, in a quest to retain power and control over the Conservative party, he called a EU Referendum which led us to this very day. Are we any better because of it? Are we stronger as a nation? Is the influence of the UK in the world and the EU any stronger or has it waned? How’s our economy faring? Are goods and services cheaper? Did we sign all those commercial treaties we were promised that would grant us huge commercial advantages?

I’ll leave it to the reader to draw his own conclusions.

I want to end, again, by stressing the importance of remaining united in today’s world with a final example. Our US cousins, who’ve dominated the world scene over the last 100 years, would have not achieved this if it had not been for the long term vision and dogged perseverance of one statesman who - against all odds - managed to keep his country united despite a fratricidal civil war that threatened to tear it apart. Through his actions and steadfast resolution, he resolutely managed to preserve the Union, which laid the groundwork for peace and prosperity in the US over the next two centuries. Without unity undergirding his every actions, both pre and post-Civil war (generously reconciling both sides as one), this would have never been achieved. Our cousins also have the word ‘united’ in their country’s name for something, same as us. We should never forget, nor take for granted, the meaning behind it.

We need less career politicians and more statesmen (or stateswomen).

There are bears and dragons out there only waiting for a chance to pounce on Western Democracies to further their imperialistic and autocratic agendas. They do everything they can, day in and day out, to undermine and weaken the resolve of our democracies, sowing dissent amongst us. Because they know (divide et impera) this is the key to our downfall and how they will succeed. They relish in financing and giving media platforms to narrow-minded nationalist politicians (read separatist) that in effect splinter our society, eroding our unity as a country. It's happened in Spain (Catalonia) and is happening right now with Scotland. Be smart, don't feed the dragon.

The gist of the matter is that the United Kingdom was stronger (and richer) as a Member state of the Union, which does not seek dominion over others and preserves each Member state’s idiosyncrasy, united but not absorbed.

As classic Greeks always pointed out: 'Unity makes strength'. When will we ever pay heed to their valuable history lesson which saved their fledgiling democracy from the jaws of Persian autocracy? Had Persian imperialism won, our world would now be a very different place. History repeats itself, over and over, because human nature never changes in an endless cycle.

“There is a remedy which ... would in a few years make all Europe ... free and ... happy. It is to re-create the European family, or as much of it as we can, and to provide it with a structure under which it can dwell in peace, in safety and in freedom. We must build a kind of United States of Europe... for those who will, for those who care.” – Sir Winston Churchill, University of Zurich speech, 1946.

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

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

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Living in Spain – UK Government
Spain: register your residency – UK Government
How to Apply for Healthcare in Spain – 8th November 2014
Brexit and You – 21^st February 2018
Brexit and Spanish Residency – 21^st September 2018
How to apply for Spanish residency– 1st February 2019
8 tips for Brexit – 21st February 2019
Brexit and Living in Spain guide (UK Government) – 1^st May 2019
Brexit checklist: it’s the final countdown – 16^th October 2019
Post-Brexit Taxation in Spain – 2^nd March 2020
The human cost of Brexit – 1^st June 2021
Brexit: one year on – 31^st January 2022
Brexit is destabilising the United Kingdom – 21^st October 2022

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Spanish lenders pull the plug on fixed interest rate mortgage loans

Raymundo Larraín Nesbitt, October, 14. 2022

Copyrighted © 2022. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
14th of October 2022

The writing was on the wall.

We had been advising clients since inflation started to rear its ugly head in 2021 (well before Ukraine’s unlawful invasion), to hire mortgage loans referred to a fixed interest. It was clear that in a context of rising interests that - if we are to go by historic precedents could last a whole decade - this was the smartest move in the market.

Despite the irresponsible rose-tinged outlook on inflation of silver-tongued central bankers who carefully crafted speeches on how inflation was only 'temporary' and would soon subside once the global supply chain was restored, we strongly advised all clients this would not be the case and inflation was here to stay - for many, many years. This historically had always been the case.

Now is the right time to buy property in Spain – 21^st November 2021

Tax breaks on buying property in Andalusia extended indefinitely! – 8th December 2021

Mortgage loans: fixed or variable interest rate? – 11^th March 2022

Guide to Buy Property in Spain – 8^th May 2022

Following the relentless onslaught of a soaring inflation that shows no signs of abating, the US Fed boldly hiked interest rates again and again, which led Spanish lenders over the last months to apply 50% increases on their offers, restrict them, and now altogether remove them from the market as they hurt lender's balance sheets over the long run (albeit greatly benefit borrowers and consumers).

Any borrower who followed our advice, will now reap the rewards over the next years, paying significantly less money on servicing their mortgage instalments. Kudos to you.

For those who chose to ignore it, and hired instead variable interest mortgage loans, they are going to feel excruciating pain.

For those who missed out on the opportunity, it is now too late to hire a fixed interest mortgage loan, that is at a reasonable price.

Simply put, banks are no longer interested in peddling them - for now. Fellas, time to grab your umbrellas!

“A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain.” – Mark Twain.

American writer, humourist, entrepreneur, publisher, and lecturer. Among his novels are The Adventures of Tom Sawyer (1876) and its sequel, the Adventures of Huckleberry Finn (1885).

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

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Reminder - Q3 2022 Non-Resident Income Tax filing (NRIT)

Raymundo Larraín Nesbitt, October, 1. 2022

Marbella-based Larraín Nesbitt Lawyers 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.

Just a gentle reminder to all non-residents, who own property in Spain and rent it out (whether long or short-term i.e. holiday home); you must file your Q3 2022 quarterly tax return now in October. You are being taxed on your rental income for the previous three months: July, August, and September.

For 2022, the non-resident tax calendar is as follows:

Q1 January – March. Filed on the first 15 days of April
Q2 April – June. Filed on the first 15 days of July
Q3 July – September. Filed on the first 15 days of October
Q4 October – December. Filed on the first 15 days of January 2023

Our cut-off date to accept filing Q3 2022 non-resident tax returns is Friday the 14th of October 2022.

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

We can offer you this tax service for a very competitive fee:

EU resident: 125 euros*
Non-EU resident: 75 euros*

*_{The quoted fee is plus vat, per property and per tax quarter, it includes up to two joint owners i.e. husband & wife.}

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

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

Related tax service

Holiday Rental Accounting Service (HRAS)

Related taxation articles

Holiday Rental Laws in Spain – 8th of March 2015
Non-Resident Taxes in Spain – 8th December 2015
Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
Renting in Spain - Landlord´s Taxation – 8th of January 2017
Holiday Home Taxation in Spain – 8th of July 2017
Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
Non-Resident Income Tax – 8^th December 2017
Holiday Rental Accounting Service (HRAS) – 16^th January 2018
Holiday Rental Taxation in Spain – 8th July 2018
Renting in Spain: are you still overpaying income tax every quarter? – 16^th October 2018
You are taxed at source on renting out in Spain – 30^th November 2018
Did you get an email from AirBnb over your Spanish tax details? – 21st December 2018
Important information from the Spanish Ministry of Finance – 7^th January 2019
Property portals and rental platforms to pass on landlord details to the Spanish Tax Authorities. Are you prepared? - 12th January 2019
Holiday lettings: VAT invoice dissected – 11th February 2019
Requerimiento - Spanish tax agency's summons – 7th March 2019
Save 70% on your landlord tax bill – 8th March 2019
Spain's new rental law in 2019 – 8^th March 2019
8 Tips for Buy-To-Let Success in Spain – 21^st October 2019
Rentals climb for the fifth consecutive year in Spain! – 12^th February 2020
Spanish Government caps rent hikes to 2% in 2022 – 1^st April 2022
Spanish Government extends the 2% rental cap a further 3 months – 21^st June 2022

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Andalusia abolishes Wealth Tax

Raymundo Larraín Nesbitt, September, 19. 2022

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
19th of September 2022

The writing was on the wall. Andalusia’s new government is hell-bent on lowering taxes across the board. And we more than welcome this!

In what constitutes the sixth wave of tax reductions in Andalusia (mamacita), its president, Mr. Juanma Moreno, announced today he will be approving a law tomorrow that suppresses wealth tax going forward.

In plain English, following on the example of the liberal region of Madrid, he will set on wealth tax an allowance of 100%. Which in practical terms, is tantamount to abolishing wealth tax altogether in the region of Andalusia, so taxpayers with get to pay nada. This change benefits both residents and non-residents in Spain.

This change makes Andalusia one of the hottest the hottest place to invest in all of Spain.

But wait, it gets even better!

Andalusia’s’ regional government also announced it will deflate personal income tax or IRPF (something which honestly Spain’s lovely central social-communist government should have done about a year ago). In other words, the regional government is going to adjust the regional band of IRPF in line with rising inflation. For laymen, it translates to yet another tax reduction on the most important tax: IRPF. Deary me, I think I’m starting to like politicians. Holy.

Honestly folks, it doesn’t get any better when it comes to taxation. Hats off to our regional overlords.

When the new law is enacted, we’ll write a more detailed article on it. You really have to see it to believe it!

“I have to be seen to be believed” – HRH Queen Elizabeth II

Elizabeth Alexandra Mary (1926 – 2022). Was Queen of the United Kingdom and other Commonwealth realms. She was queen regnant of 32 sovereign states during her lifetime. For over 70 years, she wisely ruled during the longest period of peace and prosperity known to the United Kingdom and the Commonwealth. Despite suffering major family setbacks and international events, she always kept a cool head, leading by example on what constitutes a sovereign’s sacred duty: to serve country and people. Her whole life was a living embodiment of what signifies to serve others, even till her last day. Duty, duty above all. She was succeeded by her eldest son, Charles III.

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

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Strong US dollar vs. weak euro creates unique investing opportunities for Americans to snap up Spanish property

Raymundo Larraín Nesbitt, September, 16. 2022

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
16th of September 2022

The ECB’s erratic and lacklustre monetary policy, always lagging behind the resolute path set by the US, translates into a weak euro. The Fed has no qualms to firmly hike the price of money to stave off inflation - unlike in Europe. As a result, the US dollar has hit an all-time high against the euro, even reaching parity multiple times.

In plain English, Spanish (European) property has now become dirty cheap for US investors. Savvy investors have picked up on this, and the smart money is flowing in to invest in large cities and sought-after areas.

Not least, is the fact that Spain is living a sweet property boom over the last two years, with resales appreciating 8.5% and offplan by 10% YOY. This is the cherry on top that sweetens the deal.

Did I mention that US nationals can benefit from a coveted Golden Visa on investing in Spanish property, allowing them unfettered access to a country in the Schengen Area, bypassing the pesky 90-180-day rule?

Bottom line, for our US cousins buying Spanish (European) property now is a win-win.

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

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