In this week’s Experts Corner, we feature insight from one of our legal partners, Raquel who can offer expert legal advice and guidance on the key legal issues that will affect expats making the move to Spain.
1. Estate agent. How do they work and what is their commission?
It is very likely that the property you have chosen has been marketed by an estate agent. A number of questions that are asked of us, such as negotiating the offer, should actually be done by a good estate agent, rather than your lawyer! We recommend asking your agent to check over everything in the property – and if there is furniture or items included in the sale, your agent should list them and get the signature of the seller. The seller of the property is the one who should pay the estate agent commission.
2. What do recent inheritance tax changes mean?
What an incredible change for EU buyers these new regulations mean! There is a tax exemption of €175,000 per inheritor, as long as the compulsory law of inheritance has been followed – e.g. a wife has left everything to her husband, and afterwards to children. This makes such a big difference for the ones inheriting.
3. Must I return to Spain for completion?
Not at all. Any law firm in Spain will request from you a power of attorney document which can be signed in the UK or in Spain. Your lawyer will prepare the document and send you the instructions to do it in the UK – and this means the lawyer can complete the purchase on your behalf. All you need to do is come back and collect the keys.
4. How do I open a bank account?
With the new Anti-Money Laundering law and more controlled transactions, the bank will request a Tax return or P60 and the TIN number (the registration number of the tax payer in the UK). The bank will also request your passport, all your personal details (address, contact telephone number, etc.) and more importantly your NIE certificate (your lawyer can obtain this on your behalf with the power of attorney document).
5. Do I have to mention my property in my English Will?
No. Spain has a double taxation treaty with the UK. The best thing to do is to have a Spanish Will which covers present and future assets in Spain, and an English Will which covers ONLY the UK. Your English lawyer should have a copy of both of these though.
Important: If there is no Spanish will in place, your inheritors will have to face a court procedure.
6. If I rent my property out, do I have to pay any tax?
You will have to pay 24.75% of the rental tax income, after offsetting all the running costs of your property. Included within this will be property rates, rubbish collection tax, electricity and water bills, community fees if applicable, home insurance and any improvements you have made to the property (which should be justified with invoices).
The rental tax form must be filed every quarter; the tax year in Spain is from 1st of January to 31st of December.
To be put in touch with Raquel, a trusted bi-lingual Spanish Solicitor, simply fill in the form below.