Live News From Spain As It Happens

IN LIGHT of the news that four regions have axed inheritance and gift tax – either entirely, or for first-degree relatives – residents in Spain who have not had to deal with these as yet may not be clear on when it is payable, how much, or by whom. 

Confusion is sure to arise among expatriates in particular – those who inherit property or money from relatives or friends in their home countries, or who are unsure whom to include in their wills in case their loved ones in their nation of origin are hit with a huge bill.

They may also be wondering whether it is best, when they become very elderly or if ever they are gravely ill, to sign over their home and cash to their chosen beneficiaries before they die, in order to reduce the workload for their executors when the time comes.

We checked in with one of Spain's largest high-street banks, the BBVA, which gave us the lowdown on how inheritance and gift tax works, and why it is such a big issue leading to some regional governments' decisions to reduce or axe it.

What is inheritance and gift tax?

A proportion of assets or funds inherited from a person who has died, or transferred to you when the owner is still alive, is paid to the regional government of whichever of Spain's 19 autonomous communities the original owner lived in – 15 regions on the mainland, plus Ceuta, Melilla, the Balearic and the Canary Islands.

'Gift tax' relates to when a property, investment, land or other significant part of someone's estate is transferred to them without payment – perhaps if the owner is very elderly or knows they are terminally ill, and wants to save the beneficiaries of their will the time and paperwork involved in the transmission after their death.

'Inheritance tax' is paid when the transmission happens after the owner's death, at their request or, in the absence of a will, to their next of kin.

There is no set percentage charged on this type of tax; the figure depends upon individual regional governments' criteria, and rises in line with the value of the inheritance or donation in vivo.

Typically, it can be as low as 7.65%, or as high as 34%, and the figure decreases in line with closeness of family ties between the original owner and the beneficiary, through discounts applied.

Can I pay inheritance or gift tax out of the assets I receive?

You cannot usually pay inheritance tax out of the funds inherited – as in, if someone leaves you their house in their will, you cannot sell or remortgage the property to pay the tax. This has to be paid first, although it may be possible to acquire an unsecured bank loan to do so, then pay it back through a remortgage or sale.Read more at thinkSPAIN.com

MASS reductions in inheritance and gift tax have been reported across Spain, with some regions axing it altogether – starting, in most cases, from January next year.

An increasing fiscal trend nationally, eliminating tax paid by those who inherit property or financial assets from their deceased loved ones will come as a source of relief to those faced with big bills on top of grappling with bereavement.

Governments in the Balearic Islands, the Canary Islands, the eastern coastal region of the Comunidad Valenciana, and the land-locked northern wine region of La Rioja, have scrapped the tax altogether for some or most cases, whilst the inland north-eastern region of Aragón and the north-coast territory of Cantabria have reduced these duties.

Madrid, Andalucía, and Murcia had already done so in previous years.

Comunidad Valenciana president Carlos Mazón, taking up proposals already made by his predecessor Ximo Puig, has announced inheritance and gift tax will no longer be charged by the Treasury covering the region's three provinces of Valencia, Castellón and Alicante.

Balearic regional president Marga Prohens says no tax will be levied for inheritances or in vivo donations from parents to children, grandparents to grandchildren, or between spouses and legally-registered, unmarried cohabiting partners.

This comes at the same time as the Balearic regional government announces cuts to 'asset transmission' tax for young adult and disabled first-time homebuyers – a sum automatically payable to regional authorities when purchasing a property.

La Rioja president Gonzalo Capellán has scrapped inheritance and gift tax between parents and children and between spouses, as a first step in a full tax reform he intends to bring about before the May 2027 regional elections.

Huge discounts, up to 100%, on inheritance and gift tax, among other taxes – including on fuel in some cases – have been announced in the Canary Islands, whilst a reduction in inheritance and in income tax is said by Aragón president Jorge Azcón to be on the cards.

María José Sainz de Buruaga, leader of Cantabria regional government since May, has not given specific details of cuts, but has pledged 'the greatest fall in taxes in the region's history' for 2023 duties, which will mainly be paid or adjusted in 2024, and which will include rates payable for inheritances and live donations.

Read more at thinkSPAIN.com

BEFORE committing to buying a permanent home in Spain, many movers prefer to rent for a specific length of time to get a feel for life in their new country; this is also likely to be the go-to option for anyone planning to live in Spain for a finite period, such as for work, or just to experience a new culture and language for a while.

Buying a property in Spain as a long-term investment, and renting it out as a main home, is another way of creating a solid tie with the western Mediterranean country, and potentially providing a pied à terre that can be used as an eventual retirement retreat.

How much you might have to pay each month as a tenant, or how much you can expect to charge, are fairly crucial initial considerations before your journey even begins. Of course, you may already have a very set idea as to where in Spain you want to focus on – in which case, you can check out typical prices by area in our Property to Rent section. 

Always bear in mind that rent prices in Spain tend to be more dynamic and market-sensitive than the cost of buying, and that both of these can vary considerably – not just by area, but in the same area. Renting or buying a home in one street may be far more expensive than in another street barely 100 metres away, or might be cheaper in the next town along the road.

Average city rental prices

To gain an idea of average rental prices, figures from the National Institute of Statistics (INE) shows us that in provincial capital cities across the board, the approximate cost to a tenant is around €9.77 per square metre of property.

Based upon a house or flat of 90 square metres – which would typically have around three bedrooms in the case of the latter, or two if it was a villa – this means a national average monthly rent of €879 if you're in a city.

Naturally, provincial capitals are not the end of the story – or even the whole of the beginning of the story. Very few are close to a beach, most are at the higher end of the price range for their province as a whole, and their main market is among the workforce, particularly those in jobs that do not permit remote working.

But the cost of rent in a capital gives a starting point when working out the cost elsewhere in the province.

Read more at thinkSPAIN.com

[UPDATED]  BRITISH nationals living in Spain will now have to replace their UK-issued driving licences for a Spanish version.

This also applies to anyone who has a driving licence from Gibraltar, a British territory, or who is not a British national but holds a licence issued in the UK or Gibraltar.

The Department for Transport (DfT) in the UK struck an agreement with Spanish traffic authorities in March, giving British citizens until September 15, 2023 to exchange their licences.

They were told to make the swap within six months of March 16, 2023, or within six months of the date they officially became residents, whichever is the later.

UK nationals who became residents in Spain more recently than March this year can still switch their British driving licences for a Spanish version up until the six-month cut-off point, their UK licences will only be valid for up to 6 months after their entry into the country or the date they were awarded residency.

Exchanging a licence after this date means the holder will not be allowed to drive in Spain until they receive their Spanish one.

British nationals whose UK licences have already expired – either the photo-card part, or the licence as a whole for the over-70s – may still be able to swap them for a Spanish version, DGT confirms.

UK licences expire once the driver reaches the age of 70, and is then renewed periodically thereafter; however, the photo-card normally has to be replaced every five to 10 years, even when the actual authorisation to drive is still valid.

If the photo-card expiry date has passed, or – in the case of drivers aged 70-plus, the complete licence deadline – an exchange may still be possible.

Where the holder was already living in Spain before the expiry date, they can swap their licence for a Spanish one within the first six months of their residence date, or up to and including September 15.

But if the licence expired – and was not renewed – before the driver became a resident in Spain, it cannot be exchanged, and the holder must take a fresh driving test in Spain.

British nationals resident in Spain cannot renew their UK-issued licences via their home authority, the DVLA – their only option is to obtain a Spanish licence, either through exchange if they are eligible or, if not, by taking a driving test.

SPAIN has stepped up to help Morocco after a devastating earthquake left nearly 2,500 dead, and numerous organisations have given details of how to donate aid.

Teams from Spanish provincial fire brigades – including Zaragoza, Cádiz, Granada and Huelva – have joined the charities Bomberos Unidos Sin Fronteras ('United Firefighters Without Borders') and Bomberos Para el Mundo ('Firefighters for the World') in the northern African nation to search for survivors.

Supervisor for the former, Antonio Nogales, says the group has been heading south from Marrakech into the province of Al-Haouz, in the Atlas mountains – the worst-affected area.

After an eight-hour overland journey to the nearest village, Imi N'Tala, accompanied by four trained search dogs, Nogales' team spent the whole of Sunday trawling through the rubble in the hope of finding survivors – but to no avail.

“There isn't a single house left standing,” Nogales reports.

“When we arrived, no rescue team had even made it there yet. We were the first to reach the area, which is completely inaccessible.”

The group has since moved onto the village of Amizmiz, where authorities are believed to have arrived and will, it is hoped, be able to guide the firefighters towards where the most immediate help is needed.

“Right now, the most urgent actions are attending to people who've lost everything and have been put up in camps, as they need shelter and blankets,” Nogales explains.

“They have very little chance of even being able to rebuild their homes in the future.”

He urged the international public to 'not forget about' the victims 'even after the earthquake stops being headline news'.

After the tremor – which reached 6.8 on the Richter scale and shook the historic, touristy city of Marrakech, Spain's defence minister Margarita Robles has sent out her national Armed Forces Emergency Response Unit (UME).

The UME is on stand-by to increase human resources if necessary, and say they will remain in Morocco 'for as long as they are needed'.

Meanwhile, the European Union has pledged an initial aid payment of €1 million, and is supplying satellite footage taken by Copernicus.

Other countries, along with Spain, which Morocco has so far accepted aid from include the UK, Qatar and the United Arab Emirates (UAE).

Aid collection points in Spain

Residents in and visitors to Spain who want to help by providing funds, non-perishable foodstuffs and other basic necessities, and medication have been given a list of donation points.

Read more at thinkSPAIN.com

NOW into its seventh stage and a new calendar month, Spain's version of the Tour de France concludes its only incursion into coastal towns on Sunday, 

The last of the 'Big Three' international cycling tournaments – after the Tour de France and the Giro d'Italia – the Vuelta a España hit the Mediterranean seaboard on Tuesday (August 29), when the fourth stage took it from the principality of Andorra, a different country altogether, down to Tarragona, southern Catalunya.

Stage five began at the Mediaeval inland town of Morella in northern Castellón province, finalising in the coastal town of Burriana, via Onda, Nules and La Vall d'Uixó.

Australia's Kaden Groves won both these stages, with the first three being won by Italy's Lorenzo Milesi, Denmark's Andreas Kron, and Belgium's Remco Evenepoel, in that order.

Stage six continued through southern inland Castellón province, briefly diverting into that of Teruel in the neighbouring land-locked region of Aragón, covering Segorbe and Montanejos in the former and Mora de Rubielos and Sarrión in the latter, finalising at the astrophysical observatory in Javalambre, Teruel, a ski resort between December and March and a high-altitude (1,966 metres) hikers retreat the rest of the year.

Victory for stage six went to the USA's Sepp Kuss.

Stage seven has now left the western Valencia-province wine-region town of Utiel, and is expected to reach the province's southernmost coastal town, Oliva, at around 17.30 today (Friday, September 1).

Read more at thinkSPAIN.com