Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:35:16
April 28th, 2015
for the purchase of a Spanish property can simplify and speed up the purchase
process; and minimise transaction costs.
The following is a
reminder of some of the principal ‘paperwork’ items to consider, when dealing
with a Spanish property purchase.
1. Appointment of
Legal Representative. In order to be
fully protected in any Spanish property transaction, it is essential to appoint
in writing, a legal representative, who is independent- both from the other
party to the transaction and also from the estate agent negotiating the
transaction. The appointed legal representative must be duly qualified,
registered with the applicable Colegio de Abogados (Law Society equivalent) and
up to date with their professional practice requirements. They must also carry
adequate professional indemnity insurance cover. It is also essential that all
communication is in a language which both the buyer and the legal
representative speak perfectly. There should be no risk of any misunderstanding
or ambiguity. Advice should be obtained also before signing a legally binding
contract, as to the structuring of the purchase, for estate planning purposes.
2. Survey. Even if not required for mortgage
purposes, a survey by an independent expert is recommended before any Spanish
property purchase- both to verify the condition of the property; but also to
ensure that the description of the property (in the Property Registry and Town
Hall/ rates department) is consistent with the position ‘on the ground’. This
avoids later problems. In many cases, there are inconsistencies, which require
3. Power of Attorney. If the buyer does not anticipate being
personally present in Spain for the legal / transactional process, then it will
be necessary for a Power of Attorney (containing the necessary legal powers) to
be signed in favour of the appointed representative/ legal adviser.
4. NIE Certificates. NIE (fiscal) numbers will be required
for any Spanish property buyer; and up to date NIE certificates will need to be
provided to the Notary on completion.
5. Bank Account. Any Spanish property buyer will require
a current bank account in Spain usually- to deal with the purchase funds; and
in any event, for payment of the property outgoings following completion. It is
advisable to be certain in advance, as to the charges which will be applied in
crediting monies to the account; and for making transfers from the account.
Spanish bank charges can be surprisingly high; and the manner of funding the
purchase price; and transfer/ Foreign Exchange issues, can significantly affect
6. Mortgage. If mortgage funding is required, the
process should be started as early as possible, as significant delays can
otherwise occur- as all aspects of the title to the property and its value as
security will be scrutinized by the bank’s advisers; and this can be a lengthy
process. Also in undertaking any loan in Spain, full clarity on costs must be
obtained- not only in servicing the loan, but also the initial/ set-up costs;
and any amounts payable to redeem the loan also.
7. Capital Gains Tax/
Accounting. From the very
outset of a purchase, attention should be paid to the collation of all financial
information and receipts- e.g. construction/ works invoices and other
accounting paperwork- principally to build up a solid record of possible future
deductions/ allowances for capital gains tax purposes, for the occasion of a
subsequent sale of the property.
8. Title Deeds. Following completion, the buyer should
receive an official copy of the Purchase Deed (‘escritura’). The Registered
Title details can usually be extracted from the Title Deed; as an up to date
copy of the Registered Title is usually appended to the rear of the escritura,
once the registered title is updated to reflect the sale and purchase of the
Permission. Proof of
compliance with planning legislation; and permission for the legal occupation
of the property will be required. Usually for any missing documentation,
official copies- or confirmation of legal compliance- can be obtained from the
planning (‘urbanismo’) department of the Town Hall.
10. Rates Information. The full rates details for the property
will be required, together with proof that there are no rates arrears.
Reference numbers can usually be found on the receipts for rates (IBI/ SUMA)
sent out by the local Town Hall (‘Ayuntamiento’) or the sellers’ paying bank.
Missing information can usually be obtained fairly easily from the rates
(‘Catastro’) department of the Town Hall. An apportionment of rates will need
to be made between the seller and the buyer on completion.
11. Community Details. Full details of the Community
Administrator will be required, together with a copy of the Community statutes
and (if possible) copies of the minutes of recent Community meetings. A summary
of Community charges over recent years will be needed; and also details of any
forthcoming charges, which have already been notified. The most recent
statement/ receipt of Community charges will be needed; and before signing the
sale and purchase deed (‘escritura de compraventa’) before the Notary, a
Certificate by the Community Administrator, confirming that there are no arrears
of Community charges will be required. An apportionment of Community charges
will need to be made between the seller and the buyer on completion.
Contracts. Receipts for the
most recent payments of property outgoings (principally electricity/ water; and
if applicable, gas) will be required on completion, together with the latest
contractual terms of supply- in the absence of copies, these can be obtained
from the local offices of the services supply companies. Following completion,
the services contracts will need to be transferred to the buyer- services
apparatus updating works may be required, so the advice of an independent
expert is recommended before a contractual commitment is made. An apportionment
of costs will need to be made between the seller and the buyer on completion.
13. Energy Performance
Certificate. The seller is
required to provide an energy performance certificate in relation to the
property on completion.
14. Wills. Every purchaser of a Spanish property
should ensure that they have an up to date validly executed and registered
Spanish Will, which accurately reflects their wishes for the succession of
their Spanish property interest in the event of their death.
Resident Tax Returns. Non-Spanish
resident owners of Spanish properties have to make an annual tax declaration in
Spain. Usually a fiscal adviser is appointed to deal with this, following
completion of the purchase.
The above is a
non-exhaustive checklist- really just the bare minimum.
The Legal 4 Spain team
provides a full property conveyancing service (buying and/or selling)
throughout Spain. We are always happy to provide a competitive cost estimate at
the outset of a transaction on a no-obligation basis.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:33:38
March 5th, 2015
Every non- Spanish
resident owner of a property in Spain has to file during each calendar year (in
respect of the immediately previous calendar year), a tax return in Spain
(Form- Modelo 210). It is a simple matter, involves a relatively modest cost;
and (generally) a fairly modest amount of tax to pay, based on the property’s
rateable (Catastral) value.
Although it is
obligatory for these tax returns to be made, the follow-up by the Spanish Tax
Authority against those who have failed to declare in the past has been fairly
limited in practice; and the consequences not disturbingly significant.
But this is changing.
Inheriting a Spanish Property Puts The New Owner ‘On The Radar’
Very simply (and quite
unsurprisingly) technological advances in the manner of operation of the
Spanish Authorities- and therefore improvements in communication between them-
are occurring at a rapid pace.
It is therefore naïve
in the extreme to assume that dealing with a Spanish asset through one Spanish
Authority does not trigger awareness in others.
completion of Spanish property purchases and inheritances now, those acquiring
the property are immediately notified of the awareness of the change of
ownership by the corresponding tax authorities. (A helpful ‘pointer’!)
Failure to File Non-Spanish Residents’ Returns
1. A significant issue
(which we are now seeing occurring automatically) is that if a filing date is
missed, a recalibrated demand is sent out including penalties/ interest. The
powers of enforcement for failure to pay can be extreme- legal action,
embargoed accounts/ assets; ultimately the facility for the Spanish Tax
Authority to seize and auction assets to cover tax debts due. (Extreme cases
obviously, but the point being that the Spanish Tax Authority does have- and
does exercise on a case by case basis- extensive rights and facilities to
recover tax debts).
2. A further
potentially alarming consequence is something which is coming as a nasty
surprise for many sellers of Spanish properties who have failed to file their
annual tax returns.
When a non-Spanish
resident sells a Spanish property interest, 3% of the declared sale price is
retained for the Spanish Tax Authority. This is, in effect, on account of
Spanish capital gains tax liability. But if the retention is greater than the
actual tax liability, the seller can reclaim the tax.
But the Spanish Tax
Authority is now scrutinising the tax return history in dealing with reclaims-
and if found to be inadequate or incomplete, the tax retention on sale may not
So, 3% of the property
sale price can be ‘lost’ (even if there is no gain on the sale) for a simple
failure to make this tax return. To put that in context, on recent property
sale we saw for 900,000 Euros (at a loss) the seller waved goodbye to 27,000
Euros, for this administrative oversight.
therefore needs to be paid to this issue in the context of (and indeed following)
a Spanish property sale.
The Spanish Tax
Authority ‘means business’ over this. Compliance is, in reality, neither
complicated nor expensive. We will be happy to refer enquiries to associates
who provide this service extremely efficiently and cost-effectively; and their
service being provided in English, for non-Spanish speakers.
commentary is not intended to be exhaustive; and case-specific legal advice
should always be sought.
Please speak to us at
Legal 4 Spain when considering a sale or purchase of a Spanish property, to
ensure you have the best quality legal representation to protect your interests
fully; but always at a competitive cost.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:32:46
January 30th, 2015
covered the concerns many owners of Spanish properties express regarding the
level of Spanish bank charges, it has been recommended that the issue of
Foreign Exchange (FX) should also be specifically mentioned.
The current weakness
of the Euro currency is fueling interest in the Spanish property market, where-
even with the currency issue on one side- prices in many areas remain
However, the converse
of this happy consequence of Euro weakness for inward investors, is that
sellers of Spanish properties wishing to repatriate funds to their countries
outside the Eurozone, are facing unattractive exchange rates- which can impact
strongly on final returns from Spanish property sales.
But an important (and
potentially very costly) issue which faces all individuals coming into or going
out of the Euro currency is often overlooked. This is the process and cost of
FX- particularly in the context of larger transactions, e.g. buying and selling
properties. It comes as a shock to many, to find that the total cost of a High
Street bank to High Street bank transfer where currency changes between Euros
and Sterling (for example) can be as high as 5%. That is a 5% ‘loss’ to the
individual making the transfer!
And a significant
proportion of this cost represents the banks’ profit in the FX trade. Indeed,
several major banks make a point of emphasising their free or low cost
electronic transfers in and out of the Eurozone- superficially making this
option appear to be economical. However, as the real profit for the bank is in
the FX trade itself, the relatively tiny cost to the bank of the actual
electronic transfer is of no real consequence in larger transactions.
It is therefore
advisable before committing to an FX transaction, to be absolutely clear (based
on comparing the actual amount debited from your account in one country; to the
final net amount which will be credited to your account in another and
considering official FX rates) as to the cost to you of the FX transaction.
This also enables a like for like comparison between the cost of your High
Street bank to High Street bank transfer; and the deal offered by an
independent FX specialist.
Of course, before
engaging an independent FX specialist to save money on the FX trade, it is
essential to be assured of the legal and regulatory standing of the FX
specialist in question, to avoid the obvious risks and pitfalls.
engaged in transactions in Spain for foreign nationals where there are
frequently FX requirements, will generally be able to recommend a pre-vetted
independent FX specialist, to assist in minimising the otherwise hidden costs
in the FX process.
Please speak to us at
Legal 4 Spain when considering a sale or purchase of a Spanish property- or if
you have any FX requirement- as this is an area we will be able to assist, to
protect your interests fully; but always at a competitive rate.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:31:27
January 5th, 2015
Since we covered this
subject previously, there have been significant changes within the Spanish
banking sector, principally to save failing Spanish banks. The Press has has
then had a field day as directors’ dealings and conduct are scrutinised, with
all this, there seems to have been little improvement- complaints of poor
customer service and excessive charges are continually levelled at the
remaining Spanish banks. This is particularly the case from non- Spanish
account holders, who are used to free current account banking; and very modest
fixed rate charges for electronic funds transfers.
Nearly all Spanish
property owners are obliged to have a Spanish bank account, to pay property
outgoings; and also to have a Euro banking facility, for general expenditure in
But invariably, they
are shocked at the high charges for holding and operating a Spanish bank
account. And then the real sting for Spanish bank customers can come when a funds
transfer needs to be made, either in or out of a Spanish bank account.
Two cases have been
referred to us recently- one where a client made a transfer from their Spanish
Euro account to their UK Euro account (having sold their Spanish flat), and the
Spanish bank sought to charge 1,000 Euros for the transfer. Another, where an
inward receipt of Euro funds from a UK Euro account was charged at 300 Euros.
Both cases involved major Spanish banks; and in both cases when challenged, the
banks substantially reduced the charges.
It is curious that
Spanish banks should purport to charge such high fees in the first instance;
and then with little discussion, simply back down.
The first issue is
quite straightforward. UK nationals in particular, are accustomed to fairly
modest fixed fees (or even zero cost) when making electronic payments; and
routinely zero cost for electronic receipts of funds. In Spain however, when
the electronic transfers are international, (even transfers in Euros), the
default position in many cases, is for the bank to try to charge on a
percentage basis, rather than a fixed fee.
Clearly this is
commercially unjustifiable; as the process/ cost to the bank is identical,
whether the transfer is for 10,000 Euros or 1,000,000 Euros. So logically, a standard
fixed fee should be applied.
And also, the
implementation of the SEPA (Single Euro Payments Area) European Union
Regulations, is certainly a helpful factor for Spanish bank customers who are
concerned about high charges.
924/2009, the European Parliament decreed in particular, that charges for
electronic payments between EU member states (of up to 50,000 Euros) must not
exceed the applicable charge for an equivalent national transfer.
As national transfer
charges are very much lower (and generally zero for electronic receipts) the
SEPA Regulations should be introduced into the discussion with your Spanish
bank as to applicable charges, before any significant transfer into or out of
your Spanish bank account is authorised.
Quite possibly for
larger funds transfers, (and depending on the bank account terms) splitting the
payments into smaller amounts (sub- 50,000 Euros) can considerably reduce the
charges. Indeed, the most PR conscious Spanish banks are already including in
their standard terms, free transfers for up to 50,000 Euros within Europe,
waiving even the limited fee they would otherwise be entitled to charge under
the SEPA Regulations.
These are very
positive developments for Spanish bank customers; but during this process of
realisation/ change, it remains necessary to discuss and negotiate charges with
your Spanish bank before authorising significant funds transfers, so as not to
be caught by the bank’s default charging structure.
If necessary, new bank
account opening in Spain is now easier than ever before. A small amount of
research and paperwork can lead to huge savings, by moving to an alternative
Spanish bank that offers competitive charges as a standard feature.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:24:09
July 24th, 2014
Summer in Spain
inevitably brings an unwelcome visitor– the bogus gas inspector, preying on
those who are enjoying their relaxing holidays. Like all the best scams, this
one evolves from an element of truth. In Spain, mains gas supply is relatively
scarce, so supply is usually by bottled gas- and the pipes and apparatus must
be inspected every 5 years by law.
The scam works as
follows: a ‘representative’ usually wearing a uniform and carrying a clipboard
turns up unannounced, to carry out a ‘compulsory gas inspection.’ An ID may be
fleetingly presented; and even forced entry into your property attempted. After
a brief inspection, the gas installation is condemned, and the financial pain
commences. Several recent cases we have heard of have involved charges of
between 300-500 Euros for replacement of an out of date pipe, yet all the
‘inspector’ did was dust the pipe- usually actually in need of renewal, so
still left in a dangerous state.
Any official company
would make an appointment to carry out an inspection, and their employee’s ID
should be offered for thorough examination. The two principal companies dealing
with gas supply in Spain, Repsol and Cepsa, may contract out the inspections to
authorised companies. Your local Ayuntamiento (Town Hall) should be able to
tell you who is authorised to carry out gas inspections in your area. Make a
note of the name of the company and contact details, so you can check that your
gas inspector is legal.
If you have any doubts
at all, refuse entry and do not sign anything. If your uninvited caller refuses
to leave, threaten to call the Police. This will usually see them on their way.
Sometimes these conmen operate in pairs- one of them ‘casing’ the property with
a view to burglary either then or at a later time; whilst the other one carries
out the ‘gas inspection,’ thus perpetrating two scams in one.
Some very obvious, but
worthwhile precautions are:
1. Never allow any
casual callers into your home.
2. Do not sign anything until it is fully understood; and the service provider
3. Never allow unsupervised access to your home.
4. For official matters, always ensure you speak a common language or have an
representatives or tradesmen will not object to your verifying with their
office, and the vast majority of (legitimate) Spanish companies operate an
appointments based system anyway, so you should always receive advance notice
of any inspection visits.
services related scam in Spain is operated by genuine but unscrupulous
employees of official companies. They may seek to sell other services (eg.
insurance or fumigation services). Sometimes an up-front deposit is requested
for bogus add-ons. Any such offers should be carefully scrutinised and never
agreed to on the spot, without further investigation/ consultation.
These crooks (when
dealing with Spanish and non-Spanish alike) capitalise on supposed ignorance of
householders- so be aware of the scams, to ensure that you are not separated
from your hard earned Euros!
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:21:44
June 6th, 2014
Dealing with the
annual Spanish income tax return (‘Declaración de la Renta’) for Spanish
residents/tax payers is not one of our professional service areas.
Nevertheless, it is an
issue that concerns many of our clients and contacts; and we have been asked to
circulate some general information about it.
The final date for
submission of Spanish tax returns is 30 June. However, for cases where tax is
to be settled by direct debit, the cut off point is earlier. In any event, it
is recommended that filing/ payment is submitted by mid June at the latest, to
avoid the risk of last minute ‘hitches’.
This summary does not
relate to non- Spanish residents owning properties in Spain. The rules that
regulate their obligation to file an annual Spanish (non-residents’) tax return
in Spain differ substantially. That subject will be covered separately.
Some points of general
information we wish to publicise are:
1. Key dates. Spanish tax returns to be filed by 30
June 2014 deal with the calendar year from 1 January 2013 to 31 December 2013.
Financial matters from 1 January 2014 to 31 December 2014 will be covered by
the tax return to be filed by 30 June 2015.
2. On line filing. It is recommended that the tax returns are filed
on line (in preference to posted, paper forms); as it is relatively
straightforward and more secure.
3. Professional advice is recommended. It is possible to deal with
Spanish tax returns personally. However, we recommend that a certified ‘gestor’
(administrator/ accountant) is consulted; to submit the tax return for the
client. For straightforward cases, the charge is generally fairly modest.
4. Avoid errors! Errors in tax returns can be unexpectedly complicated
and extremely time consuming and lengthy to regularise subsequently. Accuracy
of the data provided and precision in the completion of the tax form in the
first place are therefore crucially important. As stated above, professional
advice is recommended.
5. Claim allowances! There may be allowances/ credits/ deductions
depending on the specific circumstances of the tax payer. To ensure all
applicable benefits are correctly claimed, professional input is recommended,
as stated above. Also, advance planning and documentation collation is
essential, to ensure nothing is missed in a ‘last minute rush’. Some examples
of the benefits to consider are: the personal tax allowance; additional
allowance for married couples declaring jointly; employment allowance; pension
contribution deductions; and pension benefits.
6. Late filing penalties. Failure to submit a tax return on time
can result in a late filing penalty (usually 100 Euros).
7. Increases in late-paid tax. Failure to submit a tax return on
time when tax is payable can result in additional tax charges- a periodic
increase in the tax amount plus interest.
8. Exemption from obligation to file. There is an exemption from
the general obligation to file a tax return for those earning under 22,000
Euros annually when tax is deducted at the employment income source. But beware
the ‘small print’. In each case when an exemption is relied upon, there are
various exceptions to this general rule. For example, cases where: there is
foreign employment income; or more than one source of income.
9. File early; reduce rebate delays. An advantage of filing the tax
return sooner rather than later is that it brings forward the date of receiving
any rebate due. Rebates can in any event, take several weeks (if not months) to
10. Information required. In order to complete the tax return, the
information/ documentation varies from case to case; but for employment income,
an employer’s certificate is required; receipts for property rates payments;
end of year certificates for any bank accounts; statements of any investment
income/ disposals/ gains; and any rental income details.
There is a lot of
information about Spanish tax returns on the internet, but much of it is out of
date and/ or confusing. Caution is therefore strongly advised. There is also
the on line guidance provided by the Spanish Tax Authority- indeed, in English
for non-Spanish speakers. But many find that resource complex and unwieldy.
For these reasons (and
the others stated above) in our opinion, a personally appointed ‘gestor’
(engaged in good time), is generally the best option. This assists in avoiding
the pitfalls in this exercise; and ensuring that the benefits due are properly
provided for and claimed- thus ensuring full legal compliance, but tax payment
at the lowest level legally and legitimately possible.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:21:02
May 23rd, 2014
In light of the
recently updated traffic laws in Spain, we have obtained from the Guardia Civil
an up to date list of the points they are routinely required to check in Spain,
when stopping a driver in a ‘control’ (check point), or in the event of a
1. A ‘Carnet
de Conducir’ (driving licence) which is valid for Spain, permitting
the driver to drive the vehicle in question. This must be the original document
or a copy certified by an official Spanish body- eg. the ‘Ayuntamiento’ (Town
Hall) or ‘Jefatura Provincial de Tráfico’ (Provincial Traffic Headquarters).
2. A ‘Documento de Identidad’ (ID document eg. Passport). This
is required to verify the identity of the driver and validate the driving
licence in cases where the driving licence does not include a photo.
3. The ‘Permiso de Circulación’ (vehicle registration
document, showing the vehicle description and registration number; and owner’s
name and address). This should be the original document (or certified copy, as
point 1. above).
4. The ‘Ficha Técnica’ (the statement of technical
specification, which also contains the record (and should have the up to date
stamp) of ITV (periodic vehicle inspection) for vehicles requiring an ITV. This
should be the original document (or certified copy, as point 1. above).
5. The ITV (periodic vehicle inspection) sticker. The ‘Ficha
Técnica’ contains the written record of the inspection history, but it is also
a legal requirement (for a vehicle for which an ITV is necessary) to have the
ITV sticker clearly displayed.
6. The most recent receipt for the local Town Hall car tax.
Although this is not on the official list of requirements, it is recommended to
keep it with the paperwork, to be able to demonstrate compliance with all
national and local requirements.
7. The original current certificate of car insurance (or certified
copy, as point 1. above); and proof of payment of the annual premium.
8. Two warning triangles and a spare set of bulbs.
9. Two reflective safety jackets (kept inside the car-
accessible without leaving the car).
10. A spare set of glasses if the driver wears glasses for
The above is a
current, general guide to the basic requirements, rather than an exhaustive
list. In the case of non- standard passenger vehicles; or any case-specific
individual circumstances, there could be additional requirements. Guardia Civil
‘Cuarteles’ (garrisons, attended by officers for contact with members of the
public) are located all over Spain. If in any doubt, attend in person and
these simple and basic rules can lead to fines or penalty points.
So, please SHARE this
with your friends and contacts who live in Spain, or visit and drive in Spain,
to help them to be lawful (and to avoid fines/ penalties!).
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:20:22
May 8th, 2014
On the grounds that
‘ignorance of the law is no excuse’, all drivers in Spain are advised
immediately to familiarise themselves with the detail of the new traffic laws
which are coming into effect on 9 May 2014 (Ley 6/2014 modificando la Ley sobre
Tráfico, Circulación de Vehículos a Motor y Seguridad Vial 339/1990); a mere 21
Among the new
provisions are the following:
1. Speeding fines
apply for exceeding the limit by just 1kph! On some motorways, the speed limit
is being increased from 120kph to 130kph, but in many towns, the speed limit is
being reduced from 30kph to 20kph.
2. If the Guardia Civil observe a motoring offence and note the vehicle
registration number, this provides sufficient evidence to prosecute- no need
for them to stop vehicles.
3. A minimum fine of 1,000 Euros will be payable by drivers caught driving
whilst double the drink drive limit or above; or in all cases for reoffending
drink drivers; and drivers under the influence of drugs.
4. The Guardia Civil can seize any vehicle carrying children without legally
compliant child seats.
5. The very specific rules as to where children must sit in the vehicle
(according to age/ height) must be observed, otherwise drivers face heavy
6. Cyclists under 16 years of age must wear helmets.
7. Drivers have much higher duties to ensure the safety of cyclists of all
8. Speed camera/ radar detectors are prohibited.
9. An EU Directive is to be implemented so that driving offences committed in
one EU country are reported to the EU country of registration of the vehicle in
10. Much stricter rules are being implemented for the Spanish registration of
foreign registered vehicles kept in Spain.
The above is by no
means exhaustive. As can be seen, the new rules are far reaching. Knowledge of
the details and observation of the requirements in practice is of fundamental
It is clear from the
increased powers to prosecute and fine drivers, that the Spanish Authorities
‘mean business’ with these important legal changes.
Please SHARE this with
your friends and contacts who drive in Spain, to help them to be lawful (and to
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:19:39
April 28th, 2014
The Padrón is the
register kept by each Town Hall in Spain, of the people who live in the town-
either as property owners or tenants. The closest UK equivalent is the
It is compulsory for
residents of more than 6 months in an area to ‘empadronarse’- to be registered
on the Padrón (as a separate administrative process from residency applications)
but many fail to do so.
Some of the advantages
of ‘empadronamiento’ (being registered on the Padrón) are:
1. It can provide
taxation advantages (eg. Spanish Succession Tax).
2. It enables children to be enrolled for local education.
3. In the case of limited school places, it is used as one of the criteria for
awarding places (determining catchment area).
4. It is required in order to be registered for local healthcare services.
5. It provides an entitlement to vote in local and European elections.
6. In some areas, it is required to be able to use municipal facilities at
7. Town Hall funding is affected by the number of people on the Padrón. So,
registering helps boost your local Town Hall’s resources for local services and
8. It is necessary in order to purchase and register a car in Spain.
9. It is necessary in order to marry within the local municipality.
10. It is necessary for benefits/ social services access; and to use the local
employment agency (Job Centre equivalent) facilities.
Registration on the
Padrón is a simple exercise- and is either free or just a nominal charge is
made, depending on the area. Specific requirements in terms of documentation
vary from town to town. So, before applying, it’s always best to make a
preliminary visit to the Town Hall, to get a full up to date list of
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:18:03
March 24th, 2014
weather, its rich culture, its relatively modest cost of living, and its close
proximity to other European countries, have always meant that it is a dream
destination for many, to reside and to savour all the country has to offer. For
those who are prepared to ‘take the plunge’, the demographic changes in Spain
over recent years; and the economic impact of the financial crisis have in many
ways only added to its desirability and feasibility as a potential country of
confirm that 13% of Spanish nationals have emigrated from Spain in the last 2
years. And as a result of the impact of the economic crisis and concerns over
taxation changes, a huge number of non-Spanish nationals have returned to
residency in their countries of origin over the same period. So, the total
population of Spain now stands at around just 70% of the UK population. But
Spain is almost 4 times larger than the UK!
over-building in Spain during the pre-crisis period and subsequent Spanish
property price crash mean that there remains a significant over-supply of
properties- in many cases, owned by very keen sellers. So, a relatively
under-populated country offering clear quality of life benefits and incredibly
attractive property investment opportunities…
OK, so where’s the
Many who have abandoned
Spanish residency over recent years have expressed concerns about taxation- in
particular, the impact of the Spanish Wealth Tax and Spanish Succession Tax.
Government’s recent reintroduction of the Wealth Tax; and obligation for
Spanish nationals and Spanish residents to disclose (and be taxed on) overseas
assets, was met with dismay by many. But in fact, the impact has been found by
the vast majority to be far less harsh than was originally feared.
Also, much has been
made of the reductions in allowances in Spanish Succession Tax. But again,
under Spanish tax law, when expert estate planning advice is obtained and
implemented, there are many ways quite legally and legitimately to reduce the
impact of succession taxation.
As regards Spanish
income tax and other direct taxes, there are agreements and practice directives
in place between the Spanish Tax Authority and those of many other countries,
to ensure fair fiscal treatment in dual jurisdictional cases. So, for those who
are properly advised and correctly meet their tax declaration and payment
obligations, the position (in most cases) is neither as complicated nor as
onerous as might be feared.
Of course, individual
circumstances always need to be considered carefully- it is never a case of
‘one size fits all’ when it comes to Spanish taxation and estate planning.
Many factors are
relevant to determining tax liability, including even which part of Spain you
are dealing with.
In conclusion, we
always recommend that before any decision or investment commitment in Spain is
made, our clients take the opportunity to understand fully their fiscal
obligations, and to implement their tax and estate planning accordingly. By
planning intelligently to reduce tax liability as far as Spanish law permits,
and then promptly filing tax returns and paying the tax that is due, one
invariably achieves the most efficient result.
Ignorance of Spanish
tax law is no excuse; and equally, proper awareness and fiscal compliance (in
accordance with expert professional advice) need not be as financially
devastating as many fear to be the case.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:16:57
February 27th, 2014
In many cases,
particularly for Spanish property sales and purchases; and inheritance matters,
N.I.E. numbers (Spanish fiscal numbers) are of critical importance. They are
usually required extremely urgently, in order to avoid delays in legal
transactions and/or increases in tax liabilities.
There are three
principal ways to obtain N.I.E numbers:
1. In person, in Spain
at a National Police office. This usually involves three stages: the attendance
to present the paperwork and ID documentation; payment of the issuing tax; and
finally, return (in person) to collect the N.I.E. Certificate (usually after
7-10 days). There are independent service providers available, who assist with
the paperwork and provide guidance on the process. So, for individuals who are
able to be in Spain for the period indicated for this process (and whose
knowledge of the Spanish language is adequate), it is quite straightforward.
2. In person, at a
Spanish Consulate office (for example, in the UK: in London, Manchester or
Edinburgh). In this case, the process can be extremely lengthy and
inconvenient, as the Spanish Consulate operates as a ‘post box’ for submitting
the application to Madrid; and thereafter, communication has to be to a Spanish
address. We would only usually recommend this option in exceptional and
3. Through an
authorised representative, in Spain. There have been changes of practice and
procedural requirements over the years; and also documentation requirements
differ between areas of Spain. ID and legal representation has to be
specifically proved, so expert/ professional representation is generally
essential, to avoid problems and delays.
The issue of N.I.E.
numbers is one of the first points to be covered in any of our client cases. We
provide full guidance and assistance to our clients in overcoming this legal
hurdle. Obtaining N.I.E. numbers is not usually a ‘stand alone’ service that we
provide (although there are others who specialise in this service). However, we
do have a system in place for our client cases, where we can quickly and simply
obtain our clients’ N.I.E. numbers for them, when needed.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:14:18
December 17th, 2013
since its introduction has been that the 3% tax retention on Spanish property
sales by foreign owners is applied only to non- Spanish resident sellers.
Conversely, Spanish resident sellers should not suffer the same deduction.
However, the recent
tightening of the rules and practice guidelines in this area has meant that in
many cases, sellers who are Spanish residents are falling into the traps for
the unwary; meaning they are also losing 3% of the proceeds of their Spanish
property sales, in tax retention.
The reclaim process in
applicable cases can be very lengthy and convoluted. So, many Spanish property
sellers end up simply ‘writing off’ the 3% even though really, they should be
entitled to have the tax retention refunded, hence the reference to the loss of
the 3% in practice.
It is important to
appreciate that in this context, Spanish residency has two component elements.
The first is legal or factual residency (generally evidenced by a Certificate
of Residency). The second aspect, which is of equal importance, is that the
positive step must also be taken to become fiscally resident in Spain; and
annually to file the corresponding tax declaration in Spain. (In most cases,
this is an obligation of Spanish property owners, in any event).
Provided that these
fiscal obligations have been complied with in all respects and for the
requisite period; when a Spanish property sale is agreed, the Spanish Tax
Authority should issue a Certificate of Fiscal Residency. This, combined with
the evidence of factual residency, should satisfy the Notary and the Spanish
Authorities that no 3% tax retention should be made.
It should be noted
though, that even for non-Spanish residents, a later tax assessment can be made
following the sale, and capital gains tax charged, depending on the facts and
figures of the case in question.
sellers (Spanish resident and non- Spanish resident alike) still have to pay
‘Plus Valia’, the municipal tax on Spanish property sales. This is calculated
by reference to Catastral (rateable) value and the period of ownership.
In conclusion, it is
essential to have reliable professional guidance on tax issues and
transactional costs, before agreeing terms for a Spanish property sale.
Otherwise, there is no certainty as to the net sale price which will be
received. Please speak to our team at Legal 4 Spain, for clear advice and
competitively priced legal representation on Spanish property sales.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 14:21:15
June 28th, 2013
The new requirement earlier this
year for declaration of overseas assets by Spanish nationals and Spanish
residents was expressly intended to be ‘for information purposes only’.
Most took this to mean that there
would no immediate adverse fiscal consequences based on the declaration made.
Indeed, where income and gains arising from the overseas assets in question
were already being declared in Spain, the declaration of the details of the
assets should make no difference at all (pending any Wealth Tax revisions).
However, it appears that some were
unaware of one fiscal consequence of the declaration, being the impact of
the Spanish tax which arises from ‘imputed income’ arising from
non-principal residence properties.
To clarify, a Spanish national or
Spanish resident who owns a property which is not their principal place of
residence is deemed to derive an income from the property (based on its
rateable value) even if no actual income is received in respect of the
For second (etc) homes in Spain, the
Catastral value is used to calculate this liability. But for ex-pat Spanish
residents for example, who still keep a property in their country of origin,
the tax is assessed on the basis of the last declared value of the property. In
the case of the overseas asset declaration, the requirement is to declare open
market value of overseas assets.
So, in some cases, Spanish residents
are now being required to pay a significant amount of additional tax in Spain
in respect of their property in their home country, even though the property is
It is unclear as yet, whether this
is being universally applied- or indeed was an intended consequence of the
overseas asset declaration. Hopefully some clarification will be forthcoming
from the Spanish Tax Authority, as it is a factor which will need to be taken
into account by those considering becoming resident in Spain, but keeping their
‘bolt-hole’ back in their country of origin.
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 14:18:39
May 16th, 2013
From 1 June 2013, a new legal
obligation arises for sellers and landlords of Spanish properties to obtain an
Energy Performance Certificate. Failure to do so can expose the Spanish
property owner to the risk of very high fines (3,000€- 600,000€); and also the
risk of legal action from buyers/ tenants.
There are undoubtedly multiple
benefits from improvements in energy efficiency. However, just at a time when,
more than ever, Spanish property owners need reductions in costs and complexity
in dealing with Spanish properties, this change has been met with dismay by
many property professionals and economic commentators alike. The definitive
step of immediately imposing a ‘sellers’ obligation’, rather than making a
‘buyers’ recommendation’ as a first step at least; at this difficult juncture
for the Spanish property market generally, is quite baffling.
Cost estimates for obtaining the
certificate are varying significantly at the moment, as the market for this
relatively new service settles. For example, estimates we have seen for a small
flat have ranged (for an identical service) from 150€- 500€ plus IVA. Obviously
the type of property; size; age; and location will have a bearing on the cost.
Nevertheless, the Spanish legal
position is as it is. So, owners of Spanish properties who have a view to the
sale or rental of their property need to bear this requirement in mind; and
always to raise the issue with the estate agent/ representative prior to any
marketing campaign for sale or letting.
The other consequence of this new
law is that the issue of energy efficiency is going to be higher on the agenda
of buyers and tenants. So, Spanish property owners will need to consider more
carefully the cost/ benefit of energy saving property improvements during
ownership and in anticipation of sale/ letting. Energy inefficiency will
clearly place yet another potential bargaining chip in the hands of buyers and
Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 14:04:20
January 25th, 2013
This is often the first
question we are asked by clients who have been informed of a right to a Spanish
inheritance – but are leading a busy life elsewhere in the world. The short
answer is: ‘it is not necessary to be personally present in Spain, provided
that you have a reliable and trusted legal representative in Spain’.
We have agreed form
documentation for signature with Public Notaries throughout the UK and all 3
Spanish Consulate offices in the UK (and also with the Spanish Consulate
offices; and with public Notaries in numerous other countries), which enables
the legal procedures to be securely and professionally conducted in Spain on
behalf of our clients. This avoids the requirement for our clients to be
physically present in Spain.
This form of
representation also enables all other dealings with Spanish properties (eg.
sales and purchases) to be conducted for clients who are unable to be in Spain
for the duration of the transactional process.