The following article has been kindly supplied by Raymundo Larraín Nesbitt who I hope will become a regular legal contributor to my blog. Here we will be looking at the legal consequences that European Regulation 650/2012 is going to have on foreign resident’s Spanish Wills.

By Raymundo Larraín Nesbitt
Lawyer – Abogado

Introduction
This article serves as a gentle reminder of the impact European Regulation 650/2012 will have on all foreign residents who live and own assets in Spain and who have made a Spanish will (I am particularly thinking of British and Irish nationals).
European Regulation 650/2012, in force since 2012, introduces significant changes to Succession that may require you to make a new Spanish will. These changes will come into force as from the 17th of August 2015. Anyone affected by it that passes away on or after the said date and who has not updated their Spanish will accordingly may cause devastating problems to their beneficiaries (normally family). Let this article act as a warning to all those affected by it.

These devastating effects on your family include, but are not limited to, protracted, lengthy and expensive litigation besides fights that tear families apart. In my professional experience the bitterest litigation takes place within families fighting over inheritance money.

If you wish to avoid serious problems to your loved ones you should heed the advice given in this article.

This Regulation has EU-wide impact. If you own property elsewhere in Europe, for example in France or Italy, and your habitual residence is located there you may face similar problems to the ones described in this article for those who have taken up residency in Spain. Take legal advice.

To close, I have structured my article as a F.A.Q. for ease of comprehension. Please feel free to add any comments below and I will do my best to address any legal queries relating to it.

What Do These Changes Entail?

Prior to this Regulation, British nationals (foreigners in general) had free testamentary disposition in their Spanish wills over their Spanish Estate following art. 9.8 of the S.C.C. providing their own national law allowed it (meaning they could leave their Spanish Estate to whoever they pleased). This avoided a testator from following Spanish forced heirship rules that establish that 2/3rds of the Spanish Estate would go to their children. Almost everyone buying property in Spain will have been advised by their conveyance lawyer to draw up a Spanish will exclusively for their Spanish assets.

Regulation 650/2012 changes the rules of the game as it introduces that Succession in all Member States will now be ruled by the laws of the land where the testator holds residency status in lieu of his own national law (article 20). The United Kingdom and the Republic of Ireland have opted out of this Regulation.

This change translates in practice, for example, for an English resident in Spain who’s made a Spanish will that his Succession will now be governed by default by Spanish Inheritance Laws instead of England and Wales’ Succession Laws.

Spanish Succession Laws stipulate that both descendants (children or grandchildren) and ascendants (parents or grandparents) will inherit with priority over a surviving spouse. They are entitled, by law, to inherit fixed shares of the estate. Spain’s Civil code dates back to the nineteenth century and needs to be brought up to speed with modern times.

Meaning that the Spanish will of this Englishman as it stands now, unchecked, may be successfully contested by forced heirs under Spanish Succession Laws unless he has specifically opted that his will is governed by his own national law (England and Wales) in accordance with articles 38 et seq. of this Regulation.

Following on the above example, a resident Englishman decides to leave everything to his stunning blonde girlfriend (twenty years her senior) and cut out his three children from a previous marriage. If he doesn’t make a new Spanish will his children (any of them) can challenge successfully his existing Spanish will leaving his girlfriend exposed and unprotected to protracted litigation. It is almost a certainty that his children will win the case under this new Regulation. You can only leave everything to your new gorgeous girlfriend under English law and for that you need to opt specifically for it on making a new Spanish will.

A resident testator can only avoid having their will contested by making a new Spanish will that reflects his personal choice (to have his own national law governing his Succession in lieu of Spain’s Inheritance Laws which do not contemplate free testamentary disposition).

Who Does It Affect?

In a nutshell, Regulation 650/2012 affects all those who have their habitual residency in Spain and die on or after the 17th of August 2015 (articles 23 and 83). Specifically:

• Foreigners who have their habitual residence in Spain. It affects Spanish wills witnessed prior to the 17th of August 2015 or else which are non-compliant with Regulation 650/2012 terms. If you are resident in Spain and have made a will according to your own national laws you may need to make a new Spanish will compliant with this regulation. Seek a lawyer to check your will if you are unsure.

• Non-resident foreigners who have made a Spanish will and who plan to become resident in Spain at some point in the future i.e. British family who bought off-plan property in Spain and plan to sell up in the UK and retire to Spain over the next years.

What Can I Do? Can I Simply Update my Existing Spanish Will?

Short answer is no.

After speaking with multiple notaries it is clear that a simple addendum (codicil) cannot be made to your existing Spanish will without incurring in legal risks. In order to avoid your will being successfully contested at the time of your death it is necessary you make a new Spanish will.

Only by making a new Spanish will does it ensure you have a cast-iron guarantee that it will remain uncontested. If you do not heed my advice your outdated will may be challenged by any forced heir under Spain’s Succession Laws. And they will most likely win the case.

If I Make a New Spanish Will What Happens With The Old One? Could there be a Conflict?

No. In Spain the newest will always overrules any prior ones. Spain has a Central Registry of Wills located in Madrid. Any will that is witnessed by a notary anywhere in Spain will have the details sent to this central registry. The original will is stored for safekeeping by the notary himself. There shall be no conflicts.

The only problem is if you decide to make a holographic will instead of having it witnessed by a public notary. I highly recommend this is never done as Spain has very strict rules for these type of wills and they can be easily annulled.

Can I grant a Power of Attorney and have my Spanish Lawyer make a New Will for me?

No. Making a will under Spanish law is a personal act that requires it is made in person and not through proxies.

I am a British/Irish national resident in Spain. Neither the UK nor the RoI have Ratified European Regulation 650/2012, Therefore I don’t Need to Follow your Vested Advice. Thank You Very Much.

It’s beside the point.

Spain has ratified it and your assets are located in Spain for the purpose of this article. When you pass away your Spanish Estate will be unwinded following your own national laws. Both the UK and the RoI make an internal “renvoi” to Spanish Succession laws which happen to follow Regulation 650/2012. So regardless if neither the UK nor the RoI have ratified this Regulation, Spain has and your Spanish Estate will be binded by it following European Regulation 650/2012.

I am a British/Irish national and NOT resident in Spain. I Don’t Plan to Become Resident in Spain.

In such a case this Regulation does not affect you. It only affects existing residents in Spain or else those who at some point in the future plan to take up residency in Spain. There is no need for you to make a new Spanish will. You may disregard the whole article.

I am a Foreign Resident Living in Spain. I Plan to Leave All (or Most of) My Estate to My Spouse/Partner. I Have Children (or Grandchildren) and my Parents (and Grandparents) are all Dead. Do I Still Need to Make a New Spanish Will?

Yes, you would need to make a new Spanish will. You should do it before August’s deadline.

It is important to note that Spanish law will govern the estates of all foreigners who have their habitual residency in Spain and who die on or after the 17th of August 2015 as per art 83 of this new Regulation. In other words, Spanish law will govern by default the estates of all foreign residents unless a specific provision is worded in their Spanish will to avoid it.

Children, under Spanish Succession law, have priority on inheriting over a surviving spouse; regardless if they are from a previous marriage or not. They are entitled to 2/3rds of the deceased’s estate. Your children – any of them – could apply to a Spanish court to have your will set aside. They would most likely succeed under this new Regulation leaving your wife or partner in dire straits i.e. they could for example inherit the villa where your wife/partner currently lives in and throw her out leaving her unprotected.

If you care for your partner/spouse’s future well-being act now and make a new Spanish will according to your own choices (providing of course your own national law allows it).

The same rule applies to grandchildren. Grandchildren also have priority on inheriting over the surviving spouse. They would likewise be entitled to 2/3rds of the estate.

In order to legally leave everything to your wife (or partner) you need to override Spanish Succession Laws by making a new Spanish will and specifically opt that your own national law governs the will (E.g. England and Wales’) in lieu of Spain’s Inheritance laws.

I am a Foreign Resident Living in Spain. I Plan to Leave All (or Most of) My Estate to My Spouse/Partner. I Do Not have Children (or Grandchildren) and One (or Both) my Parents/Grandparents are Alive. Do I Still Need to Make a New Spanish Will?

Yes, you need to make a new Spanish will.

If there are no descendants (children or grandchildren), ascendants (parents or grandparents) of the deceased are next in line in the pecking order (arts. 809, 810 and 935 et seq. of the S.C.C.). They have priority on inheriting over the surviving spouse. You run the risk of having one of your parents, or both, contesting your will and leaving your spouse or partner unprotected as a result.

Parents of the deceased are entitled to half of the estate if the deceased wasn’t married to their partner.

Parents of the deceased are entitled to one-third of the estate if the deceased was married to the surviving spouse.

I am a Foreign Resident Living in Spain. I Plan to Leave All (or Most of) My Estate to My Spouse/Partner. I Do Not have Children (or Grandchildren) and my Parents (and Grandparents) are all Dead. Do I Still Need to Make a New Spanish Will?

No. Your existing Spanish will leaving all (or most of) your estate to your spouse/partner should suffice.

Spanish Wills and European Regulation 650/2012 – Conclusion

To avoid potentially devastating consequences to your loved ones that may lead families to fight over inheritance money it is your duty to have your Spanish will checked by a Spanish lawyer and, if necessary, to make a new Spanish will compliant with European Regulation 650/2012. This will allow your own national law to be applied to your late Estate instead of Spain’s Inheritance Laws.

Making a new Spanish will typically has an individual cost of between €100 to €250. This is a paltry amount compared to the dozens of thousands of euros your family stands to lose unless you take evasive action now before August’s deadline; not to mention the additional grief and aggravation you will spare them at a time of bereavement. It is in truth a small price to pay for peace of mind.

Surviving spouses or partners are the ones who stand to lose most (or all) under this new Regulation unless you act now.
Remember, you have until the 17th of August 2015 to make a new Spanish will if this Regulation affects you. Do not take chances with your loved ones’ well-being and plan ahead for your demise.

“If you fail to plan, you plan to fail” – Benjamin Franklin.

Founding Father of the United States. Exceptionally gifted scientist, inventor, diplomat, writer, printer, postmaster and political theorist. Even politician in his spare time; nobody’s perfect.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2015 © Raymundo Larraín Nesbitt. All rights reserved.

Spain’s economic growth is set to pick up as domestic demand benefits from an improving labour market, easier financing conditions, greater confidence and lower oil prices. Net exports, by contrast, are expected to dampen growth, although this effect will gradually diminish this year and next, as Spain’s competitiveness improves. At the same time, the government deficit should continue to narrow.

After three years of recession, Spain’s economy began to grow again in 2014 and seems to be gathering momentum as labour market prospects improve, financial conditions loosen, confidence strengthens, economic uncertainty fades and energy prices fall. These factors are expected to sustain growth over the forecast horizon, despite the continued drag from high levels of private and public indebtedness and deleveraging. The speed of the ongoing external adjustment, however, is likely to slow.

Domestic demand keeps driving growth
After having expanded by 0.5% q-o-q in both the second and the third quarters of 2014, economic activity is expected to have gained further momentum in the last quarter, leading to an overall GDP growth of 1.4% for 2014 as a whole. GDP growth is projected to reach 2.3% in 2015 and 2.5% in 2016, mainly driven by domestic demand. The sizeable drag from the external sector observed over the first half of 2014 should narrow, and net exports are expected to prove slightly negative for growth in 2015 and turn neutral in 2016.

Recent hard data on activity and soft data from confidence indicators both suggest that private consumption remained quite resilient in the last quarter of 2014. Such resilience is expected to persist as a result of robust employment growth and rising real gross disposable income, which should also benefit from falling price levels throughout most of 2015 and low inflation thereafter. Lower precautionary savings are forecast to reduce the households’ saving rate further in the short term. Households’ leverage ratios are set to keep falling as GDP and disposable income expand.

Positive demand prospects, easing financing conditions and the projected rebound in exports are expected to underpin investment in equipment, despite the ongoing balance-sheet correction of non-financial corporations. After seven years of adjustment, a modest pick-up in construction, including residential investment, is expected in 2015. Exports are expected to accelerate during 2015, backed by continued improvements in price and non-price competitiveness and the projected recovery in Spain’s main export markets. At the same time, after the sharp expansion in 2014, imports are forecast to moderate slightly to align with long-term final demand elasticities. The current account is set to register a small deficit of 0.1% of GDP in 2014, but this should turn into surpluses of some 0.5% thereafter, also due to the impact of the decline in oil prices. In turn, net external lending is expected to narrow sharply in 2014, to 0.3% of GDP, before rising again to around 1.0% of GDP as of 2015.Inflation is expected to have averaged -0.2% in 2014 and will remain negative in the short term, also as a result of falling oil prices. Hence, inflation is foreseen to fall to -1.0% in 2015.

In 2016, however, inflation is forecast to turn positive, but remain low, as the economy’s output gap remains very negative.

Sustained employment growth
Having peaked at 26.9% of the workforce in the first quarter of 2013, the unemployment rate declined to 23.7% in the fourth quarter of 2014. Job creation gathered steam in the second half of 2014, while the size of the labour force continued to contract. These positive trends are expected to intensify over the forecast horizon, helped by continued wage moderation and only modest increases in nominal unit labour costs. With the labour force contraction expected to fade slowly, unemployment is forecast to fall to 20.7% in 2016.

The fall in oil prices and the monetary policy interventions by the ECB could translate into higher growth and less negative inflation than assumed in this forecast, as they could push private consumption and investment further.

Continued consolidation helped by recovery
Recent data indicates that public finances continued improving in 2014, with the general government deficit in the first three quarters of the year reaching 3.6% of GDP, 0.6 pp. lower than last year (net of bank recapitalisations). All in all, the deficit for the year as a whole is expected to narrow to around 5.6% of GDP, down from 6.3% of GDP in 2013, net of bank recapitalisations in both years.

Going forward, the reduction of the deficit is relying mostly on the improving economic outlook. The government deficit is expected to fall to around 4.5% and 3.7% of GDP in 2015 and 2016, respectively, despite the impact from recently implemented tax cuts. The reduction in the deficit is held back by subdued nominal GDP growth, which is acting as a drag on revenue developments. Risks stem from uncertainty regarding the impact of the tax reform on revenues, contingent liabilities in the motorway sector and implementation risks in an election year.

While pension expenditures are forecast to continue rising, falling unemployment should limit the growth of social transfers in the near future. Thanks to lower interest rates, interest expenditure growth should moderate over the forecast horizon.

Spain’s structural deficit is expected to widen by about ¼pp. per year in 2015 and 2016, reaching 2¾% in 2016. Still sizable budget deficits and low nominal GDP growth are expected to push the public debt ratio above 100% in 2015 and to 102.5% in 2016.

Source: EU Commission

The average price of a built property (whether new or used) fell 2.7% in January compared with the same month of 2014, according to the latest report by Spanish appraisal company TINSA

Despite this decline, property prices do appear to have been stabilizing, a trend that started in the second half of 2013. In fact, it is the first time since June 2008 that the overall index recorded an annual decline of less than 3%.

Remember that in 2013 the average price of a Spanish property registered a decline of 9.2% and the overall balance of 2014 slowed to 3%.

As an interesting fact that was also mentioned, since highs of 2007, TINSA believes prices have declined on average by 41.6% across Spain.

The general positive trends is also noticeable in the increased demand. In fact, it has just been stated that residential property sales rose by 2.2% in 2014 year on year, to a total of 319,389 sales, thus returning to positive rates after three years of declines, according to the National Institute of Statistics (INE).

Of course the evolution of property prices over the next few months will be dependent on many factors including the health of the national economy.

Regards
Andrew Bellés

This year could be the year where all indicators on the health of the property market emerge from the red.

If as claimed, 2014 was the turning point for the Spanish housing market, then 2015 may be know as 1 AD (After Depression), After 7 years in limbo, the residential sector may again be seeing positive data on all key indicators. This is the main conclusion drawn from ‘Pulsímetro Inmobiliario’ (XXI edition) of Instituto de Práctica Empresarial (IPE)

The report has drawn MAR Real Estate, the real estate co-operative of IPE, in collaboration with the Red de Asesores Inmobiliarios Cualificados (of which 600 professionals from all over Spain participated in the study). And their predictions are optimistic. All the indicators of the health of the Spanish property market, sales, prices, mortgage lending, construction, stock … should all show signs of improvement in 2015. Of course they point out; this is from the low current levels, but still a big improvement over the previous years.

To begin, it is expected that sales of Spanish residential homes will increase by 7.5% this year, after 2014 ended with an increase of 2.6%, the first increase since 2010 when the removal of tax relief for the purchase of a first homes altered the market. According to forecasts by MAR Real Estate, 2015 will see 344.000 residential property sales, 24,000 more than 2014 (320,063).
The second major indicator is property prices.According to the report by the IPE, last year prices rose by6.47%, and in 2015the increase will be 2.5%. The average value of homes sold in 2014was141,718eurosand this year will close with145,261euros, the same level as in2012.

Rising prices
“The trend is upward, which can be seen by the fact the vulture funds have already left Spain,” said Jose Antonio Perez, a director of the IPE. “What sells is what is in good location, in prime areas and well finished, ready to move. Speculative product has virtually disappeared,” he adds.

Furthermore, we are seeing a phenomenon not seen since the crisis, properties selling off-plan and the prices increasing prior to completion.

Both of these cases are found on the Costa del Sol which property analysts use to help forecast future national property trends (as was the case in the 80s and 90s). In Estepona, the British company Taylor Wimpey went on sale a promotion of 44 off-plan properties. They have only 3 penthouses left, and at the start of the promotion, similar units were selling for 400.000€, they are now selling for 500.000€. A 25% increase. With approximately 90% of the buyers being foreign.

The second example is Inmobiliaria del Sur, another promoter that has been able to increase prices in several projects along Mijas Costa and Marbella. With prices at 300.000€ when they were previously at 200.000 to 220.000€.

“In prime areas there is a trend of increasing prices while is areas of excessive unsold stock prices will further decline” says Perez.

That is to say, quality sells; the excesses of the housing bubble will not. In the first case, the bargaining power has fallen, although there are still drops, in the second, case there is simply little demand. Unless from investors looking at the very long term or those looking to buy to rent. “The homes bought to rent will continue giving good returns, which in 2015 will continue migrating money from the financial system to the real estate market” predicts José Antonio Pérez.

There are potential buyers, but cannot access credit. Experts believe that natural demand for Spain is around 400,000 property transactions; a figure that is believed is still a few years away. The return to sustainable numbers will be something that depends heavily on financial institutions to open the lending tap to the average person. For now mortgage loans for the purchase of property have shown increases, but still remain low, according to Perez. In 2014, 299.064 mortgages, 2.3% less than in 2014 were signed, but 2015 will show the first hike in nine years as 306,639 mortgages for urban properties will be signed. In 2006, the last year in which an increase was recorded, the figure was 1,816,878 mortgages nothing less than a 592% increase.

“The mortgage market in 2015 will remain restricted, with banks financing the sales of their own properties”, says Perez. Moreover, “two-thirds of sales will be cash deals” he adds.

The average mortgage grew by 15.8% in 2014 (from 113,972 to 131,984 euros) and will rise by 3.4% in 2015, to 136,447. The volume of these loans will rise by 6% to 41,840 million euros.

There remains one last question. What about the construction? Will we see cranes return to the urban landscape? The answer is a positive, albeit a cautious one, yes

In2015 40.225houseswill begin, 7.5% more than in2014.

Indicators

Sales of Spanish properties: + 7.5% The sale of homes has returned to positive path. After seven years 2014 showed an increase in the number of housing transactions (2.6%). 2015 will increase by 7.5% more than last year, according to the Pulsímetro Inmobiliario.

Prices of apartments: + 2.5%. The great indicator for buyers is the price, which, combined with the need, decides whether to purchase or not. According to the Pulsímetro Inmobiliario, last year the property prices rose by 6.47% and in 2015 the advance will be 2.5%. The average value of homes sold in 2014 was 141,718 euros and this year will close with 145,261 euros. That is, at 2012 levels.

Construction of Spanish properties: + 7.5% Slowly cranes will return to the skyline of major urban centers in Spain. 2014 saw an increase in projects. In particular, the start of 37,418 homes, 20% more than in 2013. In 2015 the upward trend will continue, albeit less pronounced. According to the IPE, becoming at least the first brick houses 40,225, 7.5% more than last year.

Mortgages granted: + 2.53% The number of urban buildings financed with mortgage will again start to pick up. This year 306,639 property loans will be signed, 2.53% more than the 299,064 recorded in 2014. The total volume mortgaged last year was 39.472 million euros, 13.8% more than in 2013. In 2015 will amount to 41,840 million, up 6%.

Average mortgage: + 3.4% The average amount granted by financial institutions on loans to cover the purchase of a residential property in 2014 was 131,984 euros, 15.8% higher than in 2013. This year the figure will continue to rise, particularly up to 136,447 euros, 3.38% more than last year. The average mortgage equal to 93% of the average amount of home sales (remember that all types of real estate mortgage).

Approved projects: +5% Approval for the construction of residential developments will grow again in 2015. This year 64,591 visas were granted. That is, 5% more than last year and 24,000 over the number of homes started.
All properties: + 1.8%

Property market: +1.8% The report from the Institute of Business Practice is mainly focus on the residential market, but real estate is much broader than that. Looking at the complete property market to include all transactions, we can expect sales around 717,451 in 2015, 1.8% more than in 2014.

Unsold stock: -29.1% For the fourth consecutive year, in 2014 the surplus of homes fell, from 777,000 in 2013 to 662,761. That is, no less than 115,000 dwellings, 14.7% of the total. This trend is expected to pick up pace in 2015. According to forecasts of IPE, this year the figure will dwindle to 469,708 properties, 29.1% less (193,000 homes).

Regards
Andrew Bellés

Original article seen in EXPANSION

The president of the Junta de Andalucía, Susana Díaz, accompanied by the new regional head of tourism, Luciano Alonso, revealed the Junta’s ambitious plans for tourism in 2015 on Wednesday – among them increasing visitor numbers by 1.2 million to over 25 million.

“We know that tourism drives the economy,” said Díaz, signalling the Junta’s intention to make special efforts in the international market and move from fourth most popular Spanish destination for foreign visitors to third position – currently held by the Balearic Islands who had 11.3 million international tourists last year to Andalucía’s 8.5 million.

Díaz pointed out that the tourism industry generated 16.6 billion euros in 2014, a rise of 0.8 per cent.

One of the challenges for this year, she stated, was to work on increasing the average tourist expenditure in Andalucía through raising the number of nights in the average stay. For this reason there is to be a strong focus on attracting foreign visitors, especially from emerging and long distance destinations.

Good news
Díaz took the opportunity to reiterate that 2014 was a fantastic year in terms of tourism in Andalucía. In fact, it was the best in history with 24 million visitors (6.6 per cent more) 45 million overnight stays and created 332,000 jobs (up seven per cent).

To that end the president stressed that tourism in Andalucía is growing faster than in the rest of the country, partly to do with the restoration of the national market which grew five per cent last year.
“22 per cent of Spaniards who stay in Spain for their holidays choose our region. We are absolute domestic market leaders,” said Díaz. She also put the accent on those figures which refer to customer satisfaction. Visitors to Andalucía give their stay an average score of 8.2 out of ten.

For his part the new Junta head of tourism, Luciano Alonso, announced plans to upgrade Andalucía’s hotel sector.

“In the coming days I am going to address those involved in this business about re-assessing Andalucía’s hotels”.

Alonso stressed that Andalucía has a magnificent collection of hotels and hoteliers who are conscious of the need to keep upgrading their properties, something they weren’t always able to do during the crisis. On the Costa del Sol alone sixty hotels have taken advantage of the low winter season to improve their sites.

More flights to the east
On Wednesday Alonso signed a deal with the director of Turkish Airlines in Malaga, Halid Koca.
The airline is to increase the number of direct flights to Istanbul from seven to ten per week by June and this is expected to rise to 14 by the end of the year.

Malaga council also announced a new flight route to San Petersburg with airline Vueling and the opening of negotiations with Air China to establish a direct flight to Hangzhou.

Among other news from the first days of the trade fair is an investment of a million euros in 2015 for 11 new tourist projects (which range from the upgrade of residential areas used by tourists to the creation of infrastructures for hiking trails and walking routes) in 11 different towns on the Western Costa del Sol. These are Casares, Istán, Ojén, Marbella, Estepona, Fuengirola, Manilva, Benalmádena, Torremolinos, Benahavís and Mijas.

Source: SurinEnglish

There was a fall of more than 253,000 in registered unemployment from December 2013 to December 2014, an annual decrease of 5.4pc and the biggest since the country joined the eurozone, according to government figures.

Monthly jobless claims also fell by 64,405 for the last month of the year, representing the second largest December decrease on record

Meanwhile, the number of people registering as in work rose by 417,000 in 2014, the first annual increase since 2007. Total employment in the country currently stands at 16.8 million.

The Spanish economy has been undergoing a process of labour market reforms in a bid to boost its competitiveness and stimulate growth after years of recession. The economy began to expand for the first time in over two years in the second half of 2013 and is expected to grow by 1.6 pc in 2015, according to the OECD.

However, unemployment continues to be stubbornly high, and at 23.7pc is still the second worst in the single currency area after Greece.

Spain’s deputy labour minister Engracia Hidalgo said the figures were evidence the country’s reform agenda, which has made it easier for companies to hire and fire employees, were beginning to bear fruit.

The biggest fall in unemployment came in the services sector where joblessness was down by 65,275 people, or 2.2pc. Unemployment did however rise in the construction and industrial sectors indicating continuing weakness in Spain’s export sector.

Source: The Telegraph

Spain posted its first full year of economic expansion since the financial crisis as the country was boosted by a record fall in consumer prices.

The economy grew by 1.4pc in 2014, and 0.7pc in the final three months of the year, exceeding the 0.5pc rise in the third quarter, according to provisional figures from the National Statistics Office.

Annual inflation also fell to a low of -1.5pc in January, the sharpest decline since 1997, and evidence that deflation was providing a boon to economic activity.

Spain has now expanded for the sixth consecutive quarter after undergoing a five-year recession.

The government predicts GDP will rise by 2pc this year, as the effect of falling oil prices provide a fillip for the country’s squeezed consumers.

“The increasingly broad-based recovery suggests Spain is well positioned to take advantage of supportive factors in early 2015, namely lower energy costs, a weaker euro, and a cut in personal and corporate taxes,” said Raj Badiani, economist at IHS Global Insight.

The news comes as the eurozone underwent its biggest ever drop in consumer prices in January, as inflation plummeted to -0.6pc.

Spain’s government has been praised for enacting a series of labour market reforms which seek to make the country more competitive in relation to its eurozone neighbours.

But although the economy may be benefiting from a bout of “good deflation” a prolonged period of falling prices could act as a brake on consumer spending, keeping wages depressed and adding to its debt burden.

Prime Minister Mariano Rajoy also faces the threat from anti-austerity party Podemos in elections held at the end of the year.

At over 23pc, Spain continues to suffer the second highest jobless rate in the eurozone after Greece.

Left-wing Podemos bitterly oppose the swingeing budget cuts and austerity imposed on the country in the wake of the financial crisis.

“The Spanish economy is in a catching-up process, but definitely moving in the right direction,” said Jacques Cailloux, chief European economist at Nomura International in London.

“The decline in oil prices is helping consumer spending in Spain, but this is a one-off. The medium term outlook for wage growth and income generation remains the weak spot.”

Source: The Telegraph

It appears that the traditional foreign buyers are returning to Spanish property with the British market increasing from 15.77% of the total in the last quarter to 18.06% in the last. The French market also saw some increase over the second quarter, but less than the first.
The Russian market came in third with 7.5%, but are showing a downward trend since the last quarter showed a result of 8.08% and 8.79% in the first quarter.

And here is a little table breaking it down in more detail by nationality.

Regards
Andrew Bellés

Net foreign direct investment, broadly in retreat since 2007-08, is growing again, most strongly in Spain, followed by Italy, with Greece and Portugal still laggards (see chart 1). The totals are nowhere near their levels before the crisis but the ebbing tide seems to have turned.

Some of that is the old-fashioned sort of investment that foreign multinationals make in their subsidiaries. General Motors, Renault and Volkswagen are putting fresh money into their automotive plants in Spain; VW has done the same next door. Portugal has also attracted foreign investors, notably Chinese, through privatisations, and Greece is belatedly following suit. Private-equity auctions for stakes in promising firms are becoming ever more bare-knuckled. Other kinds of investment are growing too: specialists are queuing up to buy property, and banks’ dubious loan books. And foreign portfolio investors in a yield-starved world have helped to push share prices up and bond yields down.

The countries of Europe’s southern periphery no longer look like the four horsemen of the apocalypse, even if they are far from being likely Derby winners. The euro seems out of imminent danger of breaking up, but its resulting appreciation has not helped exporters. There are signs of economic recovery, aided by tough adjustments to aid competitiveness, especially in Spain and Portugal. Market reforms, realised mainly in Spain but promised also in Italy, have boosted confidence.

But what is really driving investment is less a presumption that the periphery is set to boom than the hope that undervalued assets and earnings will revert to trend. In addition, a slew of assets are coming to market as banks seek to slim their balance-sheets before the European Central Bank’s asset-quality review this summer, which will shed a glaring light on the loans they have made in the past—unless they offload them beforehand. PwC, a consultancy, estimates that European banks have perhaps €80 billion ($109 billion) of loans to shed this year, of which 20% may be in southern Europe.

Lone Star, a private-equity firm, and JPMorgan Chase, a bank, are putting the final touches to an agreement to buy around €4 billion-worth of Spanish property loans from Commerzbank, a German lender. Foreigners account for over 60% of the burgeoning investment in commercial and multi-dwelling residential property in Spain these days, and for over 70% in Italy, according to Real Capital Analytics, a research firm. In Italy KKR, an American buy-out firm, is negotiating a deal with the two biggest banks, UniCredit and Intesa Sanpaolo, that would sweep a chunk of mainly corporate loans from the banks’ balance-sheets to a shared special-purpose vehicle, permitting both sides to benefit from the eventual profits if the loans come good.

The question is what all this foreign-investment ferment is doing to the countries concerned. Is it helping to restructure economies, stripping out inefficiency and boosting productivity in a way that will make them grow faster? Or is it all about making a fast buck and going home, leaving behind higher asset prices and trimmed workforces? Spain, in particular, has reason to recall unhappily the flood of foreign investment before the crisis which contributed to its property bubble.

Private-equity firms which search out solid companies in need of capital to grow are perhaps the first place to look for Schumpeterian creative destruction. “People must have wondered when we invested a couple of years ago in a firm whose main customers were local governments,” says Jesús Olmos, head of KKR’s new office in Madrid. The firm took a 49.9% stake in Spanish-Italian Avincis in 2010 from Investindustrial, an Italy-focused buy-out group, and helped it develop its helicopter-emergency and offshore services abroad. In March, when Avincis was sold to Babcock, a British firm, KKR collected two and a half times its original investment. In all KKR has invested almost $1.5 billion in Spain since 2010.

Other private-equity firms have similar heart-warming stories to tell, despite the odd cautionary tale. In 2009 Bain Capital bought most of Cerved, Italy’s biggest provider of credit and business information, combined it with the second-largest, strengthened its management and sold on a bigger, healthier firm in December 2012. That same month Bain acquired Atento, a call-centre business, from Spain’s debt-laden Telefónica for over €1 billion. Atento is growing overseas, especially in Latin America, and plans to go public.

When economies crash, private-equity boots are often the first on the ground, especially when it is cheap to borrow money to invest. They came with capital—and a healthy desire to maximise profits—at a time when southern Europe was starved of it. Things may be changing now, though wayward statistics make it hard to be sure. Fewer private-equity buy-out deals are being logged in these countries these days (see chart 2). Preqin, a research firm, thinks that buy-out funds have “dry powder” of almost €5 billion, money raised specifically for southern European funds but not yet committed.

It is no bad thing that foreign (or domestic) investors are taking dodgy old loans off banks’ balance-sheets, freeing them to make needed new ones; there are signs that credit is reviving a bit. Similarly, it is better for property to be in the hands of an investor who has the means and appetite to put money into fixing it, not one who is carrying it at a loss. But the heroic days in which investors waded in, scooped up wobbly companies and set them on their feet again may be drawing to a close.

Source: The Economist

• Number of home sales: annual growth of 11.1%.
• Price per square meter of housing: increase of 0.7%.
• Mortgage loans: 12.1% annual retreat.
• Average amount of mortgages: contraction of 4.0% yoy.
• Number of incorporated companies: annual contraction of 6.8%.

The price per square meter of housing accumulated a fall of 35.5 percent from its peak in July 2007

Purchase of urban property

The number of Spanish residential property sales in April posted a growth of 11.1 percent. This mean there were a total of 30,048 sales in front of a notary. Most of the increase in transactions came from resales, with apartments up 10.9 percent, and single-family homes, up 26 percent. Sales of ‘new’ apartments continue to suffer with a decrease of 8.4 percent. It is believed that the rebound in property sales in recent months could be explained, in part, by normalizing the figures after the end of the tax credit for home purchases at the end of 2012, but also reflects a stabilization of monthly sales.

The average price per square meter of Spanish property sold was 1,216 euros per square meter, representing a slight increase of 0.7 percent.

Mortgage loans

Mortgage loans for the purchase of properties also are showing positive signs with an increase 24.8 percent in April, this is in line with the expansion of housing purchases. However, it should be noted that the loan to value decreased by 4.4 percent to 107,486 euros.

In conclusion, the market is showing positive signs and it appears that the market is still dominated by cash buyers.

Regards
Andrew Bellés

This recovery reflects the collective efforts of Spanish society. In particular, decisive policy actions are now beginning to bear fruit:

• Difficult decisions about spending, taxes, and pensions, have strengthened Spain’s budget and pension system, thus helping protect Spain’s welfare state for the future.

• By forcing weak banks to repair their balance sheets, the successfully-completed financial sector program is supporting the recovery by improving lending conditions.

• These budgetary and financial sector measures, together with crucial efforts at the European level, have helped reduce the government’s borrowing costs to record lows, catalyzing the recovery.

• The labor reform and wage moderation are helping turn job destruction to job creation. Compared to a year before, unemployment fell in the first quarter of 2014 and jobs, as measured by social security affiliations, increased by about 200,000 in April.

• These collective efforts have substantially improved the prospects for creating jobs and raising living standards. Without these efforts, the recession might still be continuing and unemployment still rising.

But the Spanish people are still suffering from the legacy of the economic crisis. Most importantly, 5.9 million people are unemployed, more than half of them for more than a year. As a result, average household income remains below pre-crisis levels. Households, firms, and the government still face heavy debt burdens.

Thus all these efforts need to continue to ensure the recovery is strong and long-lasting. The recovery also has to be inclusive so that the unemployed benefit from more job opportunities. We suggest four priorities areas for action.

1. Helping firms expand, hire, and invest

Firms have been under incessant pressure to cut costs, including by cutting jobs. The necessary process of reducing firms’ debt could help growth and job creation if more of it were to come from creditors restructuring the excessive debt of operationally-viable firms. By reducing these firms’ financial stress and allowing them to grow, all parties could gain. International experience suggests that a comprehensive strategy, catalyzed by the official sector but involving all stakeholders, could help “fast-forward” this process without undermining payment culture. For example, banks could agree to a voluntary code of conduct, similar to that for individuals, which would offer operationally-viable, but heavily-indebted, SMEs a menu of standardized restructuring terms. Given the broader public interest in unleashing the growth potential in such firms, the government should also participate, for example, by allowing outstanding tax and social security claims of such firms to be restructured to sustainable levels if other creditors do the same, without undermining tax compliance.

Debt reduction should also be facilitated by further enhancing the insolvency framework building on the recent improvements, with a focus on helping SMEs, including individual entrepreneurs. In this regard, consideration could be given to introducing a personal insolvency framework that would allow insolvent debtors to have a fresh start after having given up their non-exempt assets and a substantial period of good faith efforts to pay the outstanding debt. Experience in other European countries has shown that such a framework can be designed to be in the interests of the financial sector and preserve Spain’s strong payment culture.

Efforts should also continue to bolster banks’ ability to support the economy. While the banking system is now much stronger and safer and lending conditions are starting to ease, credit is still contracting faster than desirable, which hampers the recovery. In large part, this is due to a lack of solvent demand from firms—fostering debt restructuring (as above) would help. But, despite recent progress, a significant part is due to banks raising their capital ratios more by shrinking lending than by raising capital. Thus to support the recovery, banks should continue to raise capital levels over time, including by limiting cash dividends and bonuses, and reducing costs.

2. Lowering regulatory barriers to boost jobs and growth

Lowering regulatory barriers that constrain Spain’s businesses would help them become more efficient and increase employment. Together with continued wage moderation, this would help ensure the recovery translates into more jobs for the unemployed, greater job security for the employed, and lower costs of living. These actions would also further improve competitiveness so that the remarkable improvement in Spain’s external trade continues—critical to make the recovery long-lasting.

This requires many specific actions across a wide range of fronts. In particular, by implementing the Market Unity law, which aims to remove barriers that hinder businesses from being created and from operating throughout Spain’s regions. For example, some 2,700 regulatory barriers have been identified, most at the regional level—all levels of government should ensure these are quickly eliminated. Removing regulatory barriers in professional services is similarly important—an ambitious draft law needs to be submitted to Parliament without further delay and passed without granting special treatment for vested interests.

Further efforts would make Spain’s labor market more dynamic and inclusive. More needs to be done, especially by regional governments, to help the unemployed improve their skills and find work by implementing plans to more widely use private job placement agencies, improving training services by opening them up to competition, and establishing a single portal for job vacancies throughout Spain. Striking a better balance between highly-protected permanent contracts and precarious temporary contracts would increase hiring on permanent contracts, and thus encourage firms to invest more in their workers. Further enhancing the ability of individual firms to adapt remuneration to their specific conditions would better align productivity to wages and help struggling firms stay in business. These changes would help ensure any future downturns result in fewer job losses.

3. Pursuing growth- and job-friendly fiscal consolidation

Spain has made strong progress in cutting its deficit in the last two years in highly challenging conditions. But the deficit is still very large, and debt, already above the Euro area average, is rapidly approaching 100 percent of GDP. Getting debt to trend down is vital to ensure the recovery is long-lasting and will require further efforts to reduce the deficit. These efforts need to be gradual and well-designed to minimize the drag on growth and employment. In particular, the forthcoming tax reform is a critical opportunity to achieve three key goals:

• To protect public services for current and future generations, revenues need to increase. In particular, there is room for increasing indirect revenues. Raising excise duties and environmental levies, and gradually reducing preferential treatments in the VAT, would bring Spain’s collection effort more into line with its European peers. This should be combined with clearly-identified measures to protect the most vulnerable.

• Help create jobs for the low skilled. This could be done by incentivizing firms to hire the low skilled by cutting the social security contributions firms pay when employing them. To protect the social security system, the cost would be covered by government transfers.

• Promote inclusive growth. The base of income taxes should be broadened by reducing exemptions and special treatments. There is scope for gradually cutting corporate income tax rates to promote growth (though not to 20 percent, which is below the EU average). However, given the imperative to sustain revenues and preserve progressivity, there is less scope for significantly cutting top personal income tax rates.

4. More support from Europe

Stronger policies by Spain’s European partners would help the recovery in both the Euro area and Spain. In particular, by lowering the borrowing costs of Spanish firms and households, and by increasing the demand for Spanish exports. IMF staff has recommended more monetary easing by the ECB to achieve the ECB’s price stability objective, and to support demand while reducing financial fragmentation. It has also urged progress toward a more ambitious banking union.

Source: IMF

Overview
The rules for getting state healthcare in Spain are different from those in the UK. This guide is intended to advise British nationals living, or planning to live, in Spain on the different ways to access healthcare.

Healthcare entitlement
If you are registered to work in Spain and make national insurance contributions then you can get state-run health care on the same basis as a Spanish national. For further information, get in touch with your local TGSS office.

If you registered as a resident in Spain before 24 April 2012, have an annual income of less than €100,000 and are not covered for healthcare though any other means, speak to your local INSS office to register for healthcare in Spain as a resident.

If you are in receipt of a UK old age state pension or long term sickness benefit, obtain an S1 form (previously E121) from the International Pension Centre on +44 191 218 7777. Once issued, register the S1 form with your local INSS office, before you register with your local GP surgery and obtain a medical card.

If you are an early retiree and have recently made national insurance contributions in the UK, contact the Overseas Healthcare Team on +44 191 218 1999 to see if you have entitlement to a residual S1 form (previously E106) for a limited time. Once issued, register the S1 form with your local INSS office, before you register with your local GP surgery.
There will be an important change to this entitlement from 1 July 2014. The NHS Choices website has more information.

From NHS Choices Website:

Changed rules from July 1 2014

What will be changing?
From July 1 2014 you will no longer be able to apply for a residual S1 (formerly residual E106) under which you could currently be entitled to up to 30 months of UK-funded healthcare if you retire early to another EEA country.

What does this mean for me?
Before moving to live abroad, it is important that you check how the healthcare system works in that country and what your entitlement will be if you intend not to work, as this varies from country to country. This means that you will have to access that country’s health system under their rules.
If you are moving abroad on a permanent basis, you will no longer be entitled to medical treatment in the UK under normal NHS rules. This is because the NHS is a residence-based healthcare system. Most people will also not be entitled to use a UK-issued EHIC card to access healthcare abroad.

What if I already have a residual S1?
If you already have a residual S1 this will not affect you – it will continue to be valid until its original expiry date.

What about state pensioners?
If you are a UK state pensioner this will not affect you – S1 forms will still be issued to state pensioners.

Where can I get advice?
For further advice, contact the Overseas Healthcare Team (DWP):
Overseas Healthcare Team
Room MO601, Durham House
Washington
Tyne & Wear
NE38 7SF
Phone 0191 218 1999 (Monday to Friday 8am–5pm).

If you are a worker seconded to Spain, or the family member of a someone making UK national insurance contributions, contact HMRC to see if you have entitlement to an S1 form (previously and E106 or E109). Once issued, register the S1 form with your local INSS office, before you register with your local GP surgery.

If you are coming to study or are currently studying in Spain as part of a UK-recognised course, you may be entitled to healthcare paid for by the UK.

Visitors to Spain
The UK European Health Insurance Card (EHIC) is valid for holidaymakers and temporary visitors who need to use the state health system while in another EU country. If you are not normally a resident of the UK, and therefore do not have entitlement to a UK-issued EHIC, the Spanish authorities may decide to treat you as a private patient.

If you are a resident in the UK, you should apply for your EHIC before travelling to other European Union Member States. A UK EHIC is usually valid for three to five years – but if you stop being a UK resident, you need to return your EHIC to the Department of Health immediately.

If you are a UK state pensioner living in Spain and registered for healthcare with an S1, the UK is responsible for issuing your EHIC to use on a temporary stay in the UK and a third EU country. For more information, telephone the Overseas Healthcare Team on +44 191 218 1999.

The EHIC gives you access to medically necessary, state-provided healthcare during a temporary stay in Spain.

When you show your EHIC, you will receive treatment under the same conditions and at the same cost as people insured in Spain.

Be aware that each country’s healthcare system is different. Services that cost you nothing at home might not be free in Spain (for example, prescriptions).

The EHIC is not an alternative to travel insurance. It does not cover any private healthcare or costs such as a return flight to your home country or lost/stolen property.

From 1 July 2014 you will no longer be able to apply for a reimbursement for copayments made when using your EHIC. The NHS Choices website has more information.

Planned treatment
The EHIC does not cover your costs if you are travelling for the express purpose of obtaining medical treatment. If this is the case you must apply for form S2 from your local NHS Trust.

Oxygen
If you need to receive oxygen therapy during a temporary visit to Spain, you must request it in advance, in writing, from the Spanish authorities. You should send this request at least one month before you are due to travel.

Oxygen therapy needs to be arranged by customers directly with the Spanish authorities. The Healthcare Teams at the British consulates provide a list of contacts and a template letter in Spanish on the Healthcare in Spain website to help you make these arrangements.

Once you have sent the oxygen request directly to the Spanish authorities, it is your responsibility to then follow up with the relevant oxygen provider to confirm your request has been processed.

Prescriptions
Spain uses a co-payment system (information in Spanish) where residents are required to pay a percentage of the cost of their prescription medication. If you are a pensioner and have paid more than you should have for prescription medication, speak with your pharmacists or local health centre to confirm the process in your region to claim a refund.

Contact us
If you have a specific question regarding access to healthcare in Spain, please email the Healthcare Team on enquiries.social-sec.spain@fco.gov.uk or by calling 902 109 356 (in Spain) +34 913 342 194 (outside Spain).

All of the above information has come from the https://www.gov.uk/healthcare-in-spain

Apologies for the lack of new content over the last few (errr….. many) months. This has not been due to laziness on my part, but due to a large increase in sales that has resulted in your truly being unable to dedicate the time needed to posting new content on our Costa del Sol property blog.

I hope to start posting again shortly with a range of relevant articles to help all of those looking to either buy or sell on the Costa del Sol.

Kind Regards
Andrew Bellés

H.I.G. Capital announced today that an investment fund managed by its credit affiliate Bayside Capital entered into a definitive agreement for the acquisition of the first pool of Spanish real-estate assets sold by Sareb, known as Project Bull. H.I.G. Capital is a leading global investment firm with assets under management of over €10 billion and through its Bayside Capital division, is one of the leading players in the European distressed assets market.

The sale, which was advised on by KPMG, Ashurst, Baker & McKenzie and Monthisa, values the portfolio at €100m and allows Sareb to participate in future gains.

Sareb’s president, Belén Romana, has assessed the keen interest that this transaction has sparked amongst institutional investors worldwide. “The quality of the bids submitted shows the confidence that investors have in Sareb and in the recovery of Spain’s real-estate market”, she stated. For its Director of Real-estate Assets, Juan Barba, Project Bull’s success “allows us to be optimistic with regards to the portfolios we plan to put on to the wholesale market over the second half of the year, which will also involve creating investment vehicles”.

In selecting the bid submitted by H.I.G. Capital, Sareb took into account the proposed business plan to manage the properties, which would provide it with a greater potential for return on investment.

Chris Zlatarev, from Bayside Capital, commented: “We are pleased to have been able to partner with Sareb on this portfolio. This transaction demonstrates H.I.G.’s commitment to investing in Spain and growing our Real Estate and NPL business”. H.I.G. Capital has a significant presence in Spain, led by Jaime Bergel, who heads its Madrid office.
This is the first Sareb real-estate asset portfolio to be put on the wholesale market. Sareb was set up at the end of last year to divest the portfolio of loans and real-estate assets transferred by banks, which had received government funding.

The Project Bull portfolio is comprised of residential developments, more specifically 939 homes located in: Andalusia (275), Canary Islands (129), Cantabria (5), Catalonia (38), Balearic Islands (19), Madrid (86), Murcia (44) and the Community of Valencia (343). The portfolio also includes 750 ancillary premises (parking spaces and storage rooms) and one retail unit.

The transaction has been structured via the creation of a Bank Asset Fund (FAB), a first in Spain. Sareb will retain a 49% share in the FAB, whilst H.I.G. Capital will own 51%.

The properties in the hands of the FAB will be managed by an independent servicer selected by H.I.G., Monthisa, a Spanish company with more than thirty years of real estate management experience.

About Sareb
The Management Company for Assets Arising from the Banking Sector Reorganisation (Sareb) is a private institution which was created in November 2012 in order to help clean up the Spanish financial sector, and more specifically the institutions that received government funding. Sareb is committed to selling the acquired assets within a maximum 15-year time horizon. The FROB (Fund for Orderly Bank Restructuring) owns 45% of Sareb and the remaining 55% is in the hands of banks and national and international insurance companies and one electricity company.

About H.I.G. Capital
H.I.G. Capital is a leading global private investment firm with more than €10 billion of capital under management and a team of more than 250 investment professionals. The H.I.G. family of funds includes private equity, debt/credit, growth equity, real estate, life sciences, and public equities. Based in Miami, and with offices in Atlanta, Boston, Chicago, Dallas, New York, and San Francisco in the U.S., as well as international affiliate offices in London, Hamburg, Madrid, Paris and Rio de Janeiro, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well managed businesses. H.I.G. also has extensive experience with financial restructurings and operational turnarounds. Since its founding in 1993, H.I.G. invested in and managed more than 200 companies worldwide. The firm’s current portfolio includes more than 80 companies with combined revenues in excess of €22 billion.

Source: www.higcapital.com

Generating energy at home using renewable sources such as sun and wind thus doing your bit to save the environment is a good thing, right? Not according to the Spanish Government, which has just introduced a draft decree to penalise renewable energy generation at home through higher tariffs.

Under the draft decree, drawn up by the Ministry of Industry, energy generation at home will be hit by a new “support toll” (tarifa de respaldo) 27pc higher than the tariff paid by users of conventional “dirty” energy generated by the big energy companies. Once introduced, the Government will be free to raise the price of this toll as it sees fit.

Protecting the industry (from competition)
The Government argues it needs to control the growth of renewables at home to protect the energy industry as it goes through a “complicated economic situation.” The electricity companies will be delighted to see off competition from home generation.

Spain is a country with abundant sunshine where solar power generation at home has exploded in the last 5 years, as the price of solar panels tumbled by 80%, and the crisis encouraged households to seek ways of saving money.

Higher tariffs are obviously bad news for rural homeowners who are off the grid and have no alternative to renewable energy at home. 30,000 Spanish properties with solar panels will see their bills go up, according to press reports.

Higher tariffs are also bad for the environment, and won’t do anything to help sell homes in rural Spain, where environmentalists like the famous author Chris Stewart have bought. The green lifestyle is part of the attraction for many Northern Europeans buying homes in rural Spain.

Once the decree is passed, companies and households that generate their own energy from renewable sources will have two months to register and start paying the new toll, or face fines of up to €30 million and being cut off the grid.

In other European countries like Holland and Germany, solar panels are subsidised and households can sell their energy back to the grid. The EU policy towards renewables is generally in favour of encouraging them.

So solar power at home is encouraged in over cast Germany and Holland, but discouraged in sunny Spain. Makes perfect sense.

Author: Mark Stucklin

Additional information: Petition against the tax