“Floor clauses” in Spanish mortgage contracts: What are they? What do they mean? What can you claim?…so many questions.

I am sure you have all heard of the
infamous “floor clauses” (cláusulas suelo) contained in Spanish mortgage contracts. However, as much as I am sure you have heard I am just as sure that you are not entirely clear on what they are or what they entail. This confusion, which already exists in the Spanish community and more so in the foreign community, is due to huge amount of contradictory, and sometimes outright false, information spread by the media. Though I must admit this is not helped by the zigzag course taken in Spanish judicial precedent.

I hope this post will help to clarify the situation and any doubts you may have as to whether they could apply to you.

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The registered surface area of a Spanish property: What am I buying?

I am sure many readers will have come across situations in Spain where the surface area of a
property registered at the Land Registry does not correspond with the reality. Up until fairly recently it was common practice, particularly in rural areas, to reduce the surface area of the property in the deed, when transferring the property, in order to pay less tax on the transfer. This has resulted in a large amount of properties, extended across the country, which are incorrectly registered in the Land Registry.

This detail is something that must be seriously considered when buying property in Spain.

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Non-Resident Income Tax: What is it and why do I have to pay it?

As you may remember, I have referred to this tax in previous posts without fully explaining what it entails exactly. Here is a breakdown of the key facts of Spanish Non-Resident Tax.

The determining factor regarding what kind of Income Tax a natural o legal person pays in Spain is residence. Residents pay regular Income Tax (IRPF) or Corporation Tax (IS), and non-residents, both natural and legal persons, pay must pay Non-resident Income Tax (IRNR).

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Living and working in Spain

As we all know, citizens of EU and EEA member states are allowed free movement throughout the Spanish territory. This is in theory. In reality, since 11th July 2012, the conditions for residence in Spain for more than 3 months have become much stricter.

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Changes to Inheritance Tax in Spain: Are you entitled to a tax rebate?

Since the summer of 2014 there has been a wide media coverage on the EU ruling affecting Spanish Inheritance and Gift Tax. The existing tax legislation in Spain, at that time, created a situation of unequal tax treatment depending on whether the deceased and/or the inheritors were Spanish residents or not.

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