Friday, 22 May 2015

Our Spanish Dream - Part 25: Keeping it Legal

Our Spanish Dream - Part 25: Keeping it Legal


Taxation is always a tricky subject. I’m not going to try and advise you on what you should pay, just that you should be declaring your income in both Spain and the UK if you are renting out your Spanish home and are a UK tax resident. The Spanish are slowly catching up with illegal renters and fining them for non-declaration and non-payment of tax.
We had always wanted to do things legally, but persuading our fiscal rep to do it was another matter. For years the ‘black economy’ had flourished and the Spanish tax authorities had largely ignored the situation. The financial crisis would change all that.  Post 2008 all European governments have chased unpaid taxes however they can, and not declaring your income in Spain carries high fines. The rules have changed in both countries over the past few years so do seek proper qualified advice on tax. The short version is that you need to declare your income in Spain and after certain allowances have been deducted you will pay around 24% tax on the net earnings. As Spain and the UK have a dual tax agreement you can declare in the UK your earnings, less certain expenses (what is allowed is different in the two countries!), the amount of Spanish tax you have paid and the HMRC will not tax you twice on the same income. BUT you MUST declare the income in both countries.
In some regions of Spain you need to register a rental property, Alicante region is just starting this but as at early 2015 it isn’t necessary if you only own one house. I suspect this will change. In some regions there has been a registration requirement for many years and in others there is none at all. The bottom line is that it is up to you to make sure you are complying with the local laws and national laws in both countries - if you don’t keep it legal then don’t moan if you receive a fine!

Dave and Bev Spanish Dream Properties
Dave and Bev Townsend have two homes, their main one in Norwich and a second home in Playa Flamenca in south Costa Blanca, Spain which they also let as a holiday rental www.house-by-the-pool.comThey run a property finding business offering a free service for those seeking to buy a property in the Costa Blanca (Alicante) or the Mar Menor area of the Costa Calida (Murcia) www.SpanishDreamProperty.com. Bev has family in Spain and they intend to move there full-time in a couple of years.
 

Sunday, 17 May 2015

A great property on the Costa Blanca South

2 Bed 1 Bath
Semi Detached in Villamartin

Ref: 4297
Type: Semi Detached
Area: Costa Blanca South
Town: Villamartin
Beds: 2
Baths: 1
Pool: Yes
Price: €99,950
Description:  TOWNHOUSE WITH PRIVATE POOL 2 BEDROOMS 1 SHOWER ROOM, 1 WC FULLY FURNISHED KITCHEN COMMUNAL POOL EAST FACING
[Please click an image to enlarge]

 A great property on the Costa Blanca South
http://www.spanishdreamproperty.com/index.php?action=listingview&listingID=76948

Friday, 15 May 2015

Our Spanish Dream - Part 24: Lessons from the First Season

Our Spanish Dream - Part 24: Lessons from the First Season


Dave had worked in the boat hire business and in a four star hotel. We’ve stayed in great hotels and rented cottages and villas ourselves. So when kitting out our house we considered what we would like if we were renting - a real home from home in comforts but with a touch of Spain.
So what did we learn from our first season of renting out house-by-the-pool.com? Well, first was that most renters are lovely people who appreciate a well presented comfortable property and respect it, the community and the key holders. Most! There was a small element that did none of these. When we came to do the inventory at the end of summer we discovered some were happy to take ‘mementoes’ of the house home with them and some were happy to claim they hadn’t broken anything. 
Why did they want our towels or our pillow cases? Glad to say it was a minority. A couple of others broke a glass or mug and replaced it with two, which was kind and unexpected.
What we hadn’t realised when we first began advertising the house was that we would be able to fill it ten times over in August, so we could be fussy about who we had stay. We had already decided no hen, stag or student parties, but from here on we spoke to everyone and asked questions. The next year we turned away two or three enquirers and still filled the season. If a person wasn’t respectful to us the chances were they wouldn’t be respectful to our keyholder, our neighbours or the house.
That first season was a steep learning curve. We discovered guests like and expect British TV, internet access, a games console (and games), air conditioning in every room, a coffee maker and a hair dryer. They don’t like sweeping the floor, taking out the rubbish or using their own beach towels instead of the bathroom towels on sand!

Dave and Bev Spanish Dream Properties
Dave and Bev Townsend have two homes, their main one in Norwich and a second home in Playa Flamenca in south Costa Blanca, Spain which they also let as a holiday rental www.house-by-the-pool.comThey run a property finding business offering a free service for those seeking to buy a property in the Costa Blanca (Alicante) or the Mar Menor area of the Costa Calida (Murcia) www.SpanishDreamProperty.com. Bev has family in Spain and they intend to move there full-time in a couple of years.
 


Our Spanish Dream - Part 23: First Guests

Our Spanish Dream - Part 23: First Guests


So with the first bookings in the diary we sent our son and his girlfriend out to the house in the Easter uni break to try out the house.  We arranged with our keyholder that he would be treated just as a paying guest, and in return for his free holiday he had to do a full assessment of the house and set-up.  Amazingly he was very complimentary on what we had done and the information we provided.  He was able to make a few suggestions.  That first year we also had two friends visit, one with her grandchildren and one with her teenage son.  The feedback we received was really useful and we were confident we were going about things the right way.
Advertising is an expensive business and we trialled several online sites.  Costs for these varied from several hundred pounds a year to free, and completing all the information for each site was time consuming.  In the end our bookings came almost entirely from just two of the sites, none at all from the free ones.  It pays to use a site ranked high in the search engines.
We also used, and still do use, our own web site with lots of extra information www.house-by-the-pool.com
Since those early days we have made many changes, sought feedback from every renter and listened to suggestions.  We have changed most of the furniture inside and out, installed air conditioning in every room, replaced kitchen equipment, installed satellite TV and wifi internet and much, much more.
Finding the right keyholders is critical and has been a long-running issue.  We’ll cover that in other posts.  We changed fiscal/legal representation as our original firm were insistent that we didn’t need to declare our rental income in Spain as nobody else did.  Our new representation were happy to help us stay legal and help with the tax declaration.

 
Dave and Bev Spanish Dream Properties
Dave and Bev Townsend have two homes, their main one in Norwich and a second home in Playa Flamenca in south Costa Blanca, Spain which they also let as a holiday rental www.house-by-the-pool.comThey run a property finding business offering a free service for those seeking to buy a property in the Costa Blanca (Alicante) or the Mar Menor area of the Costa Calida (Murcia) www.SpanishDreamProperty.com. Bev has family in Spain and they intend to move there full-time in a couple of years.
 

Sunday, 10 May 2015

Our Spanish Dream - Part 22 Other People's Errors

Our Spanish Dream - Part 22 Other People's Errors

    
I could write a book on this one!  Perhaps the most common error is buying in the wrong place.
We had friends who visited relatives living an hour's drive inland and were shown a plot of land by a local on which they could build their dream home.  Assuming they had just put down a deposit, I suggested they talk to their lawyer because if the plot was outside the village they would need 10,000m2 to be able to seek planning permission to build a property in that area and the plot was 6,000m2.  They didn’t know; they had believed the local man and paid for the plot in full in cash while on holiday!  They were under the impression that the Notary would advise them about planning matters but the Notary’s job is to check the sale is legal, not advise the buyer.  They hadn’t used an independent solicitor and they hadn’t used a property finder.  And despite having planned to be part of a large ex-pat community in the sun they had, on impulse, bought a large ‘goat field’ up a mountain where it snows for two months of the year.  Several years on and they still hadn’t re-sold the plot.
Friends of my parents sold their Spanish house and had to re-buy in a hurry.  They bought a place with a great view but no amenities and the wife doesn’t drive.  Buying a rural property is fine if you are in good health and both drive.  The plots are large and often have citrus or olive trees, or old vines to tend.  If your health fails or you become unable to drive you may find selling your rural property takes a long time.
The rules are simple: talk through your needs/wishes with someone experienced in Spanish property, take your time to assess the suitability of the properties you like, use an independent lawyer (absolute must), do your homework and think of the long-term.
At Spanish Dream Property we love helping people find their right dream property.

Dave and Bev Spanish Dream Properties
Dave and Bev Townsend have two homes, their main one in Norwich and a second home in Playa Flamenca in south Costa Blanca, Spain which they also let as a holiday rental www.house-by-the-pool.com   They run a property finding business offering a free service for those seeking to buy a property in the Costa Blanca (Alicante) or the Mar Menor area of the Costa Calida (Murcia) www.SpanishDreamProperty.com Bev has family in Spain and they intend to move there full-time in a couple of years.

Friday, 8 May 2015

Our Spanish Dream - Part 21: The Rain in Spain….

Our Spanish Dream - Part 21: The Rain in Spain….

….falls mainly in the mountains!  Don’t be fooled into thinking that all Spain is wonderfully warm in winter.  There are ski resorts in the south of Spain but not in the south of England.  Within Europe, Spain is second only to Switzerland in the percentage of its land that is covered by mountains.  Madrid is the highest capital city in Europe.  The Costa Verde (Green Coast) is so-called because it has lush green countryside, so it rains - a lot.  Much of Spain’s mountainous interior is pretty empty, unless you count wild boar and birds of prey.
So if you are looking for winter warmth you head for the south or south eastern coasts.  If you like to wear your winter woollies you go inland or north.  The mountains are beautiful and majestic; in the summer they are bathed in sunshine, in the winter often shrouded in cloud, the higher regions white with snow.  We visited Granada in May, it was 25 degrees near Malaga but 15 degrees in Granada, above the city the peaks still draped in winter’s white coat.  In January the Costa De La Luz on Spain’s south west coast can be battered by Atlantic winds, and the storms of the Bay of Biscay can wreak havoc with the ferry timetables into Bilbao in northern Spain.
So, my message?  Choose wisely where you buy.  The Costa Blanca to the Costa del Sol are popular destinations for ex-pats seeking the sun for obvious reasons.  They don’t suit everyone and in places are very built-up or commercialised, but you can still find a quiet corner or buy close to one of the numerous national parks if you don’t want tourists. 
But the fact is that most ex-pats seek out other ex-pats and like to be able to buy a box of Tetley tea bags and a newspaper where the clues for the crossword are in a language they understand.

Dave and Bev Spanish Dream Properties
Dave and Bev Townsend have two homes, their main one in Norwich and a second home in Playa Flamenca in south Costa Blanca, Spain which they also let as a holiday rental www.house-by-the-pool.com   They run a property finding business offering a free service for those seeking to buy a property in the Costa Blanca (Alicante) or the Mar Menor area of the Costa Calida (Murcia) www.SpanishDreamProperty.com Bev has family in Spain and they intend to move there full-time in a couple of years.

Thursday, 7 May 2015

Our Spanish Dream - Part 20: Doing The Sums

Our Spanish Dream - Part 20: Doing The Sums

    
So, you have managed to save / beg / inherit / borrow for the dream holiday home in the sun and you have settled on Spain as your location.  What next?  Buying in Spain is not quite like buying in the UK.  The biggest shock to most people is the tax payable.  IVA (Spanish VAT) is paid on new properties for which levels are set by central government and at the time of writing (early 2015) the rate is 10%.  If the property is re-sale then Transfer Tax (ITP) is due instead, for which the rates are set by regional government, and these can change with very little warning.  We find property in the Alicante and Murcia regions.  At the time of writing the tax rates are 10% and 8% respectively.  Cheaper properties are not excluded from this tax.

In addition you will need to allow for legal costs – your independent solicitor (do NOT use an in house one!), Notary fees, Land Registry and other sundries such as your NIE’s.  These can amount to 3,000 to 4,000 euros.
Spanish mortgages were scarce during the property crisis but are now available again to those meeting strict lending criteria.  Taking out a mortgage in Spain is another expenses business, usually costing several thousand euros.
You may have heard of people receiving additional tax bills after buying a house because they got a bargain price.  This needs to be discussed with your solicitor at the time of purchase as there is insufficient room to cover the matter here.  You are welcome to contact us if you are concerned.
Because of the sheer costs involved in buying and selling in Spain it is very important that you get the choice of property right, buying the wrong property or in the wrong location is a very costly mistake.
That’s where we come in – Spanish Dream Property helps you get it right first time, and that matters!

Dave and Bev Spanish Dream Properties
Dave and Bev Townsend have two homes, their main one in Norwich and a second home in Playa Flamenca in south Costa Blanca, Spain which they also let as a holiday rental www.house-by-the-pool.com   They run a property finding business offering a free service for those seeking to buy a property in the Costa Blanca (Alicante) or the Mar Menor area of the Costa Calida (Murcia) www.SpanishDreamProperty.com Bev has family in Spain and they intend to move there full-time in a couple of years.

Monday, 4 May 2015

Our Spanish Dream - Part 19: Blood, Sweat and Broken Bones

Our Spanish Dream - Part 19: Blood, Sweat and Broken Bones


We arrived for February half term week 2007 with giant bags; you could still fly with 25kg bags then without penalties.  We had sourced loads of discounted goods for the house and set to work.  Although we had cleared most of the rubbish on our previous trip, the serious sorting and cleaning started here.  With our web site up and running and our first bookings taken we needed to get it finished.
We scrubbed and cleaned every surface and cupboard.  We threw things out - a broken tv hidden in a wardrobe, torn and old bedding, giant paper fans that had been hung on the walls, (the only extra d├ęcor in the house), a broken hi-fi cabinet, oddments of cutlery, chipped plates and glasses, old mugs, old towels and endless sundry items.  The marble surround on one of the wash basins was broken so a new one ordered at a very reasonable price.  We found some good value DIY shops, second hand places and discount shops.  The washing machine was broken and even still had wet and rotting towels stuck inside it!  The new one was purchased and to my amazement the shop was happy to take away the old one for a very small fee (complete with towels!).
We fitted curtain rails, hung voiles, hung pictures, bought sofa throws, lamps, mugs, crockery, glasses, cutlery and bedding.  We rearranged what little outside furniture there was and bought more – it was plastic but all we could afford.  (It would be replaced over time.)  We scrubbed the balustrade, terrace, balcony and solarium.  We painted grills.  We stayed up late into the night and rose early to carry on.  We had to get it finished.
Finally, on the final evening it was ready to photograph properly.  We had packed already as we were leaving early the following morning and had taken the outside shots earlier.  Dave moved from room to room taking photos.  I moved the cases out of the way for a photo of the downstairs bedroom to the doorway of the shower room.  Dave took the photo, took a couple of steps back, and turned without looking, lost his balance and fell over the small case into the shower room!  He put his free arm out to save himself but hit the side of the wash basin on the way down.  He was badly winded and in pain all night.  It was only once we were back in the UK and he went to the doctors that he discovered he had broken two ribs on the wash basin!
 Before                                                                 After