Property Guides and Information for the Costa del Sol, Spain

Education and Schooling in Spain

Quality education is available in Spain with a wide selection of both private and state schools.

Enrolment

Ideally you should travel to Spain prior to moving, to investigate the different educational possibilities. If your child will be going to a state school you will need to be registered at the local Town Hall and bring in a copy of this registration, a copy of your child's proof of immunisation, their transcripts from school, and a parent's passport along with your child's passport. As in British state schools, the catchment area is all-important, so having decided on your chosen school it is essential to ensure that your house (whether purchased or rented) is located in the correct area. Most schools prefer to interview prospective pupils, with exams being set in some cases to ascertain the level of Spanish attained.

International Schools

/ Private Schools

Privately run schools come tailored to suit the needs of foreign. Many are bi-lingual and offer a curriculum parallel to that offered in the UK . Generally speaking, these schools tend to have a higher teacher to student ratio.

State Schools

If you are considering Spanish state run schools, contact the Town hall in the area where you are planning to move. On the other hand, total immersion in the Spanish culture has its benefits. Children integrate into the Spanish culture quickly and they are state subsidised and provide a quality education.

Qualifications

The Spanish system of education is divided into three stages: ESO (Compulsory Secondary Education), BUP (the equivalent of British GCSEs) and COU (the Spanish version of the A level course). In addition, university applicants must complete the Selectividad, an entrance exam.

Further Information

If you are interested in your child following the British curriculum and seek advice about British schools in Spain, contact the British Council (Paseo Martinez Campos, 31, 28/010 Madrid , Tel: 91 337 35 00).

ALOHA COLLEGE
Located in Nueva Andalucia, a mile or two west of Marbella town, an up-market residential area.
Tel.: 952 81 27 29
Fax: 952 81 27 29
http://www.aloha-college.com/en/index.php

CALPE COLLEGE
Calpe College was established in January 1973 as a one-classroom school. Since then it has expanded into a junior and a senior school, which cover two separate sites in San Pedro, making it one of the longest established schools on the Costa del Sol.
Tel.: 952 78 14 79
Fax: 952 78 94 16

BENALMADENA INTERNATIONAL COLLEGE
Situated in Nueva Torrequebrada. Co-ed opened in 1997 and offers international education from 3 years to 17. Provides special needs education.
Tel.: 952 56 16 66
www.bicbenal.com

COLEGIO LAS CHAPAS
This is a mixed first-grade school, and then the boys move to Ecos in Elviria. Girls continue to university level. Classes are in Spanish, but it has a first-class reputation, and many foreign students attend.
Tel.: 952 83 16 16
Fax: 952 83 59 13
Email: chapas@cece.es
www.attendis.com

SWANS COLLEGE
In Marbella Town, with an excellent reputation.
Tel.: 952 77 32 48
Fax: 952 77 64 31
Email: swans@swansschool.net
www.swansschool.net

ST. ANTHONYS COLLEGE
This has been established for over 20 years, an is situated in Fuengirola.
Tel.: 952 47 31 66,
Fax: 952 46 20 21
www.stanthonyscollege.com

SUNNY VIEW SCHOOL
One of the first International Schools on the coast, located in the foothills of Torremolinos.
Tel.: 952 38 95 81,
Fax: 952 37 26 95
www.nabss.org/sunny.htm

THE ENGLISH INTERNATIONAL COLLEGE
Situated a few miles East of Marbella town. Very popular with the British residents, and ideal for those living in the Mijas-Costa/East of Marbella town area.
Tel.: 952 83 10 58
Fax: 952 83 89 92
www.eic.edu

THE SOTOGRANDE INTERNATIONAL SCHOOL
Located in Sotogrande, which is the Gibraltar end of the coast.
Tel.: 956 79 59 02,
Fax: 956 79 48 16
www.sis.ac

INTERNATIONAL SCHOOL OF MALAGA
A new school, situated in Benalmadena, halfway between Torremolinos and Fuengirola, near to the railway station. British and Spanish curricula, leading to Cambridge Universitys IGCEs and A-Levels. Qualified British and Spanish teachers, sports facilities, music, theatre, computer studies and a wide range of extra curricular activities, this school offers a bi-lingual education enabling students to gain qualifications from both the British and Spanish examinations systems.
Tel.: 952 29 01 49
Email: info@interschoolmalaga.com
www.interschoolmalaga.com

April 24, 2006 | Permalink

Banking in Spain

To open either a savings or a current account with any bank in Spain you will need either your passport or your residencia. There is very little form-filling, and most of this is done by the manager or a member of staff at the bank. Having a Spanish bank account is very convenient as many of your household bills can be direct debited from it. Nearly all banks offer debit and credit cards which allow you to shop and pay directly from your account and most also supply internet banking, allowing you 24hour access to your money.

Choosing you bank

Although the major national banks have branches in all cities and most towns, each region of Spain has its own banks with branches in almost every town within that region. There are two types of banks in Spain: savings banks and regular banks. Savings banks do not have shareholders and invest in social and cultural projects. There is a nationwide network of savings banks recognizable by the sign saying Caja de ahorros.

The younger Spanish banks such as CAM or Cajamar tend to be more aggressive in giving out mortgages, so keep this in mind if you are looking to finance your property. If you are looking to set up an account try and pick a bank that offers a number of branches in the areas you are interested in buying in. Statistics say that you are more likely to get divorced than change bank accounts once they are set up, so having your branch on your door step will be convenient. Established or city branches tend to get very busy particularly at bill paying or tax declaration times during the year. Bear this in mind when choosing your branch as you can sometimes be left queing for hours.

Direct debits

Setting up a direct debit to pay monthly or yearly bills in Spain is an easy process. There is usually no contract required for payment for property taxes and running costs, or for water, electricity and telephone bills. All you need to provide is your bank’s name and sort code, and from that date forward you are directly debited for these services. This process also occurs with other regular payments such as your satellite television service. To stop a direct debit visit your branch and tell them you wish to cancel. You should also write to the company concerned.

Internet Banking

Most Banks offer this service, but you will need to request the setup and authorization on your account. You will then be given an activation key card that will allow you sign in and transact.

Debit Card

You can order you debit or credit card at your branch. The cards will take about ten days to arrive. When you pick it up you will be given your PIN number. Your debit card gives you access to all ATMs in Spain. Bank charges for this service vary depending on the bank you are with and the ATM you withdraw money from. Keep an eye on this as these small commissions can mount up. Ask your branch which other banks offer the cheapest or free service for with drawls.

Changing Banks

Ask your bank manager to give you a print out of all your direct debits and give this list to your new bank of choice. You simply open a new account and add your direct debits, then close your old account.

April 24, 2006 | Permalink

Applying for your Residency Permit

Applications for residencia are made at your local police station. If you are from an EU member state and you want to live and work in Spain you can apply for your residencia on a Solicitud de autorización de residencia y de autorización de trabajo y residencia. You must provide the following during your application:

• Original completed and signed application and photocopy,
• 4 passport photos,
• NIE form,
  
• Passport and photocopy (with a validity of at least six months),
• Proof of address whether title deeds to your property or rental contract,
• If applicable, work contract (must be for a minimum of 6 months), plus a photocopy,
• Medical form 121, your Spanish medical registration card, or a copy of a private health insurance policy,
• Proof of income: A certified letter issued by a Spanish bank documenting the regularity of income. This must be accompanied by form 790, which is also available at the police station. Pensioners also need to provide a Certificado Bancario to prove the amount of their pension and the regularity of payments,
• An original copy of the Certificado de Empadronamiento, obtainable from your local Town Hall,
• A certified copy of your penales, your criminal record. This can be a statement requested through your local police authorities,
• Certified documents attesting to your marital status,
• Fees, which must be paid via a bank (you will be given a paying-in slip).

Applying for residency can be a headache. Gestores or accountants who specialise in liasing with the Spanish authorities on your behalf can really help take out the hassle of applying for your permit.

April 24, 2006 | Permalink

Health Care in Spain

Public health care in Spain is freely avaialble and there are also excellent provisions for private medical insurance as well. If you are intersted in moving to Spain read this report and find out what provisions best suit you.

Public Health Care

You can qualify for free health care in Spain if you or your employer pays your Social Security contributions. Social Security contributions will only cover 75% of the cost of most treatments received and you will therefore be required to either pay the remainder. If you are a tourist or non-resident, a registered Form E-111 is sufficient for most emergency health situations in Spain. For more information on Social Security, contact Instituto Nacional de la Seguridad Social, Subdirección General de Relaciones Internacionales on 915 647 681

Private Health Care

Sanitas is one of Spain’s largest private medical insurers, many expats sign up to this comprehensive service that covers a wide range of treatments. Rates vary with types of cover and age but are generally much cheaper than the private medical insurance in most northern European countries. To contact Sanitas call 902 102 400 there are English speaking operators to help with your enquiries.

Helicopteros Sanitarios are another private health care service but specialise in primary response cover. If you are in need of a doctor on call their 24 hour ambulance service is extremely good and quite reasonably priced. To contact Helicopteros Sanitarios call 952 816 767.

April 24, 2006 | Permalink

Contracting your Utilities

Your lawyer will normally contract your utilities on your behalf for a small fee, however if you want to set this up yourself then read below.

Electricity

You will have to buy your electricity from Endesa, they can be contacted online at http://www.endesaonline.com or by calling 900 848 384. Bills are paid bimonthly; they come in Spanish and can be paid either by direct debit or at the bank. Note that many banks will only allow you to pay between 8.30 and 10.30 am. Your tariff is worked out according to your power rating (potencia), i.e. the amount of electricity that you elect to buy from your supplier in advance. You pay a standing charge in advance and consumption charges in arrears. Note that IVA of 16% and electricity tax (Impuesto Electricidad) of 4.8% apply.

Gas

Most households use gas bottles (bombonas) supplied by Repsol Butano. You will need to sign a contract with them, which is only issued after a safety inspection has been conducted. A further inspection is required of all appliances every five years. Bottles can be delivered, but it is cheaper to buy direct from the depot. You can call your local distributor and request delivery:

Marbella and Ojén 952 775 795

Coin   902 222 112

Estepona 952 802 634

Call 901 100 100 to get your local delivery number and call 901 121 212 immediately if you suspect a leak.

Water

To connect simply contact your local Town Hall to find who provides the water in your area. In the Marbella area the provider is Acosol Tel. 952 773 189 . To open a new contract you will need your passport or residencia , and the previous contract/bills. Bills are paid quarterly and the supply is metered.

Telephone

To get connected simply dial Telefónica on 1004 from any mobile or landline. Telefónica have an English speaking department to assist with connection, ADSL, bill queries, direct debits and payments etc. You can take advantage of cheaper calls from other providers using a 4-digit prefix (you will have to remain contracted Telefónica). For a breakdown of the different tariffs on offer, have a look at:

Aló, BT Ignite, Jazztel, Ruta 10, Tele2, Uni2

April 24, 2006 | Permalink

Registering at your Local Town Hall for your Enpadronamiento

Registering allows you to send your children to local schools, apply for your residencia and many other important things. To register all you have to do is go to your local Town Hall and ask to empadronarse, fill out the form with your name, place of birth, parents' names, age, address, marital status, and studies along with a copy of your passport. You may also need a copy of a utility bill, gas, electricity, water or telephone bill. Here is a list of contact numbers for the town halls along the Costa del Sol:

April 24, 2006 | Permalink

Applying for your NIE Number

As a foreigner in Spain you will need an NIE number (Numero deI identificacion de Extranjero ). This identification number is used to track your financial and official activities in Spain. The NIE always starts with "X" and is followed by seven numbers and a letter. NIE Numbers are needed to:

• Apply for a business permit
• Apply for a driving license in Spain or for an international
       license
• Apply for a mortgage or other type of loan.
• Buy or sell property
• Buy a vehicle
• Employment
• Inheritance of assets in Spain
• Insure Property
• Open a bank account
• Pay taxes
• Sign onto the national Social Security service

Obtaining a NIE number is quite easy and should be a priority upon arrival. You can pay a local gestor to apply for it on your behalf, however you will need to give the gestor power of attorney if you are not present at the time of application.

How to apply for your NIE

You apply for your NIE at your local National Police Station in the Departmento de Extranjeros (Foreigners Department). Ask for an NIE application form. The following documents must be submitted to the police station to obtain a NIE number:

1. Completed and signed original NIE application form and a photocopy      copy
2. Passport and photocopy
3. Address in Spain

The process takes four to six weeks, the document is an officially stamped, A4 sized paper bearing your name, date of birth and your NIE number. Keep this document in a safe place as different bureaucratic processes require the original document.

April 24, 2006 | Permalink

NIE Application Form

Download form

April 23, 2006 | Permalink

Residencia Application Form (Sample)

Download form

April 23, 2006 | Permalink

Form E111 - Medical Cover to EU Residents of EU Member States

Download form

April 23, 2006 | Permalink

The Spanish System of Capital Gains Tax

When you sell a property in Spain you will be liable to pay capital gains tax on the profit you make. This article will demonstrate how the tax is currently calculated for residents and non-residents as well as discuss some of the proposed changes to the system that are due in 2007.

Calculating the tax

The profit on a property transaction is the difference between the purchase value and the sale value.

Purchase value

Is assessed by totaling the purchase price plus the amount of expenses and taxes paid when you originally purchased the property. Typically this figure is established by taking the price on the title deed and adding: IVA or Transfer Taxes, plus valia (if applicable), notary fees and land registry costs. This total value is then multiplied by an inflation correction factor corresponding to the year of purchase (established annually by the Spanish budget).

Sale value

Is assessed by totaling the declared sale price minus the amount of the expenses and taxes you pay to sell the property. Typically this figure is established by taking price on the title deed and deducting: the real estate commission, lawyers fees, plus valia and notary and registry fees (if applicable).

The difference between the ‘purchase value’ from the ‘sales value’ equals the profit; this final figure is what you will pay capital gains tax on.

Current tax rate for residents and non-residents

As a resident you will pay your capital gains tax as part of their income tax declaration in May or June of each year. The official rate of the tax for the profit made on selling your property is 15%. As a non-resident you currently pay a flat rate of 35%.

Capital gains tax scenario for non-residents

If you are a non-resident the person who purchases the property from you is obliged to withhold 5% of the sales value and pay this amount directly to the Spanish tax office (Hacienda). The payment is considered as an advance on pending your capital gains tax bill. The purchaser (or his lawyer) must send a copy of Form 211 (the withholding order) to you so that you can deduct this from the amount you have to pay. The notary will demand see a paid up Form 211 at the signing of the deeds, to ensure the tax is collected. You must then file a Form 212 within 30 days and pay the rest of the tax. If the 5% deduction exceeds the tax due then you may request a refund.

Capital gains scenario

You bought your resale apartment property in 1995 for 90,000€ and paid the following costs:

1. Transfer tax @ 6% = 5400
2. Notary @ 1% = 900
3. Lawyers fees 1% = 900
4. Sub Total = 8200

Your total cost or Purchase Value = 98,200€

You then apply the inflation coefficient for the year 1995 at 1.2350 to bring the amount you paid to today’s value of 121,277€.

You sell the property today at the declared price of 330,000 €

You reduce the selling price by justified expenses

1. Plus valia @ 1,000€ (aprox.)
2. Estate agents commission @ 15,000€
3. Lawyers fees @ 3,000€
4. Sub Total = 19,000€

Your total cost or Sale Value = 311,000€

Sale Value (311,000€) – Purchase Value (121,277€) = Profit (189,723€)

Resident tax payment

Currently as a resident with a modest income your rate at 15% would be 28,458€.

Total profit after tax = 161,264€

Non resident tax payment

Currently as a non resident your overall capital gains tax would be 66,403€ but there would be an immediate 5% retention by the buyer’s lawyer or 16,500€. You would still be liable for remaining 49,903€ within one month of the sale.

Total profit after tax = 123,319€

You have no special deductions for owning the property longer

Minimising capital gains

Here are some of the things you can do to minimise the impact of capital gains tax.

Become a Spanish resident one year prior to sale

There are quite a few advantages to becoming a resident in Spain both in terms of owning and selling property. Anyone thinking about reselling should seriously consider this option for the following reasons (read article: The Benefits of Becoming a Resident in Spain)

If you are resident and more than 65 years of age, and you have lived in your home for three years, you will not be subject to Spanish capital gains tax when you sell it, no matter how great your profit.

If you are a resident, your minimum capital gains tax liability is 15% and you also avoid the hassle of paying the withholding tax mentioned above. Also if the property is your principal residence and you have owned it for a minimum of three years you can claim part or all of the tax back if you buy another principal residence within two years.

Using a company structure

Using a Spanish company to own a property is discussed in the chapter ‘Owning a Spanish Property through a Company Structure’ and is open to both residents and non-residents. Recent changes in legislation have closed many of the tax loop holes that used to avoid capital gains tax.

Special exemptions

There are certain exemptions that are currently available to you if you have owned your property in Spain for a long time:

• If you bought your property prior to December 31 1986 you will not have to pay capital gains.
• If you bought your property prior December 31st 1994, the taxable amount will be reduced by 11.11% annually for each year of ownership prior to this date.

Spanish tax law updates

There are some important updates to Spanish capital gains tax that are currently being discussed in the Spanish parliament. If this new legislature is implemented the new laws will take effect from the 1^st of January 2007. The proposed changes are as follows:

Non-residents who own property in Spain

• Capital gains tax will be lowered to 18%.
• Withholding taxes on the sale of property will be reduced to 3%
• There will be no withholding tax on properties bought before 1986.
• The 11.11% per annum tax break for properties owned prior to 1994 will continue to apply until 20^th of January 2006.

Residents

• Capital gains tax will be raised to 18%.

In view of the importance of the proposed changes and in an effort to keep you up to date we will update this chapter with the approved final draft legislation. To get an insight into the taxes you will pay when you sell your property use this calculator

April 21, 2006 | Permalink

The Toolbox: Tips for Offering your Property for Sale

Here is a summary of some of the more important points that we feel will help you establish the best stratedgy to help you sell your proper ty:

1. Consider placing a "For Sale" sign by your main agent. This always results in increased client enquiries.
2. Assemble your paper work and have it to hand while selling your property, as it makes for a far more professional presentation. It will also ensure that you have prepared for any debt or liens that may be registered against the property with or without your knowledge. So prepare the following for any interested buyer:
   • Nota Simple,
   • Copy of the Escritura Publica,
   • IBI receipts,
   • Community Statutes,
   • Community bills and receipts,
   • Valor catastral,
   • The property running costs,
3. Fix any small repairs that need doing, or repaint to enhance the look of the property to eliminate objection factors.
4. While using an agent to establish the correct asking price for your property, make sure that you ask him to explain exactly why he thinks it is worth that amount so that you understand what the market is doing in your area.
5. Make an inventory of the items that are included in the sale of the property right at the beginning and give this inventory to your agent. This will avoid upset and confusion at later stages of the negotiation.
6. If you are away from Spain you can leave a power of attorney with your lawyer enabling him to sign a private contract according to your written instructions. You can negotiate the details of the sale with your agent by telephone and fax, and the power of attorney allows your lawyer to sign the purchase contract, without delay.
7. Make sure that you are fully aware of your tax obligations when you put your property on the market. Meet with your lawyer and tax advisor, and find out the options available to you to save money, following this inform your agent correctly so that he can negotiate these factors on your behalf.
8. If you have no experience in selling property, let your agent handle the negotiation, after all his lack of emotional attachment to the property and experience are in your favour. Ensure that you provide him with precise instructions and if necessary put him in contact with your lawyer and tax advisor so he is fully informed on all aspects of your selling strategy. Once the terms have been agreed and confirmed, your lawyer should take the lead role (in co-ordination with your agent) and draft the sales contract and supervise the eventual completion of the sale.
9. It is extremely important to clarify all of the details of the sale from the outset before you instruct your lawyer, avoid trying to negotiate on a piece meal basis wherever possible. Ensure that you have set the price, fiscal considerations, target contract date, deposit, completion date, precise details of what is included in the sale in the way of fixtures, fittings and furniture, who pays the municipal plus valía, etc and that your agent is aware of your requirements and has been properly informed.

April 21, 2006 | Permalink

The Seller’s Guide to Spanish Property

Selling your property is all about your strategy and network of contacts, depending on what you choose greatly affects the length of time it takes to sell, and the potential returns you could make.

Establishing your price

The right asking price is the most important factor in selling your property. If your price is too high people will not even bother to view it and it will not sell, conversely if your price is too low you will be giving away part of your assets. Having access to the right market research and experience are essential factors in establishing the correct sales price and this is where an experienced estate agent will help.

When you use an agency you will pay a commission, but the benefits of greater market exposure outweigh the cost. Commissions in a resort area such as Marbella are high because the market for Costa del Sol property is spread out all over Europe and the rest of the world. It’s an expensive process to market property at this level, furthermore, a good agent will have to network your property with other colleagues locally and internationally and share the commission to ensure the best level of exposure and viewings. Agents in Spain accompany the clients on viewings and spend tremendous amounts of time preparing the correct portfolio and matching the right client with the right vendor: so it’s worth forming a team with your agent as their networking is essential to ensure proper market exposure.

When offering your property through an agency it is important that you offer a gross price inclusive of commission and a small negotiation factor. It is more than likely that a potential buyer will want to haggle, so it’s important to have a margin prepared. Furthermore, offering your property at different prices through several agencies is not a viable strategy. A client may revisit your property with another company and become confused and angry if it is offered at a different price.

Selling before completion

If you bought off-plan you can try and resell prior to completion provided your purchase contract allows you to do this. Selling on or ‘flipping’ the purchase contract prior completion avoids taxes and costs. You will not pay the IVA, notaries fees, stamp duty, full lawyers fees or have to think about setting up a mortgage or paying the running costs of the property.

Selling off-plan is harder than selling a resale: an unfinished property does not give the potential purchaser the option to see what they are buying, and the developer will not be interested in marketing your property while he still has his own product to sell. The main opportunity for resale usually occurs when the development is in its final stages of completion, the property and community areas are nearly finished and the developer has very few units left. If you bought early enough, in a choice location (i.e. corner plot, largest plot, best views, best features, biggest build size, etc.) and on desirable development you stand a good chance of reselling. In this case your agent will be your best ally as he will be familiar with the development and your particular unit and will be a likely source of clientele.

‘Flipping’ a purchase contract prior to completion is only as viable as the property’s resale potential so do your research before you invest. Developments with the highest resale potential are those with limited product availability, good features (location, view, etc), a good value per square meter built (this varies from area to area so do your research), in a desirable area and a long build out phase to provide the maximum timeframe in which to resell.

Should you give an exclusive sales agreement to an agent?

By granting sole agency, your agent will be more responsible to you. You have the right to demand more service, communication and effort from a sole agent than by listing your property with several agencies.

Obviously ensure that both you and your agent agree a good sales strategy, and that he advertises your property in the manner agreed such as producing a brochure or networking your property with other agents. It is especially important that he report to you regularly on sales activity. Your sales strategy together with the agencies you use to market your property must result in several viewings per month. If this does not occur then there is something wrong. Finding a buyer for a property is a numbers game: the more people who view the property, the greater the likelihood that someone will negotiate for its purchase. There are some buyers who will negotiate hard, and others who won’t, but it’s easier to refuse a low offer if you are showing your property frequently.

Under-declaration and it implications

It used to be common practice in Spain for the vendor to under declare the property sale price during transfer at the signing of the Escritura Compraventa and demand the real difference in cash (black money). This evaded the true values due on transfer tax paid by the purchaser and capital gains tax paid by the vendor.

For example: You sell your house for 150,000€, and the official price you bought for on your Escritura was 50,000€. You stand to make a gross profit of 100,000€, but instead you only declare the sale at 70,000€ and ask the purchaser to pay the 80,000€ difference in cash. The purchaser then pays 7% transfer tax on the declared 70,000€ and you only pay capital gains on the 20,000€ declared profit.

The Hacienda is looking into property transactions: they have their own tables and values and are empowered to set a higher value on a sale if they judge that an under declaration has occurred that is greater than either 20% or 12,000€. They can apply heavy penalties under the terms of Spain’s 1989 Ley de Tasas. Today’s potential buyers are also aware of this and will usually not be interested in large cash deals. You will be reducing the scope of potential clients for your property and dramatically extending the sales timeframe.

In conclusion, selling a property can be as easy or as complicated as you decide to make it and depending on the advice you receive from the professionals involved in helping you formulate your strategy. Competent, honest, professional help by agents, lawyers and tax advisors can go a long way to help you manage a sale objectively and more easily.

April 21, 2006 | Permalink

The Spanish System of Inheritance Law

The Spanish inheritance law is similar to the French system where the emphasis is to protect the rights of the deceased’s direct descendents. If you already own, or are seeking to own, a property in Spain, take the time to speak to a lawyer and a qualified financial advisor. This will help you ensure that your assets are in order, and the correct provisions have been made so that your inheritor(s) pass through the process of probate easily.

Here are some of the key points to Spanish Inheritance law:

• There is no automatic inheritance by a wife or other joint owner of the deceased’s joint owners share in any property/asset.
• A spouse’s inheritance is taxable.
• Children are compulsory heirs under the Spanish law of herederos forzosos.
• Only one third of the estate may be disposed of freely, one third must be spread between the children in equal parts and the last third (if property) is subject to an automatic life interest in favour of the spouse. Upon his/her death this share is redistributed amongst the children according to the provisions made in the will.
• If the assets inherited include a property then the surviving spouse holds a usufruct over the property and the children cannot dispose of it freely until he/she dies.

The most important consideration is that under Spanish law, you are not free to dispose of your assets as you like. Certain groups of dependants are protected and have priority rights and if they are not reflected in the Will, then those dependants have the right to challenge.

There is currently confusion as to what may happen in the case of a death of a foreign owner of a Spanish property. Spanish law (Article 9 of the Spanish Civil Code) states that in case of a foreigner’s death (resident or non), the foreigners own country’s law should be applied in order to decide what should happen to their estate. The only legal requirement is that the according inheritance taxes are paid on the assets transferred.

Normally this means the UK Will and Spanish Will (which runs in accordance with it), are used to decide who benefits from the estate. However, if one of your principal inheritors (see below) decides to contest the provisions set out in the Will they will have a right to challenge in the Spanish courts and they will probably win.

Spanish law of succession

If a foreigner dies in Spain without a will, his/her estate will be distributed according to the Spanish laws of succession, and as of yet the law does not recognize childless cohabitating couples. This can have very serious consequences as highlighted by the following scenario:

A partner dies and leaves no Will there are no children and they owned a property in Spain jointly. By law the estate is legally entitled to the parents of the deceased and not the other partner.

The Importance of having a Spanish Will

Let us assume that you have died and the only Will you have in place covering your assets in Spain is the one in your home country. Spanish law will look to your Will from your home contry, but your executors will still need to check with the Spanish Central Wills Registry in Madrid that no Spanish Will exists. The foreign Will is then taken as the main document for deciding probate, subject to the rights of the spouse and children. However, before the authorities accept the Will the executors must translate it through an official translator and provide copies of:

• Probate
• Death Certificate
• Birth Certificate
• Marriage Certificate

All of the above documents need to be certified for use in Spain by your countries foreign office with a Hague Apostle stamp.

A Spanish lawyer will also have to be appointed in order to prepare a certificate to prove to the authorities that the disposals in the Will are lawful and not in breach of the law. If the Will does not follow the Spanish scheme of dispersals then your direct inheritors (children or wife) can mount a legal action on the assets transferred under Spanish legal system, this could cause your intended beneficiaries considerable loss.

If you died as a non-resident in Spain then the executors should prepare a Power of Attorney to sign the inheritance documents and pay the associated tax for the beneficiaries. Your beneficiaries would need to collect together the money needed for the taxes and send it to Spain.

As you can see the associated processes are expensive & time consuming and the costs and taxes can even start to outweigh proportionally the value of the remaining estate.

What is the Solution?

Make a Spanish Will that runs in accordance and along side your own Will for your assets held in Spain. There are many very good reasons for considering this option. Your executors will be able to avoid a lot of the costs and red tape; you will also be able to make more complex arrangements for the disposal of assets including those not held in Spain. By separating those assets held in Spain under the Spanish Will and those in your home country under your national Will and by making the correct provisions in the latter, risks of inappropriate disposals are minimized and timeframes are greatly reduced.

If you rely solely on the Will from your home country, no action can be taken until the Probate of the estate in your home country has been settled, and with this taking some time your beneficiaries run the risk that the Spanish authorities will impose penalties if the deadlines are missed.

Make sure that if you follow this recommended 'dual Will scenario' that your  Will doesn’t conflict with the Spanish one and that your lawyer hasn’t left in standard practice clauses such as one’s that revoke all previous Wills.

How to make a Spanish Will

The process for going about and making a separate Spanish Will for your assets is simple. Your Spanish lawyer will listen to your wishes and will advise you as to how the Will should read in order to carry out your intentions. The Will is then made out in two columns; one will be Spanish and the other in your native language. The Will is then checked by the Notary and is signed in his presence and that of three witnesses. This is called an open Will, the notary keeps the original, the lawyer keeps an authorized copy and a notification is sent to the Wills Registry in Madrid. Typical charges are around 300€ plus IVA (VAT) for a couple.

April 21, 2006 | Permalink

The Toolbox: Renting your Property - A Shortlist of Recommendations

Here is a summary of some of the more important points that we feel will help you make the right choices while choosing and renting your property:

1. Do your research on an area and run a cash flow analysis using the calculator to help you project costs and return.
2. Define your rental strategy. Are you wanting to let your property on a short term basis of days or weeks or several months to a year.
3. If you are planning on using the property at all, use the short-term letting or por temporada contract.
4. Try, wherever possible, to let to people you know or trust. If that is not possible, ensure that you or your agent vet the potential tenant thoroughly.
5. If you are planning to lease the property for holiday let periods (days and weeks) you will need to furnish the property.
6. If you are looking at a longer-term lease it is probably a better idea to find out what owners of similar properties in your area are doing. It may transpire that your property is easier to rent unfurnished, saving you time and money in choosing and paying for furnishings.
7. If you plan on using the property yourself between lets, make sure you have a secure storage room to place your belongings.
8. When decorating your property, avoid bold colours and stick to a fairly neutral palette, furthermore don’t try and cram as much furniture in as possible, keep things basic and easier to clean.
9. Prepare an inventory before you start letting your property and ensure that your tenant and your letting agent (if applicable) has an up-to-date copy.
10. If you are not going to deal with tenants yourself, make sure you have a reputable agent to manage the lease, help you market the property and deal with the tenant on your behalf.

April 21, 2006 | Permalink

The Guide to Renting your Property in Spain

With today’s low interest rates your rental return from your property could easily go towards paying most if not all of the costs, while you still have use of it for part of the year. With this obvious benefit in mind you should be aware of various important considerations while attempting to do this. This quick guide has been written to inform you about how you go about letting your property. As a landlord you have certain obligations to your tenants and renting is not without its pitfalls.

Choosing how to rent your property

First and foremost, be aware that there are two different ways to rent your property in Spain:

Long-term rental or vivienda

• Provides the tenant with a contract that affords him certain irrefutable rights
• Allows the tenant to renew his contract for up to 5 years.

Short-term rental or arrienda de tempor