Gecko Towers
Update 09.04.24: An announcement has been made by the leader of the Socialist Government in Spain, that his government plans to amend or repeal the “Golden Visa” legislation. Currently no timetable for these changes has been suggested and there is opposition to any revision. That said, this discourse, that started in May 2023, may result in some material changes. We will endeavour to keep you up to date with these as we are made aware of them and their precise impact.
The news that many travelers have waited to hear has finally arrived. With effect from 11th February 2022, the English Government will scrap COVID tests for fully vaccinated travelers arriving in England. It is anticipated that the devolved governments of the UK will follow suit. The result of this means that from February 11th 2022 fully vaccinated travelers will be free to return to the England without the need for any COVID tests.
There is also good news from the European Union. It has said to EU residents that those who hold Covid Passports will, with effect from 1st February 2022, be able to travel within the EU with no restrictions.
Broadly, UK visitors to Spain, who have neither come from or recently visited a “risk country”, need to show valid proof of being fully vaccinated at least 14 days prior to their arrival in Spain. On arrival they may still have to submit to a temperature checked. As from the 1st February 2022, a UK visitor arriving in Spain will only need to show that they have been fully vaccinated, no less than 14 days prior to their arrival in Spain, and that their second dose was administered no more than 270 days prior. If they fall foul of this latter criteria it will be necessary to prove that they have received a third booster shot.
Is this the “Great Unlocking” so often talked of in recent months?
An expression often attributed to US Founding Father, Benjamin Franklin, that scolds, “If you fail to plan, you are planning to fail!” It smacks of draining the fun out of a process until you need to remind yourself why you are doing it in the first place, but the sense in taking bite-sized practical steps cannot be overstated
When it comes to purchasing a Marbella property for holiday, full or partial re-location you really do need to compile a basic checklist of those things that need to be considered. And this is adviseable even before you even start pouring over location maps or the glossy photos on estate agents websites that accompany some very desirable properties that are available for sale.
There is an undeniable fact that when the “Great Unlocking” finally occurs, for months perhaps even years afterwards, there will be a spike in demand from the English-speaking market for their favourite location on the Costa del Sol. It should be noted that with a boom in recent months there are already some reports suggesting a shortage of property in certain sectors of the market. Naturally, it therefore makes most sense to prepare for your search if your idea of owing a home in the Marbella region is about to become a reality.
I am not an Estate Agent, although I know many reputable specialists in this market, who can supply you with exhaustive checklists, but my aim is to convince you to take early and manageable steps. For this process, I am going to assume – and these are deliberately generalized – that:
A. You and/or your partner are approaching retirement – as that concept may have taken on a myriad of differing meanings in the last couple of years,
B. You and/or your partner are in your 40’s and have a young family with a school age child/children, or
C. You and/or your partner operates an online business that allows you to choose precisely where in the world you wish to live.
D. You have some previous with the Costa del Sol from holidays in previous years at a family property or that owned by friends who made the decision to buy several years ago. You want to give your family and circle of friends the opportunity to enjoy the California of Europe for themselves.
Your likely rationale for buying will be multiple but it tends to boil down to a version of the philosophy that you have one life and you are obliged, if not compelled, to make the very best use of it. This may stem from a shifts in working patterns, the ceasing of businesses ties, perhaps selling a business or simply that you have grown tired of your current environment and maybe the weather. Whatever the reason your challenge is to seek out a new and comprehensively more fulfilling lifestyle.
Your Legal Status in Spain
If you are from the UK, you cannot fail to have noticed the impact of “Brexit” came to fruition in recent months. Previously your right to live and work in Spain was in the exercise of your sole discretion. This has been whipped away from under you. Now, without proper registration via one of the available Visas, a UK citizen, you can only legally remain in Spain, subject to a 90 day limit in any 180 day period. While this may be perfect for the occasional holidaying visitor it does present bigger problems if your plans involve relocation.
UK citizens are now regarded by the Spanish (and the rest of the EU) as hailing from a non-EU country. That is not to say they are unwelcome to come and live and work in Spain, far from it. However, to qualify there are inevitable Visa hurdles.
For those seeking to live in Spain but not wanting to pursue any economic activity in Spain and who can prove that they have sufficient funds and private health insurance a visa called a “Non-Lucrative Visa” is available. This is typically for a retirement-type relocation. Following a successful application a permit valid for one year will be issued, this can be renewed and may allow ultimately for an application for permanent residency.
It has been suggested, and various moves have been initiated by the Spanish authorities, to promote a form of visa for those who work remotely, with clients outside Spain. This is currently progressing through the Spanish legislature and is not expected to be in force for a while. See our previous blogs on this here New Spanish visa proposals aimed at attracting Digital Economy talent. and Are you ready to become a Costa del Sol Digital Nomad?
Self employment and the ability to establish yourself as a sole trader or to incorporate a limited company in Spain will provide some with a route to their relocation but the rules are quite complex and outside the scope of this general note.
It needs to be born in mind, whichever route is chosen, it is usual that the tax payer will need to declare in Spain for tax purposes on their worldwide income. We do appreciate that for many, not working is not viable.
If you have appreciable resources there is an interesting Visa alternative. For those keen to choose the Marbella region as the location of your new home the Spanish authorities have a viable option to allow you to buy and enjoy your property and also, if you wish, not make Spain your tax home.
The Golden Visa, introduced by the Spanish Government in 2013 following the Economic Crisis, is very attractive for those who need to be able to travel freely (an advantage also conferred by the Non-Lucrative Visa) within Schengen Group countries but also enjoy an unlimited right to live in Spain without necessarily making it your tax residency.
I have already blogged previously about the Golden Visa. You can see earlier posts here – Spain’s “Golden Visa” – and – Golden Visas – A Retrospective Our team are increasingly experienced in co-ordinating Golden Visa applications but the start point, for many, is making a managed and qualifying property purchase.
It doesn’t go without saying, but that if you are fortunate enough to be an Irish resident or the holder of an Irish passport, then most of the above becomes largely irrelevant. Your freedom of movement is preserved by Ireland’s continued membership of the EU.
Housing
You probably know from previous trips to the Marbella region, that this place is not called the “California of Europe” for nothing. Much of California is built in a neo-classical Spanish style with terra-cotta tiled roofs and colorful walls and Spanish is widely spoken. Comparing the two regions that are both blessed with amazing climates, sea, beach and mountain views suggests that they are really closer to being twinned.
Please see an earlier blog where the dynamics of the Marbella region are explored. Marbella is a great location – Why?
While the town of Marbella is a fabulous mix of an historic centre, with a working fishing port and surrounded by many modern property developments, it is not the only region that may appeal. Both to the East and West of town are a variety of stunning urbanizations where it is possible to identify just the right kind of property to suit your and your family’s needs.
Coming from Northern European to live in the South of Spain can deliver a little culture shock. Typically your current home’s weather, for at least four months plus a year, compels you to stay indoors, warm in a cozy environment with draft excluders and thick duvets. For maybe four to six weeks a year Marbella becomes chilly but rarely getting below 6 degrees C. For the rest of the year life is largely lived outside. In the garden, at the tennis/golf/riding club or at the beach. For these reasons seeking a substantial house is rarely as important as it may have been back home.
We made the mistake when arriving from the UK with a large removal truck carrying the contents of our UK house. Sofas, heavy wood dining tables, extensive all season clothes, bedding and endless boxes of books. We still read a lot but it may be sensible to “Maria Kondo” your possessions before you arrive in Marbella. You will be surprised! You’ll wear what are typically summer clothes back home for a lot longer than just July and August!
Property Funding
Many who plan to arrive under the Golden Visa scheme will need significant resources for their qualifying €500,000 purchase. There is, of course, nothing preventing them from obtaining a top-up mortgage loan to fund the balance of their purchase price provided they introduce €500,000 into the purchase.
The mortgage market is, as you’d expect, reasonably well established. Many banks and cajas (more akin to UK building societies), particularly those who have set their sights on capturing international clients, including Sabadell, BBVA, CaixaBank and Santander, provide mortgage funding for non-Spanish nationals.
Conditions and rates vary, as you’d expect, but it is usual for newcomer to be able to secure funding based on a maximum of 60% to 70% loan to value. So with house prices already quite high it will be necessary to introduce a decent handful of Euros towards your purchase. The “skin in the game” nature of Spanish lenders is intended to ensure that you will lose – perhaps disproportionately and painfully – if you default on your mortgage obligations.
There are several excellent mortgage brokers if you feel daunted by presenting your mortgage case directly to the bank’s employees. In the quarter century that I have known this coast, I am amazed how the quality of spoken English has improved in all manner of points of contact and bank officials are no exception. They are very used to dealing with foreign clients and will let you attempt to converse in Spanish but will impress you by the quality of their English.
Education
For those seeking to fully relocate – and I can attest to the sense of doing this – arriving with children who are just entering primary or needing to continue their education presents a challenge for some families. Choosing the right school for your child is vitally important for their social and educational development. It may be that your child has an ear for languages and they will quickly assimilate into a local school where many have experienced teachers who sympathetically coax non-Spanish speaking children to progress. It is natural to be concerned that your child is not thrown in at the deep end of an alien culture but I believe that many non-Spanish children thrive in Spanish state schools. Indeed, such is the ambition of the Spanish government to present students as career ready, many schools are introducing bi-lingual schooling for all.
For others there are several very good international schools in the Marbella region which coach their pupils for both the International GCSE and A level systems and often the Spanish “International Baccalaureate” making access to universities, including those in the UK, possible.
Given their schooling in Spain it is usual that students acquire an excellent level of spoken Spanish and for many their grasp of the language becomes like an additional A level subject – even if they don’t take a formal exam. This internationalization presents opportunities for those educated in Spain to take, perhaps, a wider view towards their potential future careers.
Heath
If you become part of the Spanish Social Security regime by living and working in Spain and you earn over the Spanish minimum wage you will be required to pay contributions. If you are eligible for the Social Security system but chose not to pay don’t expect to receive any benefits. If you contribute to the system you will get healthcare cover and if you contribute for fifteen years plus then you will should be eligible for a basic state pension.
Those who were registered with the Spanish health system pre-1st January 2021 may well continue to benefit from the health cover offered due to the UK’s previous membership of the EU and as secured by the Withdrawal Agreement.
For those not part of the system, you will have seen above, as part of the Visa application process it’s a requirement that the applicant has valid Spanish based private health cover for themselves and their family members. In our experience these schemes are both reasonably economical and comprehensive.
Banking
For most newbies in Spain this is an area of some challenge as the banking offer is not yet quite like the UK equivalent. Historically, the non-resident Spanish bank account tended to tick most boxes. Many residents tended to use their old UK bank for the receipt of funds such as pensions and investment income and to feed their Spanish account by bank to bank transfer. Again, as a parting Brexit gift, several UK banks have now written to those with a Spanish address explaining they are no longer able to continue to offer their services. An Umbrella When It’s Sunny
Conversely, I am hearing that Spanish banks are starting to apply excessive charges to Sterling to Euro transfers, the reason for this is uncertain except that they probably can just do it! As a result, many now use online transfer facilities like Transferwise to feed their accounts more economically.
It is likely that you will want a Spanish Bank account whether you plan to be a resident or non-resident, to handle utility bills if nothin else. Keep a wary eye on annual charges and the general costs of maintaining an account. Shop around or perhaps wait for Starling Bank to launch in Spain as they have suggested they are planning to do.
Estate Planning
Never an easy subject but let’s face it, none of us is going to avoid death! Most of us will seek to plan for the next generations enjoyment of as much as we can legally leave them. So whether it’s a simple matter of completing a Spanish Will to deal with your Spanish assets or the need for a more complicated structure for your finances this is a step we all should take.
To avoid confusion upon the loss of someone the Spanish solution is really good. A Wills Registry in Madrid stores all properly completed wills that are lodged there for safe keeping awaiting the inevitable. It is then called for and provides the grieving family with some certainty.
I do hope that I have given you some food for thought consideration and question. For many the initial impulse is, of course, to look forward to a life on the Costa del Sol but I would appreciate you taking the time to consider theses steps. Wherever we can, we would naturally be delighted to help guide our clients as required.
Should you be interested in discussing the processes involved in buying a property in Marbella, we would be delighted to assist you. Our multi-disciplinary team of bi-lingual, highly experienced and wholly independent Abogados and Asesores Fiscales are ready to help you.
Please call me, Mark FR Wilkins, during usual business hours on +34 600 343 917.
Please note that our posts are for general interest. There are no substitute for proper legal advice tailored to your specific circumstances as provided by a qualified Abogado who is experienced in the application of the Spanish Law.
Nothing contained in this article should be seen or taken as the writer or the publisher providing legal or financial advice.
© Mark FR Wilkins 2022 All rights reserved