Why Having a Digital Certificate in Spain Makes Your Life Much Easier

As public administrations increasingly move toward digital processes, having a Digital Certificate for Individuals has become essential for anyone who needs to interact with government authorities efficiently and securely.

In Spain, many administrative procedures are now carried out online as the standard method. A digital certificate allows you to complete these procedures remotely, saving time, avoiding unnecessary travel, and ensuring full legal validity for all your actions.

What is a Digital Certificate?

Think of it as your official online ID.

It confirms your identity when you access Spanish public administration websites and allows you to complete procedures securely and with full legal validity. In practical terms, it replaces many in-person visits to government offices.

Why it’s so useful in everyday life

In Spain, you’ll often need to interact with different public institutions. With a digital certificate, you can do most of this from your computer or mobile device.

For example, you can:

• Submit and manage tax declarations

• Access your Social Security information

• Download official certificates and documents

• Carry out procedures with the Traffic Authority (DGT)

• Communicate with your local Town Hall

• Receive and respond to official notifications

It saves time and avoids unnecessary hassle. 

One of the biggest advantages is convenience. Instead of booking appointments, waiting in queues, or visiting offices in person, you can complete most procedures in just a few minutes, wherever you are.

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Documents you can obtain instantly

Many official documents that previously required in-person requests are now available online, such as:

• Employment history reports

• Tax certificates

• Social Security records

• Municipal registration (“padrón”) certificates

What used to take days can often be resolved almost immediately.

Electronic signature with full legal validity

A digital certificate also allows you to sign documents electronically. These signatures are legally binding and accepted by all Spanish public administrations.

This makes it much easier to handle contracts, authorizations, and official paperwork without printing or scanning anything.

How to obtain a Digital Certificate

The most common way to obtain it is through the Fábrica Nacional de Moneda y Timbre. The process is simple but must be completed in a few steps:

    1. Online application

You start by applying on the FNMT website, entering your personal details. Once completed, you receive a code by email.

    2. Identity verification

Next, you must prove your identity in person at an authorized office. This can be done at the Tax Agency, Social Security offices, town halls, or other approved registration points. You will need your DNI/NIE and the application code.

    3. Download the certificate

After your identity has been verified, you can download the certificate from the same computer you used during the application process.

    4. Installation and use

Once installed, you can immediately start using it for online procedures with Spanish public administrations.

Secure and reliable

Although everything is done online, the system is highly secure. The digital certificate uses advanced encryption technology to protect your identity and personal data at all times.

Why it’s worth getting it sooner rather than later

Spain is moving steadily toward a fully digital administration. In many cases, online procedures are already the standard, and in some situations, they are the only option.

Having a digital certificate ensures you are prepared and can act quickly whenever you need to deal with any official matter.

We can help you with the process

At our office, we understand that the procedure to obtain a digital certificate can sometimes be confusing, especially if you are not familiar with the Spanish system or documentation requirements.

That’s why we advise and assist our clients throughout the entire process, ensuring everything is handled correctly from start to finish. We take care of the steps, guide you with the documentation, and make the process as smooth and straightforward as possible.

Final thoughts

A digital certificate is one of those tools that quickly becomes essential once you start using it. It saves time, reduces stress, and gives you direct access to a wide range of public services in Spain.

If you need assistance, our team is here to help you get it set up without complications.

Spain's Supreme Court knocks down national registry for tourist rentals. What is going to happen now?

The Spanish Supreme Court have given a decisive blow against the model of centralised control of the Holiday Homes in Spain.


The Court, in a recent judgment annuls the Decree creating Register of Short-Term Leases. The mean reason of the ruling is that the State lacks the competence to impose a national system that overlaps with existing regional registers.


This register affected owners of holiday rentals and short-term rentals, who, in order to carry out such activity, were required to register their properties in that Register, which depended on the Land Registry.

For many property owners and foreign investors, this judgment represents very good news, as it improves legal certainty and allows a significant reduction in the bureaucracy associated with real estate investment in Spain aimed at holiday rental activity. In cities such as Málaga, Marbella, Alicante, Valencia, Madrid or Barcelona, thousands of foreign buyers acquire apartments, villas and holiday homes each year with the aim of generating income through tourist or short-term rentals.


The judgment does not annul the decree in its entirety, but exclusively the precepts that frame the single registration itself, including the obligation to obtain a state registration number to advertise housing on platforms such as Airbnb o Booking. However, it is important to understand that holiday rentals remain regulated, and obligations do not disappear, but rather the entire regulatory burden falls back on the Autonomous Communities and local councils.

What are the practical effects of the Judgment?

The Judgment eliminates the central register and concludes that the State does not have sufficient powers to impose a mandatory national tourist register. The Supreme Court considers that competences in tourism and tourist housing mainly belong to the Autonomous Communities and not to the State.

Therefore, the key provisions of the NRA are annulled and the obligation to obtain a national number to rent short-term properties disappears. It is no longer necessary to register in the NRA in order to carry out holiday rental activity in Spain, and it is no longer necessary to obtain an NRA number.

This has also a consecuence; this number cannot be required in order to advertise a property on digital platforms such as Airbnb or Booking. In other words, these platforms will not require it, and it will be sufficient to provide the tourist licence number issued by the relevant Autonomous Community.

What must be done now to legally rent a tourist property in Spain?

The judgment obviously does not eliminate the regulation of tourist properties in Spain.  Owners and buyers must continue to comply with regional and local regulations, as well as pay the corresponding taxes in Spain on the income obtained from such activity. Even if you are a non-resident owner, holiday rental income is taxed in Spain through Non-Resident Income Tax (IRNR).

In Andalusia, it is still mandatory to obtain the VUT number if the property is urban, or VTAR if the property is rural, and it is compulsory to register the property in the Andalusian Tourism Register (RTA) in order to obtain such registration. This register is equivalent to the tourist licence of the property for holiday rental purposes in Andalusia.

Therefore, any foreign owner or buyer interested in investing in property to be used for holiday rental must continue to carry out a prior legal analysis before acquiring the property.

In order to register the property in the RTA, it must be verified that it meets the technical and legal requirements necessary to carry out holiday rental activity, such as: authorisation from the Community of Owners for such activity, First Occupancy Licence, minimum room sizes, etc.

What should I do if my property already has an NRA or is pending registration?

Since the NRA has been eliminated, nothing needs to be done. This means that whether your property is already registered, in the process of registration, or was not registered for any reason, with regard to the NRA, the owner does not need to take any action because that register no longer exists.

From now on, the owner may rent the property provided that it has the tourist licence from the Autonomous Community where it is located and complies with municipal regulations.

What should a buyer do if planning to invest in property for holiday rental?

It is essential to carry out legal due diligence before purchasing a tourist property in Spain, in order to avoid problems and reduce unnecessary risks. This real estate legal due diligence or legal report should include the requirements necessary for the property to be used for holiday rental, and whether the property to be acquired meets those requirements.

It should be taken into account that there are different legal requirements in order to carry out holiday rental activity, and that municipalities and cities may also impose limitations and restrictions on new rental properties. If the intended use of the property is holiday rental, it is important that this due diligence is carried out as soon as possible and, obviously, before the buyer signs the private purchase contract (PPC). 

The reservation or the PPC itself should include a clause protecting the buyer in case the activity is not feasible and the buyer wishes to withdraw from the purchase.

Legal advice from a lawyer specialised in real estate law, with proven experience and knowledge, is essential to ensure a safe process and to provide certainty regarding the possibility of using the property for holiday rental.

How does this judgment affect Airbnb and Booking?

Digital platforms remain obliged to cooperate with public authorities and verify certain legal requirements.

However, they will no longer be able to require registration of properties in the NRA, although they will still require the property registration number in the relevant regional tourism registry in order to advertise a property on their platforms.

We have been receiving these days may questions about their situation, particularly regarding the “VT,” “NRA,” or the new national registry.

We are currently advising to review each case to confirm which obligations currently apply under the applicable regional regulations.

So, do not doubt on contacting us if you want to study your situation.

Have you inherited or sold a house ? May be worth looking for a rebate of your plusvalía tax...

If you have inherited or sold a house in the last years, it might be worth investing some time on looking into your plusvalía tax. You may have a right to get it returned.

Spanish Law establishes that if you have inherited or sold you have to pay a tax called "municipal surplus value" for the profit obtained with the transmission. To do this, after each sale or acquisition the seller was given one month to produce a solicitude into the Town Hall where the home is located, which will issue you an invoice to pay the tax. To make it more complex, the Law also makes responsible the purchaser for the unpaid plusvalia invoices when the seller is non resident in Spain, so a very common practice is that the purchaser or the purchaser´s solicitors takes over the process on paying or making that solicitude with the local authority.  

In 2017, after a long serial of Court Cases within the administrative courts, the Spanish Constitutional Court established that this tax was unconstitutional in cases where there was no capital gain from the transmission. That is, in those cases that purchase price (or valuation of the estate, in inheritance) was the same or higher than the selling price. This bring along much more discussions and litigations with the local tax authorities.

 Just more recently, in October 2021, the Constitutional Court has established that the tax itself is illegal, not only when there is no gain, but in all cases. The Court considers that calculation system to obtain the amount payable does not guarantee respect for the fundamental principle of being based on the economic capacity of taxpayers. So, this has been something like an eartquake in the real estate law and municipal financial departments, even though the sentence sets that it will only would be considered null and void those bills that were not consented (appealed or discussed or not payed) at the time of the sentence being awarded. 

At the risk of leaving the Town Halls without a very significant source of income, on November 10th, 2021, the spanish government approved an urgent new regulation regulating the tax, under the form of a Decree. However, this new regulation has been appealed again before the Constitutional Court on the understanding that it has formal and material defects that make it unconstitutional.

In the event that this new appeal against the new regulations prospers, as it is quite likely to happen, those taxpayers who have filed an appeal or challenged the invoice or bills of plusvalía, will have a possibility that they have not to pay or to get a return of the amounts payed in. 

For all this reasons, we consider wise to study the situation of every deal that has been done in the last years and particularly, from October 2021 onwards. You may come with the surprise that you have a right to obtain a rebate. As well, if you are selling or inheriting a property, seems to us a good idea consider the possibility of lodging a claim against the plusvalía invoice just in case that the appeal becomes succesful, as it seems will happen.

We can certainly provide you with the best advise on how to do this. Do not hesitate to contact us and ask for further information. 

Javier Herrera Llamas 

 

 

Licence of First Occupation: Why it is important!

What is a Licence of First Occupation?

A Licence of First Occupation is also known as Habitation Licence or Certificate of Habitation, in Spanish Licencia de Primera Ocupación or Cédula de Habitabilidad.

The Licence of First Occupation (LFO) is an administrative licence which the town hall, where the property is located, grants and verifies the development is in full compliance with the Building Licence (BL) and all associated Planning laws…

A Licence of First Occupation is basically a document consisting of one or more pages issued by a town hall and addressed to the developer who applied for the licence which states that the Licence of First Occupation has been granted for the property or group of properties in the application…

A LFO only applies to new builds or off plan property, not to resale. A LFO is important as it draws the line between a new build being legally fit – or not – for human habitation. A lack of a LFO may imply serious underlying problems. You need a LFO to be connected to utility companies…

In theory, a First Occupancy Licence is required before you can live in a newly-built property, as a property is not legally recognised as fit for human habitation without one. That said, thousands of newly-built properties up and down the land are being lived in despite never having received an LFO.

In theory, you also need an LFO if you are going to rent out a property, both for holiday lettings to tourists, and for long-term rental contracts (more than 12 months). For landlords renting without an LFO could be an issue from an insurance perspective.

In many parts of Spain, Mijas included, there are quite a number of properties, for a variety of reasons, that do not have a Licence of First Occupation. There are also many property owners who are not aware that they do not have this licence. Many properties have been sold and resold without the Licence of First Occupation.

How is this possible?

Basically, if a Spanish mortgage is not required, then the non existence of this licence will not necessarily be noted. Not all lawyers stipulate the requirement of a Licence of First Occupation for completing a property purchase.

So, why do we consider the Licence of First Occupation to be an important document, when deciding whether to but a particular Spanish property or not? One word. Resale.

The non existence of a Licence of First Occupation may make resale more complicated.

Let me explain …

Although it is legal to complete a Spanish property purchase without a Licence of First Occupation, it has numerous legal and practical drawbacks which your lawyer can explain in more detail. Here are a few examples:

• You, or a any other potential future buyer, will not be able to take out a mortgage on the property or remortgage it.
• You will not necessarily be able to benefit from the official utility supplies. Changing accounts into your name will be complicated. Some lawyers are able to organise this for you but there is never a guarantee you will not have problems in the future.
• Any future prospective purchaser, or their lawyer, will haggle with you and only pay a lower purchase price if you lack a Licence of First Occupation. In a resale, the new purchasers will suffer the same problems to secure finance by means of a mortgage loan. Not having a Licence of First Occupation implies that you are actually reducing the base of potential purchasers for your resale.
• If there are planning issues at any stage, the Town Hall can set a charge against the property and you, as the new owner, may be held liable to pay the fine for the planning illegality.
• You cannot legally rent out a property without a Licence of First Occupation .

So there you have it. Some of the reasons why you really should ensure that any property you are purchasing in Spain has a Licence of First Occupation, whether you require a mortgage or not!

One last tip. If you are told that the Licence of First Occupation has been applied for, ask why it has not already been granted and ensure your lawyer looks into it for you. There is often a reason why it was not given in the first place. Do not leave anything to chance.

Javier Herrera

Residence Visa for retirees in Spain

If you’re considering making a new life for yourself in Spain, you may be eligible to ask for residence for retirees. 

 

Retirees or others who have the financial means to support themselves without working can apply for residence in Spain for non-lucrative purposes. 

To qualify, you must show that you have the means to support yourself and any dependents without working. The monthly minimum income is  aproximately €2,500 for an individual and €650  for each dependent. 

In addition, citizens of non-EU countries (including the U.S. and Canada) must show proof of private health insurance valid in Spain. Other requirements include a valid application form, a certificate of good conduct issued by the police in the city (or cities) where you’ve lived over the past five years, and a medical report, among other things.

You can submit all the required documents to your nearest Spanish embassy or consulate in person, and by previous appointment. 

Please note that the Spanish Embassy or consulate will evaluate if your profile is corresponding to somebody that is retiring in Spain. If they consider that you are going to develop an economical or commercial activity in Spain or out of Spain (selfemployed, business, etc), they probably will deny your solicitude.

Processing your application may take up to three months. After your application has been approved, you have one month to collect your entry visa from the consulate and then three months to enter Spain. Initial visas are for one year.

We can certainly help you on guiding through this process so that your solicitude does fullfill all the requirements set by the spanish authorities and you find no unpleasant surprises.

Javier Herrera Llamas

Non resident selling a property in Spain. What about Capital Gain Tax?

When a non-resident sells property in Spain, they buyer is obliged to retain 3% of the price and pay it to the tax authorities to cover the vendor’s tax liabilities. 

So, if you are non resident in Spain, be prepared to be withold an amount of 3% of the price of the sale. 

This tax is the vendor’s capital gains tax, which has to be declared in his or her annual income tax returns (known in Spain as La Renta), and is taxed at 19%. Non-residents used to be taxed on capital gains at 25% but this was reduced to 18% (same as residents) as of 01/01/08, then put up to 19% on 01/01/10, and finally raised to 21% in 2012 - 2014, and then reduced to 20% in 2015, and finally, 19% for 2016 up to day .

The reason for this is that the taxman wants the money in case the vendor does a runner without paying his taxes, something that almost all non-resident vendors have done in the past.

(Please note that this retention does not cover the vendor’s ‘plusvalia’ tax liability, which is paid to the town hall and is a separate matter. 

See here: http://javierherrerallamas.blogspot.com.es/2013/08/plusvalia-municipal-capital-gain-tax.html)

But not everything it is lost. There are somes ways to reduce your tax exposure. Mainly there are three different ways:

Reductions on when the property was purchased

Those who bought a property after the 31st of December of 1.994 will not be entitled to any reductions. 

Those who bought in 1.987 of after will enjoy of a reduction of 11.11% on the net gain for every year they have owned the property before the 31st of December 1996 after taking the first two years. This means that a seller starts benefiting from this reduction, his first 11.11%, if he bought in 1.994, 22.22% if he bought in 1.993 and so on. 

Those who bought before the 31st of December 1.986 will be pay not tax, as the cuttoff point is 1.996. 

Reductions on the inflationary movements

This reduction is obtained by applying a percentage to the l purchase price, raising the original price to the level of the value of the peseta today. This inflationary correction factor is applied to the entire purchase price, as well as to all costs surrounding the purchase. Likewise, improvements and extensions on the property will have to be updated inflation-wise.

The correction factor to be applied will be the following:

Reductions on the inherent costs of the purchase, works done on the property and others.

Costs of the purchase: these would include VAT or Transfer Tax, Plusvalía Tax (where paid by the buyer), Land registry and Notary fees, lawyer´s and real estate agent´s fees, where applicable. 

Extensions and improvements done on the property: These should not be confused with maintenance and conservation costs, as these are not deductible. In practice, there is no clear cut distinction between one and the other. 

Examples of not deductible costs are repair or maintenance works, such as painting, repairs on heating systems, lifts, plumbing and so on.

Examples of deductible costs are the installation of iron bars, doors, double glazing windows and similar improvements on the property.

It well may happen that your tax bill is lesser than the 3% withold. In that case, you can apply for refund. This could take sometime depending upon the tax office; some are quicker than others. In theory it shouldn’t take more than a few months, though some places seems to be taking up to 16 months. Around a year seems to be quite common. So, usually, your money returns to your bank account by a Bank transfer. 

But also could happen that vendor’s tax bill is greater than the 3% retention. In this case, even when it is very unusual, the Spanish taxman may try and come after you for it back home.

But if you don’t hear from them within 4 years you know you’re safe, as that is the legal deadline for the tax authorities to take action.

Javier Herrera Llamas

Why should you make an spanish will for your spanish estate

I can not recall how many times I have advised all adult persons to make a Will. But a thing worth saying is worth repeating. So, You really should make your Will

Tradicionally, our advice to all our clients was, if you have property in more than one Country, you should make a Will in every Country where you have assets. Seems to make sense, that if you have a few millions, or a few pounds, in England, Ireland or elsewhere, make an Will, then if you also have a villa in Spain, or a small sum in a Bank there, make a Spanish Will.

That way each jurisdiction can be getting on with the formalities of putting the terms of your Will into effect as soon as possible after you pass on, with no need for Spain to wait until the your national Probate Registry and Tax man have finished with your papers in your country.

The European Succession Regulation No.650/2012 (or “Brussels IV”) came into force last year, but England, Ireland or Denmark are still not signatories to it. This new regulation it is supposed to make things simpler for other citizens with property in the other Countries of Europe. Basically, you can now say in your national Will that it should dispose of all your Assets, both in England and Europe and that the Laws of Succession of your country should apply.

As an example, under the Laws of Succession of England, you can leave your belongings to whoever you choose in your Will. There is no requirement in England, as there is in other Countries [including Scotland even] that certain persons – usually spouse and /or children – should take a share of your estate as a matter of law. So if you are English, make your Will in England and elect English Succession law, then Brussels IV will tell the Spanish authorities that they must not seek to impose their own usual forced heirships upon your wishes.

Unfortunately, there will always be room for problems to arise. There are many legal issues arising from scenarios involving unusual combinations of place of residence, country of citizenship, and country of domicile, from which scope for long argument and expense can be identified.

The first thing you will need to prove to the spanish authority is that your Will was validly made in your country. He will not so much be impressed by the fact that the Will is stated to have been signed in the presence of two witnesses, as alarmed by the fact that it may not have any Notary stamp or certificate – They may also say;  “OOer, I’ve never dealt with this before. And the Will is in English. I can’t read English. And what is the Probate Registry of Leeds, Dublin, etc, and what are its powers?”

There are likely to be other areas of “mismatch” when seeking to persuade spanish authorities to   accept a Will made under a foreign jurisdiction as valid.

And some foreign requirements as to wills seem very sensible. In the Philippines, a blind person cannot make a valid Will unless “Article 808. If the testator is blind, the Will shall be read to him twice; once, by one of the subscribing witnesses, and again, by the notary public before whom the will is acknowledged” (Civil Code of the Philippines).


In Ireland, a blind person can make a Will but it cannot be admitted to Probate unless one of the witnesses gives a sworn statement about what took place. So again, problems can be envisaged in such a case where the Will maker has outlived his witnesses and no such sworn statement was made.

This could, at the end, lead our clients to follow a more expensive and time consuming procedure in order to register the property in Spain, than simply executing a properly laid out spanish will. So, our conclusion remains that new Law does create also new problems. So, it still remains simplier & cheaper for those who have estate in Spain dealing a separate will regulating separately only their spanish estate. 

Also, it is still advisable to revise your previous will to ensure that is adapted to the Brussels IV new regulation as we pointed out in our post before:

http://javierherrerallamas.blogspot.com.es/2014/12/have-look-at-your-spanish-will-before.html

So, for practical reasons, we keep on insisting on making spanish will to arrange the inheritance on spanish estate.  It will save time & money.

Javier Herrera Llamas

Off plan properties. The banks can held responsible for the moneys invested.

We have very often found the case of clients that, some time ago, have invested into an off plan property that was never built or delivered in time. 

It is not strange to find out that the developer went bankrupt sometime ago, leaving an empty plot, or in the best case, an unfinished property. When the financial crisis struck in 2008, many developers collapsed, leaving housing projects unfinished. Most new developments were sold off-plan.

 Property-buyers who had put down cash deposits were at the end of the list of creditors, and thousands lost their money.

Until recently, whenever we found this situation, we have been continuously advising that there was not a clear & effective legal solution to recover these moneys. 

This fortunately, has changed dramatically for the better. 

After a a Supreme Court ruling in Spain last year, for the last 14 month, The Spanish Courts have been continuously confirming that the bank where the moneys were deposited were legally bound to guarantee those funds to the purchasers. In case that the development did not get completed in time, or that the developer went bankrupt or alike.

Just as an example, Banco Popular, BBVA, Banco Mare Nostrum and Valencian Building Society S.G.R. have been ordered to pay over 2 million Euros plus interest, to 40 British investors.

The Courts are making clear that Off-plan property buyers in Spain have an “inalienable right” to have their off-plan deposit underwritten, rights that cannot be waived by banks who, having issued a collective insurance cover failed however to grant individual policies to buyers. This also includes “touristic apartments” as they are to be used by the owners as holiday homes, irrespective of their use as an investment for the most part of the year.

Banks have been ordered to pay the Courts the designated amounts, or face enforcement proceedings.

These decisions of the Courts have set a precedent that is fully applyable to similar cases with a very solid possibility of success.

We are consequently suggesting our clients to take another look at the matter, with views to obtain a compensation in Court for their investment. 

So, if you are in such a situation, please do not hesitate to contact us. We will be studying your case without compromise. Please note that there may be statuory limitations and deadlines applying to your case. So, do not leave it too long. 

Fortunately, sometimes, the Law changes for the better.

Our Fees

Abraham Lincoln once said that an "attorney's time is his stock in trade".


Our lawyers are retained to provide their time and apply their knowledge, advice, and thoughtful consideration to our clients solve their problems. An attorney's hourly fee should fairly reflect his level of skill and experience.


Initial Consultation

There is no lawyer without a client. The client goal is key to define success for the work of the Solicitor. We need to understand fully what are your needs, apart from the facts of the case, to be able to provide you with the best service.

We used to offer our first consultation free, but unfortunately, we are not doing it anymore. Other clients, that have already contracted our service, had to wait more time to see their matters being expeditively advancing because we were taking time to attend this free of charge consultation. 

Our first consultation meeting is estimated to be 1 hour billing time, so that we can meet you in person (or online) to review documents & your situation. We also require the fee being payed in advance, but we will discount this amount from any legal matter that we undertake, so we can certainly keep saying that is free (provided that you decide finally to be a client of ours). 

Please understand that some cases are more complex and will require more time. In those cases, we will tell you in advance an estimation of the fee that might be required.

Hourly Rates

This is our standard billing criteria. We will charge our clients for the time that an attorney, paralegal, or law clerk spends in the prosecution of his or her matter. Our hourly rates are 180€ professional solicitor and 90€ paralegal assistant, with increments of minimum six minutes (one-tenth of an hour), non vat included. We will gladly give you an estimate of the time expected for the case. We will also let you know when the time involved exceeds the estimation provided.


Services Offered For Fixed Fees

For conveyance cases, wills and straightforward inheritance work, we have flat fee rates available. The amount of the fee depends upon the conveyance value and the complexity of it. Whenever possible we will offer you a fixed fee for dealing with the whole of your case.

Please note that the fixed fee could be revised only if the nature of the work changes substantially, for example, if we discover title problems when dealing with the purchase of a property and you decide to continue with it asking us to resolve the problems before you purchase, in the case of an inheritance when new assets appear during the procedure which where no disclosed when the initial budget was prepared, etc. In any case, we will let you know in advance prior to compromise new fees. 

Correspondence service fee

It is a common policy after a conveyance to address all postal and electronic correspondence from our non resident clients to our personal address office. This correspondence usually include notifications from communities, utilities, townhall, tax authorities, etc… and the service entails us a labor cost and added time in classifying the relevant information and advising and informing our clients about it.

We are offering a six month free correspondence service to our clients after we deal a conveyance process for them.

After the six months period of free corresponding service, we are offering our clients to continue with this service for a monthly fee of 30 euros + VAT, that will be automatically deducted in your bank account if you do not give us difference instructions about it or alternative correspondence address of your preference to change them.

If you are already a client of us and we have been receiving your postal and electronic correspondence and notification in the past and now, please note that we will start charging your bank account for this service starting May 2016. Otherwise please let us know an address of your convenience to modify it.

Javier Herrera Llamas

Have your Bank been charging you more than they should for your mortgage?. Time to revenge its coming ...

From 2013 the spanish courts have been repeteadly considering null and void the mortgage floor clauses. You can see our note on our blog in 2013. This clauses were designed to protect banks from negative interest rates.

http://javierherrerallamas.blogspot.com.es/2013/10/mortgage-floor-interest-abolished-take.html

Last week a Spanish court ruled that the country's banks leaders can no longer sell mortgages with so-called floor clauses. All main banks are involved, including Caixabank, Barclays, Bankia, and Banco Santander. Caixabank and Bankia.

The court said banks had to repay customers what they had lost since May 2013, when Spain's Supreme Court declared these mortgages, whose rates cannot fall below a benchmark, were invalid if they had not been presented clearly. This means the ruling is only retrospective to May 2013.

This ruling by a local court in Madrid followed class action suits by customers alleging that banks had not properly explained the clauses to them, which prevented them from benefiting from the euro zone's record low interest rates.

Most of the estimated 4m mortgages affected were sold during the 1997-2007 property boom when buyers were paying top prices for their homes. When the bubble burst they were unable to benefit from falling interest rates.

It is estimated that those affected pay from €179 (Euribor +0.5%) to €213 (Euribor +1%) more on a €150,000 mortgage than they would if they didn’t have a fixed minimum rate mortgage.

As the recession set in and people were unable to meet their mortgage repayments, they were evicted in growing numbers, peaking at an average of 500 a day in 2012. Under Spanish law homeowners cannot claim bankruptcy over a mortgage as it is regarded as personal debt.

So even after the banks foreclose and repossess a property the former owner still has to pay off the mortgage, as well as associated legal charges.

Some Spanish banks  have already removed the mortgage floor . Since the third quarter of 2015, Caixabank has eliminated most of its mortgage floor clauses. Banco Sabadell, the fifth-largest in Spain which has so far refused to get rid of the clauses, said they would analyse the ruling and take a decision later.

Banks including Barclays and Santander face a €5bn (£4bn) bill after a Spanish court ruled that millions of fixed minimum rate mortgages were null and void because of the “lack of transparency” in the way they were sold during the property boom.

Last October the European Commission asked Spanish banks to remove the clauses and even repay customers over the whole life of the loan, beyond the May 2013 limit. The European court in Strasbourg is expected to rule on 26 April whether the banks’ liability should extend beyond that date. The European commission has already said it believes the payments should be backdated to the date the mortgage was signed, on the grounds that if a clause is declared null, it’s null from the beginning.

So, it is clearly time to press your bank to get some of your money back. 

Javier Herrera Llamas

New Andalusia Rental Law: Compliance and Fines

The regional Government of Andalusia, known as the Junta de Andalucía, has just passed a decree regulating tourist rentals in the region, following in the footsteps of other regions like Catalonia, the Balearics, and the Canaries. These new rules apply to any short term rental agreement which is habitually offered as accommodation at a price fixed by the owner and which is advertised through tourism channels, such as travel agencies or online platforms. According to the Junta de Andalucía, every property which is publicised on these portals and puts the owner in touch with travellers has to be registered as tourist accommodation -

This new regulation is arising a considerable amount of queries from our clients, so we have prepared these notes for general guidance:

1.-Is there a ban on short term rentals?

Many UK newspapers incorrectly reported that there was a ban on holiday rentals for property owned by private individuals. This is absolutely not true as the objective of these changes is not to protect the interests of the Hostelry Sector, but simply to set minimum quality standards that will make the whole tourism industry more competitive.

2.-Are long term rentals under this new regulation?

Not at all. The regulation exclude properties rented for more than two consecutive months by the same person, which would be governed by the normal property rental law. If the property is rented out property for weeks or fortnights during the three summer months, it is clearly under the new regulation. 

3.- What facilities does a property have to have?

It must have its first occupation licence. The bedrooms must have exterior ventilation and means of shutting out the light. There must be coolings and heating systems at least in the lounge and bedrooms. The regulations insist on domestic appliances, a first aid kit, information about the area in the form of leaflets, maps, etc, and a complaints book. the regulations also specify that the property must be cleaned when clients arrive and leave. Bed linen must be provided, along with a spare set. Tourists must also be given a contact telephone number in case any problems rise, and must be made aware of rules set by the community of owners. The maximum capacity for a single property may not exceed 15 people.

4.- How & when can a property be registered on the Registro de Turismo?

Registration will start officially on May, the 12th, 2016 (in three months’ time, after the decree was published in the Official Bulletin of the Junta de Andalucía (BOJA). The Junta’s Tourism Department estimates that the register will be operative in May, and recommends using this interim period to prepare the paperwork and the property: find or obtain the first occupation licence, download the form, get hold of leaflets, tourist maps, etc or install air conditioning. The aim is that by the summer, properties will officially be able to continue with their normal activity. You can always to ask registration in advance.

5.- What documentation has to be presented?

It is not a complex process, but this is one of the most common concerns among owners. Prior to the presentation you will be needing to obtain your NIE number, and the details corresponding to the registration of your property in the Catastro. You will have to present a statement, that has to be filled in and signed, and then presented into the corresponding office. The registration will then be processed so the property can be rented, and a code will be assigned to identify the property. That code must be included when advertising it on online platforms. You could also authorize somebody to do it on your behalf.

6. -What are the tax implications of a property which is rented for tourism?

It is treated as an urban rental, in other words the money obtained from rentals has to be declared as annual income. It is not necessary for an owner to register as self-employed, no separate taxes have to be paid and IVA does not have to be charged if the property is being rented out by the owner. This type of tourist accommodation is treated as a service, not an establishment. 

We strongly advise to use this new regulation as an opportunity to revise your fiscal situation regarding your Spanish assets, and if necessary, regularize whatever tax statements could be pending. 

7.- Do you have to give each tourist a contract, or a bill, or ask for their ID for police registration purposes?

The rules say that you have to give each client a contract, even if they are only staying for one night. Also, that written agreement must be kept for one year in case inspectors from the Tourism authorities want to see it. The document must include the name of the person or company that is renting the property, the registration code, the number of people who will be staying in the property, the dates they arrive and leave, the total cost of the stay and the contact phone number for them to ring in case of problems. The owner can only issue a receipt for payment, rather than an invoice, and the rental price can be freely determined by the owner of the property. For security reasons, the people who will be staying in the property should provide their identity document upon arrival, but it is not yet been known whether these details need to be passed on to the police. Hotels and apartments do so online, but this process is not covered by the Tourism authorities.

8.- What happens if you want to rent out three or more properties within a 1,000 metre radius?

This is the most controversial point about these new regulations, because it states that people who rent out three or more properties in the same building or in blocks within a radius of one kilometre must register as Apartamentos Turísticos and are governed by this different regulation, which has been modified for this purpose. It is more demanding because it insists on an opening licence and certain requirements which include minimum measurements in different rooms of the property. Also, properties that are considered to “apartamentos turísticos” are treated differently for tax purposes. According to the Junta, anybody who owns three or more properties has to register as self-employed, and will be taxed in the same way as those who are running a business.In this case, they will come under the section of ‘apartamentos turísticos’ as far as Hacienda, the Spanish tax agency, is concerned.

Anyhow, it must be also mentioned that the rules, under the title Decreto 28/2016, de 2 de febrero, de las viviendas con fines turísticos y de modificación del Decreto 194/2010, de 20 de abril, de establecimientos de apartamentos turísticos, has failed to elaborate on two important aspects: what does compliance really entail and what are the fines for non-compliance.

1. In respect to compliance, the rules obliges owners to offer clients –among other requirements- the following: license of occupancy, rooms with adequate ventilation and darkening devices (shutters or similar), sufficient furniture and necessary appliances, touristic information whether in hard copy or electronic, of data for the area (bus schedules, close-by parking facilities, medical facilities in the vicinity and a plan of the town), complaint form, first aid kit, bed linen, cutlery and crockery adequate to the size and requirements of the property (and a replacement set for each). As if not enough, the law says owners will have to have a telephone number available to tenants where they can call to resolve any incidences, an instruction manual for kitchen appliances, details of the use of communal facilities and property equipment, as well as details on access of pets to the property and information on potential restriction for smokers and a few other requirements.But whilst some of the above are clear, the meaning of ambiguous words such as “adequate”, “sufficient” and “necessary” can widely differ depending on who you ask. Attending these grey areas is a pressing requirement.
2. The fine system is also not clear. The 2016 Act refers to a 2011 Rural Accommodation Act for elucidation of what fines are applicable. Some scaremongers have enjoyed spreading the belief that if you do not register, you will be fined up to 150,000 Euros. The reality is that failing to register their properties can “only” be fined between 2,000 and 18,000 Euros, the heavier monster fine of “up to 150k” being reserved for other contraventions i.e. unlawful discrimination or obstructing inspectors on duty.

Interestingly, the Act does not address the fines for failing to comply with one or more elements within the the long list on point a), for instance: missing spoons, dirty linen or insufficient first aid kit.

Previous experiences in other Spanish regions, where similar rules apply, shows us that lack of registration is attracting the vast majority of fines, with little or no precedent in respect to the degree or correctness of compliance.

So, if you are planning to rent out your property in a short term basis in the next future, we strongly suggest that you arrange in advance your registration. Also, should be wise to use this opportunity to check that you are fullfiling all fiscal regulations for your property in Spain. 

Javier Herrera Llamas

Have a look at your spanish will !!!! (Before August 2015)

If you live in spain and do not state on your will that you wish english law to rule your inheritance, your estate will go to your children and not your spouse.

Certainly, is now essential that people retired in a country different of their country of nationality within the European Union revise their wills. What is all this fuss about? An European Regulation (eu) 650/2012 will come soon into force and have important consecuences on how your will is going to be construed by the Spanish Authorities. 

We recommend you ask your solicitor about how it may affect your inheritance in case you need to make changes to your wills. Changes must be in place before 17th of august of 2015, the sooner the better.

Particularly. English citizens need to look at their will because of this new Regulation of the EU establishes that:

1. When a person dies resident in one country of the European Union but national of another, the law applicable to his/her inheritance will be the one that he/she has established expressly in his will and not the one established by the International Norms of each country (which may be in conflict). 

This is good news because an English national living in Spain can establish that he/she wishes English Law to rule his/her inheritance and this will avoid any possible risk of claims from children against the spouse on the basis of the system of obligatory heirs established in Spanish law, which has always caused worry and concern in the case of children from previous marriages etc.

2. If a person passes away after the 17th of August of 2015, unless he has said differently in his will (as explained above), the legislation applicable to his inheritance will be that of his country of last residence . This is very important for English people living in Spain, because under Spanish law you cannot leave everything to your wife as 2/3 of the estate have to be left to children. In other words if you are resident of Spain, have children and do not establish on your will that you wish English Law (your national law ) to rule your inheritance your Spouse will not be allowed to receive his/her full inheritance as it would contradict the Spanish rules of obligatory heirs which would be applicable automatically because of the new regulation.

Consequences:

1. If you have children but have made a will leaving all assets to your spouse, make sure that you have clearly stated on your will that you wish your national law (English law) to rule your inheritance. If you have not, you need to speak to a solicitor about this new European directive and add this statement to your will.

2. If you are married and you have been concerned with possible claims by your spouses children against your estate this risk can be completely removed by your spouse stating on her/his will that it should be English law that rules the inheritance.

Conclusion:

The new regulation has given much more strength to the testators /testatrix, letting them choose between English or Spanish Law, which is good, but precaution is a must because under the new regulation if nothing is said and you are a resident in Spain automatically the law applicable will be Spanish law which does not permit that spouses leave everything to each other if there are children.

To avoid nasty surprises visit your solicitor and ask if you need to change the wording of your will due to the new Regulation of the EU. 650/2012.

Javier Herrera Llamas

No more Offshore Companies holding spanish Assets !!!

For some time now I have been advising on the dangers of owning assets in Spain through an offshore company.


Over the last twenty years many thousands of foreign investors have channelled their property investments in Spain directly or indirectly through offshore companies. This has enabled many individuals to avoid the payment of many Spanish taxes such as capital gains tax and inheritance and gift tax.

From 2007 these tax avoidance measures came to an end and owning assets in Spain through an offshore structure could have no commercial or fiscal benefit. Continuing to hold assets in an offshore structure could now increase exposure to taxation.

From there onwards, the offshore company must pay annually a tax consisting of 3% on the Value of the Property for Rates Purposes (Valor Catastral). The Valor Catastral has no resemblance with the real value of the property and normally does not exceed 50% of this.

Just very receinlty Tax Authorities are now considering that the transfer of the capital shares of the company is taxable under transfer tax, and this will be based on the market value of the real estate, regardless of the property price declared or the shares face value.

In line with the rest of Europe, the Spanish authorities have been continously (and will be) trying to introduce legislation that will lessen the amount of tax evasion and money laundering that is perceived to be enjoyed by entities located in offshore tax centres. The tax office does not want to leave any stone unturned in its quest to eradicate all investments channelled through tax haven countries.

The main thrust of the legislation is aimed at forcing such companies to demonstrate beyond reasonable doubt that their underlying activities are truly carried out in their respective offshore centre, and that these are indeed normal business activities.

Finally, if all this was not enough, there has been also cases for chriminal prosecution against the lawyer, the ultimate beneficiary and the director of the offshore companies, by which were all sentenced to jail terms.

So we can really say that the times offhsore companies were easily used to avoid the taxation on spanish assets are gone. Now, this requires a much more careful approach.

Javier Herrera Llamas

Christmas in the Air

Christmas is feeling in the air....


Even at the Courts now you can hear singing and, from time to time, a bit of "Christmas turmoil"

So, also your Lawyers wish you a very Merry Christmas and properous 2014.

Even from the Court ...

Javier Herrera Llamas

Nie Frequently Asked Questions

The spanish NIE has provided quite a lot of unpleasent last minute surprises, since is compulsory to show it on any important act made in Spain. 

You will find here the most frequently asked questions, so you save yourself a few  problems:

What is a NIE?

An NIE Number is a tax identification number to be used in Spain. Prior to purchasing a property, selling a property, obtaining a mortgage, starting up a business or working in Spain, it is a requirement by law that every individual possess an NIE Number. The application process is laborious and time consuming, and without the use of a service such as ours, would require normally two trips to Spain, and over 10 hours of waiting in queues, along with the filling out of complex application forms.

The actual NIE Number, when produced from a National Police Station in Spain is printed out on a piece of paper, and this sheet of paper is often used as a form of identity. Once you have been issued an NIE number, it is yours for life.

Everywhere on the internet it says that you have to apply in person for your NIE Number? Is this true?

Yes, this is certainly the case. Without question the Spanish law states very clearly that the person must apply for the documents in person. However, the Spanish law also clearly states that a legalised, Spanish power-of-attorney document enables any individual to be represented by another for all legal purposes in Spain (as long as it is declared as such within the power-of-attorney). Therefore through virtue of these combined laws, we are able to apply for a NIE number on your behalf without the need for you to be in Spain.

You should also note that, regardless of the clearly stated laws, many local branches of the national police throughout Spain choose not to allow this, which is why some lawyers are unable to act on your behalf for this purpose.

How long does the procedure take?

Once we have received your documents (POA and copies of passports - both legalised) the NIE number is obtained within 10 business days (which equates to normally 2 weeks, exceptions made for public and bank holidays).

Prior to sending the documents to us, they must be notarised (by a Notary Public in your area) and then stamped with the Hague Apostille. 

Do I need to send photos for my NIE number card?

No you do not need to send photos to apply for the NIE number.

The NIE number is in fact not a card at all. Rather it is a sheet of A4 paper bearing your details (as outlined on your passport) as well as an official stamp from the National Police of Spain. This original document is an extremely important item of identification in Spain, even though it does not include any photo. Your passport and/or eventually your residence card used in conjunction with your NIE number is generally sufficient for most functions to do with government & taxation in Spain(such as purchasing a property in Spain, paying taxes, selling a property in Spain, etc.).

What happens if I have lost my NIE Number?

Applying for a duplicate NIE number is the same process as applying for the first time. One thing to watch out for however, albeit most of the time this goes without saying, is that the same details are put on the second application form as the first because if not, they police will have problems in issuing the same number if they cannot prove 100% that it is the same person.

I am an EU Citizen, what documentation do you need from me?

As an EU citizen, in order to obtain an NIE Number on your behalf, we will require only a notarised, legalised power of attorney document and a notarised, legalised copy of your passport. There is nothing further required.

I am an NON-EU Citizen, what documentation do you need from me?

As a non-EU citizen, in order to obtain an NIE Number on your behalf, we will require a notarised, legalised power of attorney document, a notarised, legalised copy of your full passport, a full copy of your passport (all pages - email or fax is fine for this purpose), documented evidence (or proof of) why you require an NIE Number. In the case of a property purchase, a private purchase contract, a letter from a mortgage company, or similar type of document will suffice. 

I've been told I can apply for my NIE card through the Spanish consulate. Is this true? If yes, what benefits does your service offer over applying through a Spanish consulate?

Yes, this is entirely true. The primary benefit of using our service as opposed to applying through a Spanish consulate is speed. The average time required for an individual to obtain their NIE number via applying through a Spanish consulate is 16 weeks. This varies from one country to the next, we encourage people to contact their closest Spanish consulate first and enquire about their turnaround time.

Can I get a temporary NIE number at the consulate to sign the deeds of my property?

This is not possible. The NIE that you are issued initially is the same NIE for the rest of your life. Even if you lose the document and apply for a new one, the same number will be issued to you again. Therefore there is no such thing as a temporary NIE.

If you need the NIE for signing title deeds in Spain, as soon as we have submitted the application, we can send a stamped copy to the sellers, mortgage broker, lawyer or whomever is demanding the NIE as proof that the NIE is on the way. This usually pacifies the situation until the document is issued.

Javier Herrera Llamas