Transferring your Spanish property to a UK limited company.

1.- How much is the tax in Spain to transfer the Spanish property to a UK limited company?

There are 3 taxes:

– Capital Gains tax for the transferor ( the person that in exchange of the house receives shares of the UK company). This is 19 pc of profits ( if transferor is non resident in Spain. If the transferor is resident 21 pc ( but the first 6,000 Euros of profit at 19 pc and if the transferor is over 65 there is no tax provided the transferor meets the conditions of the law for total allowance of the tax).

– Town Hall Plusvalia. This is a tax to be paid to Town Hall based upon the time the transferor has enjoyed the property and the value of the property in the local rates tax.

– 1% Stamp Duty of the value of the property declared in the deed of incorporation

2.- How much will the Limited company pay each year in Spain?

The limited company has a duty to obtain a fiscal tax number, to appoint a resident representative in Spain and to pay a tax only if the company obtains profits in Spain. The ordinary tax for non resident companies is 24% of the profits.

The company can deduct from returns in Spain ( generally if it rents the property) the direct and necessary expenses.

Market value prices are applicable to business between the company and its director/shareholders and link business protocols are compulsory when the yearly linked business is over 100,000 Euros per year or people are resident in offshore territory

3.- How much tax is there to pay in Spain if the UK Limited company sells the house?

There is a Capital Gains Tax of 19% on profit, the same as when any non resident sells their property.

Further to this there is the Town Hall Plusvalia tax, the same as when any non resident sells their property.

4.- How much tax is there to pay in Spain if you sell the shares of the UK company to another person?

For the purchaser:

– If the purchaser buys the shares within 3 years of the transfer of the house to the company, the purchaser must pay 7% as if it were buying a property normally.

– After this time, the purchaser must pay 7% tax only if he/she acquires over 50% of shares. If two purchasers buy 50/50 there would not be any tax to pay.

For the vendor:

– Capital Gains tax to be declared in the country of residence (depending on the particular agreement to avoid double taxation, then there would also be taxed in Spain).

5.- Would Spanish Inheritance tax be avoided in this scheme?

As a general rule, yes. When the owner of the shares of the UK Limited company dies, his/her shares will go to his/her beneficiaries and this should not be a matter of Spanish concern.

Nevertheless, we cannot entirely rule out problems with the application of Spanish Inheritance Tax to this scheme because:

a) The Spanish Inheritance Tax Law (and Bylaw) are very vague on this point.

b) The only asset of the company is a property in Spain.

c) This scheme is set up to avoid the application of the Spanish Inheritance Tax.

As transferring Spanish properties to UK companies is not common, there is no precedents at this point in the Tax Authorities of Tax Courts decisions in Spain.

6.- Are there other points to take into consideration?

First: How much Inheritance Tax you have to pay now in order to draw up a balance of the advantages and disadvantages.

Second: To check how much costs to set up the UK company and to maintain it in the UK.

Third: To know the taxes you must pay in the UK each year.

Fourth: To know how much tax there is to pay in the UK if your company sells the house.

Fifth: To know how much tax you must pay if after selling the house the company gives you the money as dividends or return of capital.

Sixth: How much Inheritance tax is to be paid in UK for transferring the shares to beneficiaries.

Seventh: Check that the way of transfer of the property to the UK company is not a gift. Under this premises the company must pay a 19pc market value of the property by the transfer.


As Wills and Probate solicitors based in Spain we offer compassionate clear and practical advice on all wills and probate matters covering:

Tax efficient will drafting (including consideration of inheritance tax and capital gains tax issues)

Enduring powers of attorney

Processing probate applications

Distributing the estate efficiently and effectively

Applying to the court of protection where necessary

Applications for dependants under the Inheritance and dependants Provisions Act where insufficient provision has been made by the Testator

Post death Variations to wills to make them more tax efficient where there is agreement amongst the beneficiaries

We understand that following the death of a family member or loved one that it can be a very difficult to time to have to deal with administering the legal and financial affairs of the deceased and at such a time we try to be as supportive and helpful during the process of applying for a grant of probate or letters of administration.

It is possible for an Executor to carry out the work of administering the estate themselves but many Executors choose to instruct solicitors to carry out the duties and ensure their responsibilities are fully and totally complied with.

We aim to keep our fees at a reasonable rate and at all times will provide regular updates on costs and provide costs estimates for work to be carried out.

Where a cost estimate has been reached we will seek your authority before carrying out any further work so that you can be sure that you will not be billed more than we have estimated.

For more information about the services we offer as Spain based wills and probate lawyers please contact on (+34)963325959

Will Disputes

Our probate & wills disputes solicitors and lawyers have significant experience in dealing with many types of disputed wills & probate and challenges relating to wills. Challenging a Will, disputing part or all of the terms of it, and/or administration of the estate can be awkward and extremely distressing. As inheritance and Will dispute solicitors and lawyers (also sometimes known as contentious probate lawyers or solicitors), we understand the sensitivity and provide a realistic assessment of your case. If you have a problem with a will or wish to dispute a will or probate, please telephone us or complete our will disputes contact form. Wills can be disputed for a number of reasons, including but not limited to :-

• Lack of proper execution of the will

• Lack of capacity (allegation that deceased was not capable of making a valid will)

• Lack of knowledge and approval

• Undue influence and fraud

• Forgery

• Applications to remove or replace executors

• Applications to rectify wills

• Trusts & charity disputes

• Claims under the Inheritance

• Procedures for preventing assets being distributed pending resolution of concerns or a dispute (known as entering a caveat)

What action can be taken ?

If it can be established that the deceased did not have the relevant mental capacity or was subject to undue influence an application can be made to court requesting that the will be declared void.

If a Will has made no provision for a close member of the family or a dependant, a claim for reasonable financial provision can be made pursuant to the Inheritance (Provision for Family and Dependents) Act 1975. To bring such a claim, it will need to be issued within 6 months of the date of the Grant of Representation and that one of the following applies:-

1. You were married to the deceased (but if you divorced under a Clean Break Order you cannot apply); or

2. You were an unmarried partner of the deceased and lived with him/her for more than 2 years (this is includes same sex couples); or

3. You were a child of the deceased or treated as a child of the family; or

4. You were a dependant of the deceased, for example, if the deceased was paying maintenance to you.

Contact our specialist probate & wills dispute team today. we have helped many clients throughout Spain and UK

The steps to buying a house in Spain

The steps to buying a house in Spain

Once you have decided on the property that you want to buy, the process is this:

Nota simple informativa
With a nota simple from the Property Registry (Registro de la Propiedad), you’ll find out if the property is free of debt, if it really belongs to the seller, and if the description of the property matches what the buyer has been told (to avoid surprises about missing square meters).

The pre-agreement
Between the seller and the buyer, it’s best to have a contract in place until the public deed of purchase is ready. It’s usually a simple document in which the seller expresses their intent to transfer the property to the buyer, and the buyer expresses their intent to buy at the price and conditions agreed upon. At this time, the buyer also gives to the seller a percentage of the agreed-upon price, typically 10%. The typical agreement in Spain (called contrato de arras) is if the buyer backs out of the contract, they lose the deposit; if the seller backs out, they have to pay double. Of course, the buyer and seller may choose another type of agreement if they prefer.

The mortgage
The documents typically required by a bank are:
Your work contract
Your last 3 paycheck stubs
Your latest income tax return
Your pre-agreement with the seller
Proof that the property tax (IBI) on the house is paid up.
Other mortgages or loans that you may have
All property titles, both in Spain and overseas
Certificate from work authorities (vida laboral), showing your past work history
Records of your assets (bank/mutual fund statements, etc.)
Prenuptial agreements, if any
Nonresidents: A certificate of nonresidency (form available from the bank)
If self-employed: Local tax on economic activities (IAE)
If self-employed: VAT tax you paid for the last trimester and last year

If you get a mortgage, you will become acquainted with an appraiser (tasador). The bank requires an appraiser to ensure that their loan to you is safe. You will need to pay for the appraiser’s work, usually between 300-500 euros. Note that the tasador by law is a licensed architect, so even if you don’t need a mortgage, but have doubts about the structural integrity of the house, you might want to hire an appraiser.

The closing
The property transfer must be certified by a notary. The deed of purchase will be given to the buyer after the notary reads it and the parties present agree to the contents of the deed. The following must then be presented: proof of identity (or power of attorney) of both parties, the seller’s title of property (a form that reports the investment to the Central Register), and the buyer’s payment. The buyer and seller sign the contract; beneath their signature, the notary signs using his firma protocolizada and the deed is ready for taxes.

For the buyer: transfer tax(impuesto de transmisiones patrimoniales) and stamp duty(impuesto de actos jurídicos documentados).
If the seller is an individual, the buyer pays a tax of 10% )in Valencia Region and Cataluña) of the price specified in the deed. Other regions have a lower tax- about 8% If the seller is a real estate developer and the building or land to be built on represents a first-time transfer, then the buyer pays VAT tax instead, meaning 10% for housing, 21% otherwise. If for housing, you have to add a stamp duty, in this case reduced to 0.5%, depending on the region (for Valencia 1,2%%). Some special conditions apply for the Canary Islands.

For the seller: a local tax called the plusvalia (sometimes it is agreed that the buyer pays this tax).
With a copy of the deed in hand, the seller must go to the City Hall (or wherever local taxes are paid). After filling out the form, the seller will receive in the mail a notice of how much they have to pay. This amount is calculated based on the number of years the property was held, and on the property’s valor catastral. Be aware that each town has a different procedure regarding payment of this plusvalia. It’s best to ask at the notary’s office about this payment. This has to be payed by the vendor before 30 days of the completion of the sale at the local Ayuntamiento.

Property Registry
You must register your deed at the local office. This guarantees that your ownership rights to the property are fully protected. (Some small towns don’t have an office, some big cities have many — check the original deed of the seller to find out which office corresponds to you).

Extended example
Bob and Judy found an apartment in Barcelona and negotiated a price of 340.000€. The seller, Jordi, did not use a real estate agent. Bob and Judy signed a contrato de arras. The seller asked for a downpayment of 40.000€, a bit more than the usual 10%, but Bob and Judy didn’t want to argue this point. They then went to a bank for a mortgage of 260.000. The bank offered them a variable-rate mortgage for Euribor + .50%, with no opening fee, no cancellation fee, and a first-year rate of 3.50%. Since Euribor was currently 2.31%, they saw that this would cost them an additional 1300€ the first year. They asked the bank to give them Euribor + .50% for the first year also, which the bank agreed to.

The bank requested the following documents from Jordi:
A copy of his DNI.
Receipts showing he was paid up on his property tax (IBI), building fees (pagos de comunidad, and mortgage (certificado de la deuda pendiente).

Once all of Bob and Judy’s documents were presented, it took one week for them to be pre-approved. It took another 1 1/2 weeks for the bank to get an appraisal (tasacion) done on the property (no delays on Jordi’s side in letting the appraiser in), and another 3 days for the bank to hear back from the appraiser. The appraised value was 413.000€, so the bank approved the loan. Bob and Judy went to the bank to sign the mortgage contract. They were also required to get property insurance (118€/year) and life insurance (which they got on Judy, since it only came to 178€/year for her). Bob and Judy confirmed that after a year they could cancel both policies (since Bob, in fact, already had a life insurance policy). They were also required to domiciliar a few things in the bank account. They called the gas, electric company, and nursery to have automatic withdrawals done through this account. The bank then gave them an estimate of what the mortgage payments would be, as well as a listing of the various retainers (provisión de fondos) that they would need to pay. The provisión de fondos appeared as follows:

Compraventa/Purchase (340.000€)

Notaría Hacienda Registro Gestión Total
795€ 34,000€ 450€ 360€ 35,605€

Préstamo/Loan (260.000€)

Notaría Hacienda Registro Gestión Total
909€ 5200€ 439€ 360€ 6908€

Cancellation of prior mortgage (86.441€ remaining)- To be payed by Vendor , around 600€




The total at the bottom says 317.459€. Bob and Judy already paid 40.000€. Did this mean they actually had to pay 357.459€ in total? Yes, at least initially. The 10.128€ and 6.989€ are the retainers for fees that will need to be paid to the notary, the property registry, to the tax office (Hacienda), and to the gestor. The property purchase, the new mortgage, and cancellation of the seller’s mortgage all have to be notarized and registered. This bank contracts a gestor to manage this and make the various payments. At the closing, the bank rep/gestor will tell you that they will send you the title for the property in 2 months (once it has been registered). At this time, be sure to ask the bank for all the notary, Hacienda, and Registry receipts. The bank must refund you the difference between these actual receipts and the retainer that was paid.

Then note the cancellation costs of 885€. Bob and Judy don’t pay this. Their bank will charge this to Jordi. Jordi then complains to his own bank, «How come I have to pay this? You told me I had a 0% cancellation fee.» His bank responds that this is not a cancellation fee. This is the cost to register the cancellation with the property registry (and all registry changes require a notary’s signature).

The bank then charges 300€ to handle the life and property insurance forms. Jordi is a resident of Spain, so no 3% tax to nonresidents is withheld.

Bob and Judy transferred 57.459€ to the bank to pay the rest of what they owed. Four days later was the closing in Barcelona; 30 days in total from the day they presented the documents to the day of the closing. The closing went smoothly, though Jordi made a long face when he heard the property had been appraised at 413.000€. Jordi received the check from the bank rep and gave Bob and Judy the keys to the apartment. Two months later Bob and Judy received the title from the bank rep.




This guide sets out essential information for British nationals OR ANY OTHER NACIONALITIES  wanting to buy property in Spain, including advice on legal advice, buying in certain areas, complaints and more. It should be read together with the ‘How to buy property abroad’ guide. We are unable to provide any guidance on individual property purchases apart from the information and links listed below. See our information on what consulates can and cannot do for British nationals.


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It is strongly recommended that you choose an independent lawyer who is specialised in Spanish land law (urbanismo). We are experts in the field and have done so far over 3,500 transactions.  Independent means that they work on your behalf only and are not also looking after the interests of the agent or developer. The Spanish property conveyancing system is different to the UK system so you should ensure that those involved in the transaction are qualified and experienced in Spain.

Exercise extreme caution if an estate agent, promoter or lawyer urges you to cut corners to save money or time.

A Spanish notary public will be involved in preparing the contract of sale and issuing the public deeds. As the purchaser, you have the right to choose which notary you use. The notary is a public servant who has a duty to provide you with free and impartial legal advice on all aspects of the contract before you sign. It is a good idea to seek advice from the notary early on. When a date is set for signing the contract, you have three days beforehand to visit the notary and ask any questions you may have about any aspect of the contract. A full list of English-speaking notaries can be found here

If you choose to work with a British estate agent, promoter or lawyer, check that they are qualified, reliable and have experience operating in Spain. Check that they are registered with the Law Society in the UK and specialise in International Transactions. If your lawyer is based in Spain, ask for their registration number and check that they are registered and practising with the local bar association (Colegio de Abogados).

You should also check that your lawyer has professional indemnity insurance and not sign any papers or hand over any money until you have taken independent legal advice. Although the British Embassy cannot recommend a lawyer, we do have lists of local English-speaking lawyers and qualified translators available on our website.

Many Spanish citizens use a ‘Gestor’ to carry out bureaucracy on their behalf. You should note that only a Gestor Administrativo with the GA kite mark is professionally qualified and certified to process paperwork directly with the Spanish administration. More information can be found on their services here

Should you become involved in a property dispute, but do not have sufficient means to meet the costs of a court case, you can apply for legal aid. More information is available on the European E-Justice Portal. Applications for those resident in Spain should be directed to the local bar association.

Please bear in mind that if you do become involved in a property dispute, you may need to seek a new lawyer with specific expertise in the field of litigation you wish to pursue, e.g. specialist civil lawyers for compensation claims against private parties such as agents, developers or banks, and specialist public body litigants (contencioso administrativo) for claims against local, regional or state authorities.


If you do not have a good understanding of Spanish, make sure that you get all contracts and relevant documentation translated by an independent translator. You can find a list of accredited translators and interpreters in Spain on the Spanish Ministry for Foreign Affairs website.


Do your homework: you should analyse and compare a range of different products and services offered by different lending companies. If you have any doubts about the terms and conditions, ask the lender to clarify. You should also check that the lender is listed as authorised to operate in Spain with the Bank of Spain.

Look for the mortgage which is most appropriate for your capabilities and needs. There are a range of mortgages on offer and you should pay special attention to the interest rate and repayment period, fees for setting up the mortgage as well as early repayment and cancellation fees.

If you cannot keep up the mortgage repayments, the Spanish bank could repossess your property in Spain. If the value of the property is less than the total debt outstanding (you are in negative equity), the bank may pursue your UK assets to recover the mortgage shortfall using a European Enforcement Order.

Make sure you fully understand the mortgage agreement you sign. If you have any doubts check with the branch during the 10 working-day period after the binding offer has been provided. If for any reason you cannot keep up the mortgage repayments, you should speak to your bank immediately (before defaulting on repayments) to discuss the options available.

Further information on mortgages in Spain is available from the Spanish Mortgage Association.


The Spanish tax authority is called the Agencia Tributaria. It provides some information on its website in English.

Brief information on taxation is provided within the Living in Spain guide.


Further information is available in the property fraud guidance.

If you believe your lawyer has been negligent and has not met their obligations, you should complain in the first instance to the provincial bar association. If the response is unsatisfactory, you can take your complaint to the regional and then national bar associations. Complaints should be in writing and in Spanish. A full list of the bar associations around Spain can be found on the website of the General Council of Spanish Lawyers.

If you have a complaint about the way a court has handled your case, you can present a complaint to the General Council of the Judiciary.

If you have a complaint against a notary or gestor administrativo, this should be directed to the professional council of which they are a member.

Visa/residence requirements

Please see our separate guide on Residency requirements in Spain.

Purchaser’s checklist

Before you complete your property purchase you should make sure that:

  • you have seen the Land Registry extract (nota simple), available from the Colegio de Registradores (translations into English for an additional fee), and checked the following details
  • the property and land for sale match the details registered and the sellers are the registered owner(s)
  • there are no debts or charges, such as a mortgage, on the property
  • there are no legal proceedings initiated against the property for contravention of land planning law
  • you have checked that planning permissions are in order and the property is a legal build. This is particularly relevant when buying off-plan or direct from a developer. The town hall can inform you whether the building has all licences and permissions and provide details of the type of land. If the property is built on rural land or land that is not classified for construction, additional confirmation should be sought from the regional government as to whether they have authorised the construction
  • if you are buying an off-plan property, confirm that the property has been certified as finished by a registered architect and registered as a new build in the property register. The registration should also provide details of the developer’s insurance against structural and other defects in the construction. In the case of a private build (the previous owner built their own house and decided to sell before ten years had lapsed) you will need to request these details separately
  • you have checked the latest town plan to see whether or not the plot you wish to buy has any building restrictions, is in a green zone or includes a public pathway or similar. This can be viewed at to the town planning (urbanismo) department of the local town hall
  • you have carried out a property survey. Whilst this is not obligatory, it is wise to get a chartered surveyor to check the property
  • You know the cadastral value of the property and how much purchase tax will be due. Be aware that tax is charged on the council’s valuation of the property as opposed to the amount of the sale. You can check this at the regional government’s online tax agency site using the cadastal reference number

Make sure you have seen the following documents:

  • a paid-up receipt for the previous owner’s annual property tax (IBI). It is also wise to get a certificate from the town hall proving that there are no unpaid rates from previous years
  • the Catastral certificate giving the exact boundaries and square metres of your land. The Cadastral record will be linked to the Land Register record by a cadastral reference which will be included in both. You should ensure that the property and land description contained in both records matches
  • the licence of first occupancy or habitation certificate issued by the town hall. You will need this document to connect to electricity and water companies. Developers cannot force you to complete without this licence.
  • receipt to prove all utility bills have been paid by the previous owner
  • if applicable, a certificate signed by the President of the Community of Property Owners stating that there are no outstanding debts. You should be aware that if you later find that there are such debts outstanding, as the new owner, you assume the debts for the current and previous year (two years in total)
  • as from 1st June 2013, all homes for sale or to let in Spain are required by law to have an energy efficiency certificate. If you are considering buying a property, the seller is obliged to show you this certificate

On completion, the public deed should reflect an accurate description of the property. It is advisable that you register the property in your name with the Land Registry as soon as possible to ensure full protection of your rights. The notary can even send advance notification to the Land Registry electronically once the public deed is signed.

Buying property in certain areas

If you are considering purchasing a coastal property you should contact the Coastal Demarcation office in your region to get a certificate to certify that the property is not affected by the 1988 Coastal Law. Bear in mind that while it is possible to view the coastal boundaries of the public maritime areas online on the Environment Ministry’s website, this may not provide sufficiently accurate information on which to base a property purchase.

Exercise extreme caution if the Land Registry record shows that the property you wish to buy is built on rural land. In normal circumstances this type of land is reserved for agricultural use and you would need to undertake additional checks with the municipal and regional authorities to ensure that full planning permission has been obtained for residential use.

Buying property off-plan

Buying off-plan property inevitably involves higher risk than buying re-sale property. If you are considering buying off-plan in Spain there are a number of points to consider.

Make sure you have a bank guarantee (aval bancario) to cover your stage payments. Developers of off-plan properties are legally obliged to secure all deposits with a bank guarantee. However, bear in mind that this obligation only comes into force once the developer has obtained planning permission for the development so you should ask to see this before making any payments. You can also check this at the Land Registry, because if the description of the future building is registered, the registrar will have seen evidence that the licence exists and work has begun in accordance with the approved design.

You should ensure that the bank guarantee is individual and not a collective guarantee covering the whole development, which does not give the same protection. You should also request proof that your payments are deposited in a special escrow account, which can only be used for the construction of the specified development.

Make sure the developer is registered with the Mercantile Registry and the person who is going to sign on the developer’s behalf has the legal power to do so. You can visit any Mercantile Registry office or use the registradores website.

Check with the Land Registry to make sure the land which is going to be built on is registered to the developer you are doing business with.

Make sure you obtain a copy of the Cadastral certificate giving the exact boundaries and square metres of your land.

Ensure the developer has insurance covering damage caused by structural defects to the building. This insurance should be included in the property manual (libro del edificio) that the developer gives you.

It is also advisable to obtain a certificate regarding the planning situation of the plot you wish to buy from the Town Planning (Urbanismo) department of the town hall. This will include other information such as whether the plot has any building restrictions, is in a green zone, includes a public footpath or if there are any current plans to build a motorway etc.

Once construction has finished, and before you sign the title deed, ask for proof from the seller that the construction has been finished in accordance with the description given in the plans. This is issued as a certificate (certificado final de obra). You can also check this at the Land Registry.

Make sure you have the licence of first occupancy (licencia de primera occupación) which is issued by the town hall for new buildings and certifies that the property is habitable. You will need this document to connect to electricity and water companies. Developers cannot force you to complete without this licence.

Consider asking a chartered surveyor to check the property. This is not obligatory but it is wise to obtain a professional opinion on the property before you complete. The Royal Institute of Chartered Surveyors (RICS) exists in Spain and there are residential chartered surveyors working across the peninsula and the islands. Members of the RICS are qualified and experienced professionals offering independent and impartial advice.

The Spanish College of Architects in each province also offers a list of independent specialist surveyors.

Should the developer not build your property within the timeframe stated in the contract, or services and utilities are not completed and connected to standard, or the habitation certificate cannot be issued, you are legally entitled to either:

  • rescind the contract and have the deposits returned plus interest
  • or extend the deadline, allowing the developer to complete the property

If you want to rescind the contract, it is advisable to seek independent legal advice. Once you have consulted a lawyer, the first step is to write to the developer to explain that due to non-compliance with the contract, you want to rescind the contract and request that the deposits paid so far are returned, as well as the accrued interest. You should include any relevant documentation (e.g. a copy of the contract, copies of payments made, copy of the bank guarantee) and state a timeframe by which you want the amount to be reimbursed. It is advisable to write to the developer via Burofax, which enables you to prove that you have sent a specific document, and that the recipient received it.

If the developer does not respond to you within the specified timeframe, you should contact the claims department of the bank or savings bank responsible for the guarantee to request a refund of the payments made. Again, it is wise to make contact via Burofax and attach copies of all relevant documentation, including a copy of the bank guarantee, a copy of the complaint submitted to the developer, a copy of the developer’s response (if any) and copies of any documents which indicate that the developer has not complied with the contract.

Should the bank not comply, the only remaining course of redress is to instruct a lawyer to take a civil case against the bank.

If you believe you have been a victim of fraud and you have neither a bank guarantee nor an insurance policy from the developer, you should seek independent legal advice regarding taking criminal legal action through the courts and register a statement with the police.

Renting out your property

As from 1st June 2013, all homes for sale or to let in Spain are required by law to have an energy efficiency certificate. If you are offering your property for rent after this date, you will need to obtain an energy certificate first.

Short-term lets

If you want to let your property to tourists on a short-term basis, you must ensure that you are doing so in accordance with Spanish law. The regulations on letting tourist apartments (apartamentos turisticos) and holiday homes (viviendas vacacionales) to tourists will vary depending on the region where the property is located.

If you are planning on making a return by renting out your property on a short-term basis, it is best to seek independent legal advice and check what the rules are at the local town hall or the tourist department of the regional government before you buy. Be aware that the marketing of private residential property to tourists is strictly regulated in many regions of Spain.

Owners who are caught illegally advertising or letting out their properties without complying with local legislation can be liable for significant fines, in some cases reaching as much as €30,000. If you are planning to buy an apartment which is part of a residential block, you should also check whether there are any rules set by the committee of owners that prohibit or restrict short-term letting. You may want to consider hiring a Spanish letting agent to assist with finding tenants, drawing up rental contracts and managing the property on your behalf. In some regions, such as Murcia, it is obligatory to use a specialist tourist apartment management company for short-term rentals to tourists.

Long-term lets

Owners who let their properties on a long-term basis are free to do so within the terms set out by the national rental law. However, it is worth seeking professional advice to make sure that you are complying with Spanish legislation and that you are using the correct rental contract.

In Spain, there are different types of contracts depending on how long the property is due to be let. You can get copies of these contracts from tobacconists.

Letting taxes

You must ensure that you declare your rental income to the Spanish tax authorities (Agencia Tributaria) whether you are resident in Spain or not. Taxation is a complex issue, and it is advisable to seek the advice of an accountant or professional tax adviser with comprehensive and up to date knowledge of both the UK and Spanish tax regulations.

Equity release schemes

Equity release schemes are schemes which are designed to allow homeowners to release equity from the value of their property as income, a lump sum or a mixture of both. A reverse mortgage (hipoteca inversa) is one form of equity release which allows homeowners to borrow money against the value of their home, which is used as collateral. Reverse mortgages are generally marketed at retired homeowners who are over 65 years old.

If you are considering an equity release scheme, such as a reverse mortgage or lifetime loan, it is advisable to check that the company offering the mortgage is registered with the financial regulator for the securities markets, the Comision Nacional de Mercado de Valores (CNMV) and that they do not have any warnings issued against them.

A list of financial companies which are not authorised to operate in Spain and those subject to an ongoing investigation is available on the CNMV website.

Seek independent legal advice prior to signing any contracts to make sure that the information the company has given you is correct, there are no abusive clauses in the contract and you are fully aware of your obligations and rights.

Be suspicious of financial companies or agents who try to persuade you into signing a reverse mortgage agreement as a way of avoiding or reducing your tax obligations. If you have any concerns about your tax obligations (for example inheritance tax) you should seek the advice of an experienced professional tax advisor who can advise you independently. Alternatively you may wish to check with the Spanish Tax Office (Agencia Tributaria).

If you are not happy with the scheme you have been sold, the first step is to submit a complaint to the company responsible for your investment. If, after two months, you are not satisfied with the response or do not receive a response, you are entitled to complain to the CNMV.

Although the CNMV final reports are not binding, they will comment on the conduct of the company or person against whom the complaint has been made. Where the report favours the customer, the company involved is required to notify the CNMV of any action taken to resolve the matter. If you believe you have been a victim of a fraud involving an equity release scheme you can register a statement with the police and seek independent legal advice on taking action through the courts. Further information for victims of fraud is available on the fraud page.

Problems with timeshare property

Timeshare ownership is well established in Spain with many respected companies, agents and resorts operating legally and fairly. However, there are also many unscrupulous companies, some of which claim to provide various incentives (including stock market investments and discounts on airfares and accommodation) when exchanging existing time-share ownership or taking out membership of holiday clubs.

You may find it useful to read the timeshare fraud advice from Action Fraud, the UK’s national fraud reporting centre, run by the National Fraud Authority.

Other sources of advice

The Spanish Land Registry publish a Guide to Buying Property in Spain. Spanish Property Insight provides information and advice on buying a property in Spain.

Expat forums, English-language newspapers and talking to local residents including other British nationals who have already made the move can really give you a feel for an area and give you the inside track on any local problems.

The Spanish Ombudsman is responsible for defending the fundamental rights and civil liberties of citizens by monitoring the activity of public authorities. If you have a complaint about any public authority, you can submit a complaint to either the regional or national ombudsman. If you are facing problems with your property in Spain, there are many residents associations who may be able to provide support and advice as well as put you in touch with others who have had similar experiences.