Considering that in Spain, people most generally prefer to purchase their houses rather than renting them, one might think that this option is more profitable for us.
It is, in fact, the uncertainty of the markets which may make us to want to find a better choice to invest in, and the purchase of a house emerges as a right option, even more so considering that the purchase of a property for its subsequent rental is on the rise in recent months.
The smaller size apartments seem the most interesting ones, and in most province capitals, the average size is around 55 square meters. Nonetheless, there are also exceptions, such as Lleida, where the average flat for sale has around 160 square meters.
Obtaining the higher profitability out of an investment depends heavily on a number of factors that we must keep in mind when buying a property for, afterwards, renting it, such as if it has an elevator or how many rooms it has or the condition of the house.
The cities that show higher profitability and a significant positive trend with respect to the previous year are Madrid, Málaga, Valencia and Alicante.
The housing shortage in the capital city centres makes people increasingly interested in buying in the ‘suburbs’; this is what happens, eg, in Madrid. In the case of Barcelona, the interest is also shifted to residential areas such as Baix Llobregat and Vallés. Valencia and Alicante, though, have very competitive prices in their downtown areas and Málaga is noteworthy due to the relevance of its district of La Malagueta.
To avoid unnecessary risks, best advice is to resort to the help of experts. They will assess all the data and will recommend you the most suitable investment to your profile and to your needs.
In Spain, any foreigner can acquire a property in the same way a Spanish citizen does, however, a non resident person needs to meet several other requirements to carry out the operation
Firstly, it will be necessary to have the Foreigner Identification Number, which can be obtained in both the country of origin and Spain. Otherwise, it´s not necessary to have an account in Spain, but by opening one, the purchase management can be much easier.
The purchase of a house is charged with several taxes:
The Value Added Tax (VAT), in case of new houses or first transmission (10%).
The Property Transfer Tax, in case of second-hand residences or second transfer. The tax rate in Catalonia is 10% if the property value doesn´t surpasses a quantity of 1.000.000€ (it would be 11% from here on out). It must be paid in case VAT is not applied in the transfer.
Documented Legal Acts Tax. It must be paid in case the house is purchased and VAT is applied and if is purchased by means of a mortgage.
In addition, there are several other expenses to take into account, such as the Public dead in the notary and the registration of the deed in the Property Registration Office. In case it´s necessary to request a mortgage, both the valuation and public notary must be included within the mortgage taxes.
Over the year, it would be necessary to face other taxes too: Real State Tax, the Wealth Tax– as the case may be-, Personal Income Tax or, if the foreigner doesn´t live in Spanish territory permanently, it will be necessary to pay the Non Resident income tax.
In order to avoid any further complications, the ideal would be to put oneself in a property agent´s hand, since this person will guide you during the whole process. From the choice of the more suitable house for you to make easier any purchase – selling procedure.
The NIE (Número de Identidad de Extranjero) or Foreigners’ Identity Number is a unique and exclusive personal identification number assigned to foreigners who have economic, professional or social interests in Spain.
Foreigners can apply in person to the Directorate-General of the Police, directly or through Spain’s consular offices abroad.
It is easier to obtain the NIE in the country of origin, preferably requested one to two months in advance. One only needs to contact the embassy and once the appropriate documents have been sent and the application has been processed, the NIE will be sent to your home.
To apply for the NIE in Spain, it is necessary to first arrange an appointment, both for citizens from inside and outside of the European Union.
The documents necessary for an NIE application for citizens of the European Union are the following:
Proof of prior appointment
Passport or identity document from your country of origin (copy and original)
Form EX-15 of application for the NIE.
The completed and signed Modelo 790-012 form.
For citizens outside of the European Union, in addition to the aforementioned documents, must bring a certificate of legal registration.
In addition to this documentation and depending on the particular applicant, one may have to present additional documents to justify one’s NIE application, depending on whether one is working, studying or training.
It is very important to bear in mind when presenting documents from other countries, that they must be translated to Spanish or the joint official language of the region in which one is applying.
Once one is in possession of all these documents, one may visit the Directorate-General of the Police or a Foreigner’s Office (Oficina de Extranjería) to have the application processed.
The Golden Visa or Spanish Investment Residency, was created with the passing of the Entrepreneurs’ Law (Law 14/2013 of 27 September, to support entrepreneurs and boost internationalisation). The objective is to facilitate and simplify entry into and residence in our country through the provision of visas and residency permits, which are valid throughout the national territory, to foreigners from outside the European Union who are not entitled to the rights of free movement and residency and who purchase property located in Spain. Where this is the case, the investor acts in the capacity of a normal or legal person.
One of the defining characteristics of these visas and permits is that by reducing the periods of time taken by the relevant authorities to provide them, the acquisition process should be streamlined for non-EU investors who satisfy the requirements of Law 14/2013.
An investor will be entitled to request a property investment visa, which will be sufficient to allow residency in Spain for at least one year. Investors will also be able to request visas for a partner and any children under the age of 18 or who are over this age but economically dependent on the main investor.
In order to obtain the visa, the applicant must prove complete ownership of property in Spain of a value equal to or greater than €500,000, in addition to fulfilling the general requirements of entry and residency for foreigners who do not intend to engage in paid activities.
The initial residency permit for investors will last for two years. Once this period of time has elapsed, any investors wishing to remain in Spain can request a renewal of the investor residency permit for the same two-year period.
We sold our property in Spain with the help of the agency re-d realestate-dreams Barcelona and we were outstandingly happy with their service. We dont speak Spanish, the inheritance of the property had to be organized at a Spanish notary, we did not have the tax number and no knowledge about Spanish laws. They managed the deregistration at the authorities, cancellation of accounts at the banks, helped us with applying for the tax number at the consulate and with finding a suitable translation service. We were always in touch with them and they were always there at the agency to help us with any questions. Without the qualified and time consuming help from Mrs Bayne we would have not been able to handle this difficult sale. (Annette Brill, 2013)
My experience of the service provided by Re-d realestate-dreams on purchasing my flat in Barcelona was totally satisfactory. Throughout the initial stages of identifying and locating the flat, I felt accompanied by their friendly approach and careful attention to detail. They took note of all my requests and their dedicated professional team subsequently provided me with a wide choice. Their ample experience in the sector together with an active use of the latest technology provides a service that is highly efficient and totally recommended. (Judy Adkins, 2015)
We particularly appreciated that we were shown properties corresponding to our tastes and special requirements and not only the standard houses that provided better chances of a sales commission. Although most buyers wanted a modern house on the seaside with a pool, Anne listened to us and thanks to her we bought a charming village home 120 years old, which we simply adore (Denis Broun, 2015)
I felt very good advised by Mrs Bayne throughout the whole process. She was always there for me and very professional. (Gisa Kohler, 2017)
We are very very happy with yours and Peters service and help. Very uncomplicated and quick. Questions are answered fast and there is always somebody to help. Very friendly as well the help with local craftsmen etc. Very good after sales service which made us happy. (Simone Donauer, 2017)
Wer are very happy with your work, efficient, fast, very professional and helpful. We gladly recommend you! (Paul Robin, 2015)
We immediately felt in good hands and found a house despite heavy time pressure which became a real home to us. (Claudia Schweikert, 2010)
Majorca is struggling to deal with a huge influx of visitors, with numbers increasing each year. There is a shortage of affordable housing in the main urban areas, a situation similar to that on the mainland. In an attempt to stem the flow of rented properties being let out to tourists—meaning that these properties then are then missing from the normal rental market—the Balearic government has for some time now been working on a new set of regulations to address this problem. At the beginning of September, they finally passed new legislation governing the letting of properties for tourism. The key changes are as follows:
First of all, a moratorium of one year has been imposed on the issuing of new licences. It is now forbidden to let out flats, even if you have a licence, until the responsible local authorities have issued details of the zones in which such rentals are to be allowed. As far as houses as concerned, there is for the time being no change, whether they are detached or terraced properties, as long as the owners are in possession of a licence. This will continue to be valid even if the property is not located in a prescribed zone.
There are also plans for the letting out of flats to holidaymakers to be allowed for 60 days per year, with the following stipulations: the flat must be the main place of residence of the landlord, it must lie within one of the prescribed zones and, if the property is jointly owned, the majority of the owners must have given their consent to the property being let. The goal here is to strengthen the sharing economy and to offer an opportunity for low income groups to top up their income.
The moratorium of one year also applies here when it comes to applications for licences. No further applications may be made before this period has expired.
In an attempt to prevent property speculation, the new law restricts owners to letting out a maximum of three properties.
The local authorities now have 12 months’ time to draw up the boundaries of the new zones, to determine which zones properties may be let out in and for how long. Some districts will in any case apparently be classified as being “in a state of housing crisis”; in these areas, all types of holiday lets will be forbidden as these are areas where the old-established population has difficulties finding access to housing.
It will in future only be possible to apply for a licence within certain designated zones.
When a licence is issued, a register number will be allocated to the licence holder and this must then be quoted when advertising the property on platforms such as Airbnb. If the register number is not quoted, the landlord may be fined up to € 40,000 and the platform itself can face fines of as much as € 400,000.
There will be no increase in the total number of licences to be issued. In future, it will only be possible to apply for a new licence if an old one is being surrendered. At the last official count, there were 435,707 licences in existence in Majorca. It is likely that the upper limit will be set below this figure.
In order for a new licence to be granted, there have up to now been certain requirements, such as the presentation of a certificate of habitability, the taking out of a personal liability insurance policy covering an insured sum of at least € 300,000, a modernisation plan, an energy certificate, etc. This will in all probability continue to be the case.
The effect of the new law can already be seen on Majorca – in the light of the steep fines which they may face, the first cases have been witnessed of landlords cancelling bookings made by holidaymakers.
We are interviewing Moisés Ruiz, the director of CENIC (a forum for professional training and consulting in the real estate sector) and leader of several MLS associations in particular the ACTIVAT MLS of Barcelona. Beside, Moisés is founder of the Fecinmo (Federación Empresarial de Cooperación Inmobiliaria) and the ASI (Acción Social Inmobiliaria) as well as consultant of the Ampsi (Asociación de Mujeres Profesionales del Sector Inmobiliario).
Moisés, let’s talk about MLS. What is MLS?
MLS means „Multiple Listing Service“ and is a real estate system of sharing exculsively selling contracts among all professional agents that are member of the MLS. The idea is simple: The agents share the comission equally, 50% for the agent representing the seller, 50% for the agent representing the buyer.
Is this something new?
Not really, the concept of MLS already exists over a 100 hundred years and was invented in the US. In North America almost 90% of the property sales are realized within MLS groups. Today MLS can be found in Canada, Mexico, Argentina and Brasil, but also in Europe, in France, Italy and Spain. In Spain there are already over 70 MLS and first steps have been taken for creating a Spanish state federation of MLS.
What is special about the ACTIVAT MLS Barcelona?
ACTIVAT is outstanding due to its 15 years of experience and high amount of colaborating agents. Today over 120 independant and franchise agencies have joined ACTIVAT, with about 750 real estate experts working together based on one ethic code, equipped with the latest technology and trained in modern selling and marketing techniques.
What advantages do I have as a seller?
When an owner contracts the sale of his property with an agent who is member in the ACTIVAT MLS, he is also commissioning his sale at the same time to all real estate experts of the same MLS, supervised by the agent with whom he has the contract. The advantages are obvious:
Accelerate the sale: Publishing and advertising of the property is multiplied by the high amount of agents
Wider and deeper service: The contract with an ACTIVAT agent gives the owner a guarantee of an exclusive service by the agent. The structured collaboration within the MLS creates a real relation of representation between agent and seller.
The combination of exclusivity and MLS gives the agent more possibilities to invest in new and unusual marketing which might make the difference for finding the best buyer.
ACTIVAT agents are continuously trained in different areas which also benefits the seller:
Photographical presentationSale concept plan
Advertisement of the property in over 30 portals and other real estate websites
Legal and fiscal consultancy
Purchaser and investors index
After sale services
What advantages do I have as a buyer?
In all ACTIVAT agencies you will find a large amount of properties offered in your area. You receive all information you need fast, comfortable and transparent at a glance. The possibility of finding the house which fits your requirements is obviously higher by visiting only one office of an MLS agent.
Information quantity: In ACTIVAT you have access to an exclusive offer of properties for sale in your area, managed by all member agencies. This helps greatly in preselecting and optimizing time for viewing properties.
Information quality: All properties offered through ACTIVAT have the same selling terms & conditions, independent of the agency they is represented from. This gives you the best transparency of the market.
Legal security: For all properties there is always a written mandate by the owner. This includes all legal information such as the register and the urbanistic situation.
ACTIVAT agents are continuously trained in different areas:
Legal and fiscal consultancy
Selling current property for purchasing a new one
Management of guaranteed rentals
After sale services
And how does this work in practice?
It is more than simple. Buyer as well as seller always deal only with their selected ACTIVAT agency. Viewings, negotiations and questions are always organized and managed by your personal contact person.
Thanks for your time and those detailed informations, Moisés. If you are interested in selling or buying a property via the ACTIVAT MLS, please contact us here.
Entrevista con Nadja Vietz, abogada con oficina en Barcelona (www.harrisbricken.com). Nadja es acreditada como abogado en Alemania, España y EEUU y entre otros experta en derecho inmobiliario y en herencia internacional.
Nadja, muchos de nuestros clientes tienen un inmueble en España pero su primera residencia esta en Alemania. Esta situacion causa muchas inseguridades en relacion a los aspectos legales de legar y dejar en herencia un inmueble.
Generalmente, que derecho de sucesión es valido?
Hasta ahora la ley Aleman dijo, que el derecho de sucesión de una persona se dirige por el derecho del estado, del cual es nacional el testador en el momento del fallecimiento. Un testador Aleman podía estar seguro que su sucesión se dirigirá sobre la ley Alemana.
Esto cambió el 17 de Agosto del 2015. Según el decreto Europeo de ley de sucesiones nº 650/2012 toda la sucesión en derechos por fallecimiento se rige por la ley del país en el cual el testador tenía su residencia habitual en el momento del fallecimiento. La residencia habitual es el lugar o país donde el fallecido tenía su centro de vida. No cuenta como temporal una estancia si existe la intención de vivir al menos 6 meses interrumpido, no cuentan pequeños interrupciones. Puede ser complicado de determinar la residencia habitual porque ya alterar con la mudanza a otro sitio. También son complicados estos casos en los que una persona vive regularmente en diferentes sitios y tiene en todos relaciones sociales importantes.
Quien no puede descartar un cambio de su residencia en el futuro y al mismo tiempo quiere transmitir algo en herencia según la ley de su país, debería recurrir a la posibilidad de usar la elección de la ley aplicable tal como esta previsto en el decreto sobre la ley de sucesiones de la UE, para evitar malas sorpresas y demoras en el proceso. La elección de la ley aplicable tiene que resultar expresamente de un disposición testamentaria – en la mayoría de los casos es un testamento escrito a mano o notarial – o por lo menos debe resultar de la disposición. Una elección de ley aplicable se puede hacer en todo momento. Pero también si ya hay un testamento se tendría que examinar y en su caso hay que añadir una cláusula de elección de ley aplicable para que en todo caso se aplica la ley Alemana.
Debería hacer un testamento Español? Que forma debe cumplir?
El otorgamiento de un testamento delante de un notario Español puede ser razonable después de un asesoramiento profesional, además porque el testamento Español solo tiene que incluir el patrimonio en España. Si hay un testamento en Español que también cumple los requisitos formales aqui, se puede evitar sobre todo la necesidad de la traducción jurada de documentos Alemanes como por ejemplo el certificado del heredero o del testamento que además tienen que conseguir la apostilla de Haya en el tribunal provincial correspondiente.
Esto facilita el tramite de una sucesión hereditaria y es importante sobre todo porque hay que pagar el impuesto de sucesiones Español dentro de 6 meses después del fallecimiento del testador. Para esto es necesario la aceptación de la herencia ante el notario, esto significa para resumir que se puede ahorrar tiempo en tramites con las autoridades en España si ya existe un testamento Español.
Pero el testamento Español debe estar redactado de una manera que no revoca un testamento que puede existir ya en Alemania. Al mismo tiempo hay que prestar atención a que testamentos Alemanes no revocaran el Español si se hicieran en el futuro. El testamento Español además tiene que ser otorgado por un notario y registrado en el registro central de ultimas voluntades en Madrid.
En general el otorgamiento ante notario de un testamento Español solo hay que hacerlo después del asesoramiento con un abogado Aleman para evitar errores en el contenido según ley Alemana y para evitar el uso de conceptos juridicos falsos que pueden dificultar el tramite posterior de la sucesión. No se aconseja la creación de un testamento a manuscrito porque se necesita un certificado de heredero para su aceptación en España y para transcripciones en el registro.
Que más uno puede hacer para ayudar sus herederos? Que hay que evitar?
En la creación del testamento Español hay que prestar atención a no agravar los requerimientos para aceptar la herencia según Ley Española. En rigor no es necesario esta aceptación de herencia si en el testamento Español se incluye la elección de la ley Alemana. Pero en la practica tanto el notario Español como las administraciones publicas van a exigir esta aceptación de la herencia notarial.
En la aceptación de la herencia se van a asignar los sujetos de patrimonio por separado si hay varios herederos. Este documento – junto con el testamento notarial – autoriza a cada heredero frente a las administraciones Españoles y frente al registro de la propiedad donde se puede conseguir después de haber pagado el impuesto de sucesiones, la transmisión de derechos de dominio o en bancos Españoles, el reintegro de saldos.
Todas las personas que están nombrados como niños o personas legítimas tienen que firmar la aceptación notarial de la herencia. Esto puede ser complicado porque ha veces no hay contacto entre las personas nombradas por lo tanto puede ser un obstáculo infranqueable la invitación a la firma notarial preparada. Por lo tanto hay que limitar el testamento al nombramiento de personas necesariamente considerables tal como lo permite también la ley Alemana de sucesiones.
En este contexto hay que anotar que solo con el otorgamiento de un testamento Español no se hace ninguna prevención fiscal en relación a la posible reducción de la carga fiscal en España que es parcialmente muy alto. Para esto hay que buscar asesoramiento para que se puede tramitar la herencia en una forma que ahorra tiempo y dinero. Para esto hay que comprobar si el testamento esta creado en una forma razonable en relación a los altos impuestos de succiones en España. El testamento „Berlinés“ que es muy popular en Alemania puede resultar en una imposición fiscal alta evitable en España. También hay que planificar bien el nombramiento de más familiares o de la pareja de hecho porque esto puede llevar a altos impuestos de sucesiones sin importes exentos.
El poder transmortal o postmortal que es posible según ley Alemana puede llevar a dificultades en la practica. La ley Española es aplicable si estos tienen que ser validos en España. Pero según esta la validez caduca con el fallecimiento de la persona que otorga el poder! Se puede usar en forma limitada de ella después del fallecimiento del testador en España, solo si el poder incluye una elección de ley expresa.
En la practica no se va a aceptar un poder de sucesión en España por lo tanto es muy importante de planificar la creación del testamento de forma inteligente. Al mismo tiempo hay que considerar de hacer poderes de prevision, de asistencia y un poder de paciente en España. Un poder de prevision sirve para autorizar una persona de confianza para el caso que uno no puede arreglar ciertos asuntos. Esto puede ser muy razonable para patrimonio existente en España. Este poder no puede tener carácter general según ley Española sino que tiene que alistar los poderes uno por uno. Para usarlo en España tiene que ser otorgado delante notario.
Que tengo que tener en cuenta yo o mejor dicho mi heredero en relación al impuesto de sucesiones?
El tratamiento fiscal para el impuesto de sucesiones Español tiene efecto bien al patrimonio en España o – si el heredero tiene su residencia también en España – bien al patrimonio global del heredero. Los herederos deben hacer la declaración del impuesto de sucesiones sobre el patrimonio existente en España dentro de 6 meses. No hay un convenio de doble imposición entre Alemania y España en el impuesto de sucesiones pero el impuesto de succiones pagado en España se puede deducir en Alemania.
Las tasas de impuesto de sucesiones Españolas pueden ser altas según grado de parentesco, valor de la herencia y patrimonio del heredero y los importes exentos son relativamente bajos comparecido a Alemania. La regulación del impuesto de sucesiones con cargas fiscales extremamente altos para no residentes ha sido declarado invalido en la resolución del Tribunal de Justicia de la UE del 3 de Septiembre del 2014. En especial el Tribunal ha declarado ilegal la normativa que dicta la aplicación de ley Española a ciudadanos Europeos con residencia fuera de España en vez de la ley de cada comunidad autónoma. Esta normativa resultaba en un tratamiento discriminatorio de ciudadanos Europeos porque no podían aprovecharse de degravaciones fiscales y excepciones de las diferentes comunidades autónomas. Según la comunidad autónoma es posible de aprovecharse de desgravaciones fiscales pero algunas comunidades ya han expedido diferentes tasas de impuestos para residentes y no residentes.
Se puede reducir el impuesto de sucesiones Español con una planificación buena y con una formulación hábil del testamento. Diferentes situaciones de vida requieren diferentes soluciones.
Hemos escuchado que algunos ya inscriben sus herederos en el registro de la propiedad cuando compran un inmueble? Tiene sentido esto? Es posible quizás de donar mas adelante?
Esto puede tener sentido para evitar pagos altos de impuesto de sucesión en España y para aprovechar importes exentos del impuesto de patrimonio. Pero hay que evitar que esto representa una donación en España porque conlleva gravacion con impuesto de donación. La donación a la mejor se realiza en Alemania aprovechándose los limites de exentos del impuesto, siempre respetando las formalidades. En consecuencia los importes necesarios para la compra del inmueble tienen que proceder de cuentas bancarias de los herederos para que ellos pueden figurar como compradores en la compraventa.
Si se transmite la finca más adelante, habra que pagar impuesto de donaciones. Los exentos de impuestos existentes en Alemania para donaciones entre familiares no existen en España. Sin duda la donación entre familiares tributa de forma moderada en España no obstante es esencial una planificación de impuestos. También hay que tener en cuenta que en caso de donación hay que pagar impuestos sobre el incremento del valor del inmueble por separado.
Muchas gracias por la información. Como y donde te podemos contactar para un asesoramiento legal?
Lo mejor a través de email@example.com o teléfono 933 041 123, o con cita previa estoy disponible para un primer asesoramiento en nuestras oficinas en Calle Balmes 30, 2-2 en Barcelona.
Interview with Nadja Vietz, a lawyer with an office in Barcelona (www.HarrisBricken.com). Nadja Vietz has German, Spanish, and American lawyer’s licenses and is, among other things, an expert in real estate and international inheritance law with a Spanish-German reference.
Nadja Vietz, many of our clients own property in Spain, but have their main residence in Germany. This situation brings up a lot of insecurities regarding the legal aspects of passing on and leaving properties.
Which inheritance law applies in the first place?
Until recently, German law applied the law of nationality to any cross-border estate cases. A German testator could be certain that German law governed his succession.
This changed on August 17, 2015. According to the EU Succession Regulation (EU Regulation No 650/2012 or Brussels IV), the country in which the testator had his last habitual residence at the time of his death rules the whole legal succession after the death. Article 23 of the Regulation determines “habitual residence,” assessing the circumstances and the center of life of the deceased during the years preceding his death and at the moment of death. Different criteria are to be taken into account, in particular the focus of the family, professional and social contacts, as well as the duration and regularity of the deceased’s presence in the state concerned and the reason for that presence. A close and stable connection to a certain state constitutes habitual residence in that state. Any intentional stay for more than six months will have to be considered habitual residence. The determination of habitual residence can be difficult because it can change the moment someone changes his residence. The same difficulties arise in cases where someone lives for regular periods in different places and maintains close ties to each location.
So, anyone who lives abroad or plans on doing so in the future but also wants national law to apply to his inheritance should make use of the option of choice of law made possible by Brussels IV in order to avoid bad surprises and disputes among the heirs, and the accompanying legal uncertainty and delay.
This choice of law must be made by a provision included in a person’s will (hand written or by notary’s public deed), and can be done at any time. Even if a person has a will, he or she might want to check the old will and, if necessary, supplement it by a choice of law clause in order to avoid any bad surprises.
Should I make a Spanish will? Do I have to pay attention to certain formalities?
After careful review by an experienced advisor, signing a will in front of a Spanish notary public can prove to be useful, especially since it is possible to have the Spanish will cover only the assets located in Spain. The existence of a will drafted in Spanish, which also complies with the local formal requirements, helps to avoid having to provide certified translations of all German documents, such as the certificate of inheritance or German will, which would also need to be provided with the Hague Apostille.
This facilitates the execution of a cross-border estate and is particularly important because the Spanish inheritance tax is payable within six months after the death of the testator, which requires a previous declaration of acceptance of inheritance. The existence of a Spanish will signed in front of a notary avoids all kinds of bureaucratic and time-consuming formalities.
It is important, though, that the Spanish will not revoke an existing German will. At the same time, if a German will is created subsequently, it should not revoke the Spanish will either. The Spanish will furthermore needs to be signed in front of a public notary and registered at the Central Register of Testamentary Dispositions in Madrid.
However, signing of a Spanish will in front of a notary public that will be governed by German law should be done only after seeking advice from an experienced professional in order to avoid mistakes in applying German law concepts or the incorrect use of German legal terms or concepts, which could complicate matters when executing that will later.
We advise against hand-written testaments. In order to use such hand-written testament in Spain, for the acceptance of the inheritance or any amendments to public registries, the heir will need to apply for a German certificate of inheritance which needs to be provided with the Hague Apostille.
What else can be done to help the heirs? What has to be avoided?
When signing the Spanish will, you need to keep in mind the requirements for acceptance of the inheritance by public notary deed. When strictly applying the applicable German law to the will, such an acceptance is not necessary if the will is indeed governed by German law. Practically, a Spanish notary as well as any official authorities will require an acceptance of inheritance by the heirs that is signed by a notary public.
If there are several heirs, the individual assets will be assigned in the public notary deed of acceptance of inheritance. This deed – together with the notarized will – legitimatizes the individual heir in front of Spanish authorities. The property register makes any necessary changes in public registries and requests payment of bank balances, after having paid the Spanish inheritance tax.
Taking into account the practical aspects we need to also keep in mind that not only do the main heirs have to sign the acceptance of inheritance in front of the Spanish notary, but all children or forced heirs will have to as well. This could prove to be complicated since some of those heirs are not in contact with each other and it might become nearly impossible to summon all of those people to the notary signing. In the sense of speeding up procedure, it is therefore advisable to limit the will to the main heirs, as permitted by German inheritance law.
In this context it has to be noted that the notarization of a Spanish will alone does not equal any fiscal planning or lead to any possible reduction of at times high tax burden in Spain. Expert advice is recommended to accept the inheritance in a cost- and time-effective way. The “Berlin Will,” which is very popular in Germany, can particularly lead to an avoidable high tax liability in Spain. Naming any distant relatives or unmarried partners might also be inadvisable, as doing so can lead to high inheritance tax burden without application of any exemptions.
According to German law, this trans-mortal or post mortal power of attorney can lead to practical difficulties. If its purpose is to use it in Spain, Spanish law will necessarily apply to that power of attorney. However, according to Spanish law, the power of attorney expires at the moment the granting person deceases! Only if the power of attorney includes an explicit choice of law, in this case of German law, is it possible to make limited use of that PoA in Spain, even after the death of the testator.
In practical life, such a German post mortal power of attorney will not be recognized in Spain, which makes it even more important to carefully plan and create a will in an intelligent way. At the same time, one should consider granting general power of attorney to authorize a trusted person to take care of financial and personal matters, preventing circumstances in which the granting person will not be able to take care of Spanish assets anymore. This power of attorney needs to meet Spanish form requirements in order to be valid.
What do I, or better said, my heirs need to keep in mind regarding Spanish inheritance tax?
Spanish inheritance tax liability is established either for any Spain assets or – if the heir also has his residence in Spain – for all worldwide assets of the heir. It is important for heirs not to miss the 6-month deadline in which they have to file a Spanish inheritance tax return with Spanish tax authorities regarding any Spain-based estate assets. There is no double tax treaty regarding inheritance between Germany and Spain, but inheritance tax paid in Spain can be credited in the German tax return.
The Spanish tax rates can be high, depending on the degree of relationship, but the value of the inheritance and the estate and exemptions for children and spouses are low compared to Germany. A European Court of Justice ruling of September 3, 2014 declared the extremely high Spanish inheritance tax rules for non-residents invalid. In its ruling, the European Court of Justice declared the regulation invalid which foresaw application of Spanish law instead of the law of each autonomic region to EU-citizens with residency outside of Spain, and their estates in Spain. Such regulation led to discriminatory treatment of EU citizens with limited tax liability in Spain because they could not take advantage of the different tax reductions and exemptions that were applicable in each autonomic region. Those tax reductions are applied now to non-residents as well depending on the autonomic region. However, some of these regions already have enacted new laws with different tax rates for residents and non-residents.
Spanish inheritance tax can be reduced considerably with good planning and wise will drafting. Different personal situations require different solutions.
We heard that some people inscribe their heirs right at the purchase of the property in the property register? Does that make sense? Is it eventually possible to donate later on?
This could make sense to avoid high inheritance tax payments in Spain and to make use of possible tax exemptions. However, it is important that such registry of future heirs will not be considered a donation in Spain, which would entail gift tax liability in Spain. The donation should be made in Germany by using the German tax exemption amounts, and certain formalities have to be respected.
If the property is being donated later on, a donation tax has to be paid. The existing German tax exemptions for donations between family members that allow intelligent estate planning do not exist in Spain. Even though the donation between direct and close relatives is only taxed moderately, planning based on fiscal law is recommendable. Also, it must be noted that an increase of value of the property has to be taxed separately in case of the donation.
Thank you very much for this information. How and where are you best contacted to get legal advice?
Best by mail firstname.lastname@example.org or telephone +34 933 041 123. Upon agreement, I’m also available for a first meeting in our office in Calle Balmes 30, 2-2 in Barcelona.