Thursday, 14 June 2012

Spain – The Sun still Shines

Someone in the UK said to me ‘Not sure I’m going to Spain this year, due to the Economic mess’

The beaches are clean, the Mediterranean is still blue, the food is cheaper than last year, lots of cheap flights, great deals on hotels and apartments but forget all that the headlines are bad!

Spain is still a great place for holidays, working, living and retirement!

We bought our first house in Spain on 7th June 2002; it was memorable for another reason. It was the World Cup in Japan and South Korea, England played Argentina and won 1 – 0 thanks to a penalty by David Beckham.

We forgot to have our 10 year party!

I thought I’d write down a few reasons why we bought and let you, the reader, decide whether some, all or none of the factors still apply. This is random in no particular order;

  • The climate is great and the sun shines all year round
  • It’s two and half hours from home
  • The flights are cheap if your dates are flexible
  • We love the lifestyle, street markets, restaurants, entertainment, the beach and I could go on
  • House prices are cheap compared with the UK
  • A second home is for the long term, especially retirement
  • The exchange rate is favourable
  • We needed and easily got a 50% mortgage
  • We found someone reliable to look after the place when we are not there, giving peace of mind
  • The family think it’s a great idea

I could go on but I think those 10 reasons cover most of why we bought in Spain.

The fundamentals haven’t changed, there are bargains to be bought BUT without question the biggest factor affecting the property market is a LACK OF CONFIDENCE.

So here are three ideas

  • Rent before you buy in Spain

  • Always get Professional Advice

  • You can get better rates for foreign exchange

Viva Espana

David Goodall
Financial Pages in Spain

Saturday, 9 June 2012

Tax can be……. Very taxing

I’m reprinting a letter I’ve received which I think gives its own explanation…….and a warning

  • Allow 10% / 12% extra when you are buying a property in Spain ?
  • Capital Gains tax when you make a loss?
  • Plusvalia tax when you sell
  • How much does it cost to sell?

Dear David

I’ve been reading your blog for sometime but I’ve not seen you cover the cost of SELLING an apartment in Spain.

The apartment cost the equivalent of €74,250 in pesetas in 2002. Due to the economic decline the final sale price agreed was €60,000, so clearly a LOSS. Despite that I had to pay TWO taxes based on an INCREASE in value.

In fact, after all costs and taxes deducted, I actually received €53,268 or 11% less than Sales Price.

The costs paid are as follows, all in Euros (€);

Legal Costs                                                    1,274.40
Estate Agent                                                  2,124.00
Retention for estimated Local Rates                  300.00              
Plusvalia (Tax to Local Council)                      1,234.24
Capital Gains Tax (3% to non-residents)         1,800.00

The costs, other than the taxes also include I.V.A. so there is actually a third tax. My solicitor says I can reclaim the 3% Capital Gains Tax but it ‘might take up to 18 months’ to recover!

Please publicise this TAX SCANDAL please, Mr Goodall

Name withheld
3% CGT withholding tax is a disgrace, does Spain no favours and in a falling market means they have to pay it back – eventually! Spain could drop this piece of discriminatory fiscal policy otherwise the EU Commission might do it for them.

I put this to a few of my Professional Connections and they agreed that at the ‘point of sale’ these costs were ‘about right’. However, with some careful planning, many could be AVOIDED.

Remember that this is a very modest apartment in Alicante province. As always you need professional advice and careful planning in ADVANCE.

Just ask

David Goodall
Financial Pages in Spain

Friday, 1 June 2012

May 2012 Review – Financial Pages in Spain

Topical issues

May 2012 was the second best month in the history of ‘Financial Pages in Spain’. There are many changes taking place which affect property owners and expats in Spain. Following this blog is a great way of keeping up to date.  Follow

At the end of the calendar month, I like to reflect on the main issues and topics on ‘Financial Pages in Spain’ during May 2012. The issues which were most read during the month covered these subjects

  • QROPS 2012

  • Non-Resident Taxes in Spain

  • Tax Avoidance and Tax Evasion

These are the issues that contributed the most readership. I’m always pleased to receive emails either to seek further advice or to comment on my articles.

Using the statistics provided by my service contractor, I can also indicate the most popular posts in terms of the number of people who visited the pages. They were, in order;

  1. New Generation QROPS 2012

Major changes have been made by the UK Government to the rules and regulations about Qualifying Recognised Overseas Pension Schemes (QROPS). Though only formally announced on 21st March 2012, these changes became effective from the start of the new UK Tax Year on 6th April 2012.

New Generation QROPS shows more detail.

  1. Five Non-Resident Spanish Taxes

It has been gratifying to see this post as a popular selection since it shows that it is read not only by expats who have become Spanish residents but also Non-Resident Property Owners. One disturbing aspect is that I have had people say that they ‘did not know’ about taxes that are due until they received final notices or maybe worse, letters to their UK address!

I was also contacted by a responsible Estate Agent who is using the information for his clients. I can send a .pdf format leaflet for anyone who asks. Just email me

  1. Tax Avoidance and Tax Evasion

Question: What is the difference between Tax Avoidance and tax Evasion?

Answer: A prison cell

Somewhat dramatic but since tax evasion is illegal and can lead to a prison sentence (in Spain or the UK) well worth remembering. Tax avoidance, though not illegal does sometimes come into sharp focus, as organisations seek to find loopholes in legislation.

Tax Avoidance and Tax Evasion is the detailed post, including definitions

* * * * * * *

Financial Pages in Spain continues to grow, as I can see from the statistics. Whilst Spain and UK dominate the views of both the Website and Blog, there have been readers from many other countries including France, Malta and Canada. There is also a big readership in Ireland.

Any issues which arise can be answered on an individual basis if you email me. I’m happy to receive questions from anywhere but my real expertise relates to the UK and Spain.

I am happy to take suggestions from readers about future articles. Please email me with your own ideas or issues that you think need raising.

REMINDER from Financial Pages in Spain

I’ve owned property in Spain since 2002 and hate to think how much I’ve wasted on exorbitant bank charges on foreign exchange of the years!

So I’ve linked up for a new foreign exchange service. It is available in any major currency around the world but doesn’t offer cash transactions. This is a bank to bank arrangement and is priced to beat the major banks.

But you can test it for yourself! Get a quote from your normal supplier, and then get a quote from La Torre Fx.

Even on a transfer from the UK branch to the Spanish branch of my own bank, I made a big saving using La Torre Fx. It costs nothing to get a quote. But if it’s a better deal for YOU the application process is quite straightforward. Check here

Thank you for previous feedback and requests for referral. I’m looking forward now – June is my favourite month of the year in Spain


David Goodall
Financial Pages in Spain