Business Over Tapas 20th  December

By Lenox Napier and Andrew Brociner

miércoles 22 de octubre de 2014, 11:21h

A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners:  with Lenox Napier and Andrew Brociner. For subscriptions and other information about this site, go to businessovertapas.com - email: [email protected]

Note: Underlined words or phrases are links to the Internet. Right click and press 'Control' on your keyboard to access.


Spain is slowly leaving behind the terrible crisis that has punished the country since 2008. The Government says so. The bankers – while not going as far as lending money again – say so too. It may take another year before the citizens arrive at the same opinion. Here at Business over Tapas, we have reported on the many problems that beset foreign property owners and other readers. In 2014, we shall do the same.

This newsletter will return, saving any fresh crisis, in the New Year. Until then,

A Merry Christmas and a Happy New Year to all our Readers.


Renting out your home in Spain for short-term lets for some extra pin-money? The Mail warns that you won't be able to for much longer: - '...An estimated one million properties in Spain are owned by Britons. Many are inhabited all year round by expatriates but hundreds of thousands were bought as holiday homes.

Until recently, it has been relatively simple for British owners to rent out their properties in the two countries. But under the new rules, those with second homes in Spain will need a licence from the local council, which could incur a fee.

They will also have to meet strict conditions, such as being contactable 24 hours a day to deal with problems such as water leaks or power blackouts. Owners will have to pass regular safety inspections and obtain hygiene certificates. Failure to comply will lead to hefty fines'... The story comes with a comment from one home-owner on the Costa Blanca who writes: - 'Finally we have to accept that these are not very clever people – and we now have to say so in public and without embarrassment. How much more anti-Spain publicity is to be generated in the world's press by the crass stupidity of this brainless PP government? What with Gibraltar I think the PP is likely to be voted off the whole Spanish coastline at the next council elections (at least they won't be returning to Jávea after the last 30 years of what we suffered here in local government and we shall certainly be campaigning against them, most strongly!). But as socialism has never been the answer to any question where will we be led? These steps are going to cause massive damage to the tourist market and, down the line, to our excellent restaurants.

Remember, please, people who book villas, book villas. They do not go to apartments. They do not go to hotels. The result? They will go to another country!'... 

The Mail has the last word: '...Until now, in most parts of Spain, anyone can let out their homes provided they pay full tax and declare all revenues. But the recession-hit country is desperate to boost revenues and officials suspect that second-home owners are not paying billions of euros in tax.

The powerful hotel industry has also been lobbying for the changes as the surge in private rentals is hitting its business. Catalonia, the Canary Islands and the Balearics already have tough restrictions. In the past year, thousands of apartment and villa owners in these areas have been fined up to £15,000 each'.

'Thousands of homes belonging to British families living in Spain are under threat of demolition. Planning permission granted by local authorities can be overruled by the regional government, leaving the owners with no building and no compensation.

Now the British government is stepping in to try to help'...  From BBC News Video

The Telegraph carries a similar story: 'The UK Foreign Office has said the risk of British-owned properties in Spain being demolished for breaching local planning rules is a "substantial problem"'...

The AOL site exaggerates the foregoing a trifle with - 'Thousands of British-owned homes in Spain remain at risk from demolition from the authorities. It's estimated there could be 1m Spanish properties deemed illegal due to construction industry, developer and town hall backhanders. Even the Foreign Office has admitted it's a "substantial problem" for many Brits. If you're at risk, what can you do?'...   

'The retired ex-pats whose Spanish homes now may be demolished are the victims of corruption on a monumental scale. I can imagine that many of those reading the plight of these buyers would think they had it coming. Many will probably say they should have done the proper checks, were naive and even greedy.

It’s certainly true that some were too trusting – a fact many readily acknowledge. They put faith in local estate agents, lawyers, developers and officials, without realising that these groups were often all in cahoots'...  Opinion piece in The Olive Press.

And so it goes: a fall in property value, land-grab, 'illegal homes', off-plan fraud, endemic corruption, no quick and reasonable legal protection here, the world asset declaration, no rental income, a new home-inspection MOT coming in, the energy inspection, the PO Box mail return... it's a wonder that any foreigner (apart from the rich ones who are offered the Golden Visa) is buying in Spain...
Helen and Len Prior will have been in their shed for SIX YEARS come January.

'The Secretary general of the PSOE in Almería, José Luis Sánchez Teruel, says that the Socialist Party will submit a motion in all the municipalities affected by the problem of illegal dwellings, asking for the creation of a working group made up of town halls, the Junta de Andalucía and the home-owners' associations, to seek solutions to the problems of these buildings'... says La Voz de Almería, which notes that 'there are around 13,000 illegal buildings in Almería, which is just 4% of the total number across Andalucía, says the PSOE'. A number invented, apparently, by the same organisation. The same paper, in a second article which appeared on Friday, then reports that the Junta de Andalucía insists 'there will be no amnesty'.

'Despite the bursting of the housing bubble, with mortgage lending and property sales sitting at their lowest recorded levels, the Balearic Islands appear to have escaped the economic crisis, registering a marked increase in tourism and housing purchases in these recent years of recession.

Data from the General Council of Notaries confirms that, in 2008, during the worst period of the crisis, a total of 1,642 properties were sold in the Balearic Islands to foreign home buyers, and this number has continued to grow, to more than double, reaching a total of 3,571 transactions closed in 2012. In addition, so far this year 1,412 transactions have already been closed – according to the latest available data up to June – almost the same number as were concluded throughout the whole of 2008'... From Kyero.

'Spanish property has been on a rocky road in recent years but with 2014 just around the corner, investors will be looking to see whether the coming 12 months will be more of the same or if there are brighter times on the horizon. The Spanish Brick is confident that things will be looking up, however, and in 2013 there have been some positive signs. Indeed, the year has seen the purchasing power of overseas buyers confirmed, increasing 23 per cent in Q2 and 25 per cent in Q3 year-on-year. So will it be more of the same in 2014?'... From Property Showrooms.

'The fall in the price of housing may have bottomed out. According to the National Statistics Institute, house prices rose 0.7% in the third quarter of 2013. It's the first rise since the middle of 2010. Thus, the price of a house returns to positive rates after 12 quarters showing quarterly setbacks. By the second quarter of this year, the price of housing was moderating its drop by nearly six points, registering a decline of 0.8%, compared to -6.6% in the first quarter'... From El Huff Post.

'Residential tourism sector calls for bold fiscal reforms to attract foreign investors. Entrepreneurs and tax experts highlight the economic value of the sector and flag up the risk of losing competitiveness'. The story is at Sur in English. Some people making sense!

A popular site with those who agree with the ecologists that the Spanish coast is covered in concrete is Urbanismo Patas Arriba, here quoting an article from El País about the oversupply of empty houses: -  '...The stock of new homes rises in Andalucía to 160,446 units, of which 38,862 are in Málaga, according to the latest estimates of Unicaja. The number has been reduced by 30,000 properties at regional level from 2010, a third of them (11,900) sold in this province.

The Costa del Sol is littered with residential complexes and with few tenants because the sale of real estate has been minimal. Posters of real estate from banks and promoters, or simple 'for sale' ads with private phones, are highly evident in the number of developments in the area of Santangelo, in Benalmadena. The urban plan to develop this sector succumbed  without public facilities or a shopping area, and only about 750 dwellings of the approximately 2,000 initially projected were ever built. Of these, half stand empty'...

So we end this section with advice from The Telegraph, which begins with: 'Five tips to avoid a rip-off when buying a holiday home - As freezing temperatures begin to bite in Britain, buying a place in the sun can be tempting, but it's essential to do your homework'. 


Barcelona and Paris were joined on Sunday by the first direct High-Speed Train between the two capital cities, for a riding time of 6 hours and 25 minutes. Spain has wider rail tracks than the European norm (apparently to frustrate invasions from France), but this has now been homogenised for the route. No doubt a great plus for tourism, the trip costs 170 euros one way.  

But why stop there? From The Guardian: 'A group of European space companies plans to offer "budget" trips to space tourists from Spain's Canary Islands.

Grégoire Loretan of Swiss Space Systems, the company leading the push, said trials were expected to begin in 2020 of technology that would allow the public an experience previously accessible only to astronauts and millionaires.

"Our goal is to democratise the access to space," said Loretan.

'Hoteliers from the Balearic Islands have between them invested in the last thirteen years more than 10 billion euros in Mexico, where, besides building hotels, have participated heavily in the construction of luxury homes, which are in great demand in United States and Canada'... From Preferente. Added to the investment boom in the area of Cancún and the Maya Riviera, where Balearic entrepreneurs currently have 22 resorts with more than 80,000 beds, new Spanish hotels are beginning to appear on the Mexican Pacific coast.


'Spain will exit its bailout program for the cleaning up of its banks in January without the need for any safety net after the European Central Bank, the European Commission and the IMF gave the country a pass mark in its last report on the fulfilment of the commitments it acquired, albeit with provisos. “Spain has pulled back from severe problems in some parts of its banking sector, thanks to its reform and policy actions,” the ECB and the EC said in a joint statement'...  From an interesting piece in El País in English.

Sheldon Adelson's Eurovegas gambling city outside Madrid has regretfully been cancelled by mutual accord after negotiations between the eccentric magnate, his group Las Vegas Sands and the Madrid regional government.  So much for smoking over the One-Armed Bandits. El Diario provides 'The real reasons for the Eurovegas exit'. 

'Spaniards earn more than three times the global average income of $2,920 (€2,120), new research shows, but still pocket an average of only $7,284 a year. The research from Gallup puts Spaniards a long way behind the world's top earners Norway, where the median per capita income is $19,308 per year.

They are also some way behind Sweden where individual earnings are a median $18,632 and Luxembourg, where this figure is $18,418. Rounding out the top five biggest earners are Denmark and Finland. But the Spanish average salary of $7,824 is still far more than the average global individual income of just $2,920'... Found at The Local.

'...As mortgage defaults rise, lenders will have to set aside money to cover losses, hurting profits, according to Juan Villen, head of mortgages at Spanish property web site Idealista.com. Spanish banks absorbed 87 billion euros ($120 billion) of impairment charges last year after Economy Minister Luis de Guindos forced them to record more defaults on loans to developers. The government took 41 billion euros in European assistance to shore up its failing lenders'... Bloomberg tells of Spanish mortgage woes.


'The Anti-corruption prosecutor's office is seeking prison for a former manager at Spain's main royalty collection society, the SGAE, who allegedly charged nearly 40,000 euros to a company credit card for trips to brothels.

Pedro Farré was a top aide to SGAE's then-chairman, Teddy Bautista, who was himself arrested in July 2011 along with seven other SGAE members on suspicion of embezzlement. The investigation has since found that former managers of the collecting society diverted as much as 87 million euros between 1997 and 2011'... From El País in English.

'The Anti-corruption Prosecutor Pedro Horrach has presented an order which calls for open proceedings against Carlos Cruzado, president of the tax-collectors' union Gestha, for accusing Hacienda of giving a preferential treatment to the Princess Cristina. Pedro Horrach believes that "accusing the inspectors of the tax agency to manipulate tax data is a serious, and false accusation"'. The story at El Mundo.

'The premier of the Madrid region, Ignacio González, on Wednesday defended his own innocence and that of his wife, Lourdes Cavero, after a judge named her as an official suspect in an investigation into possible money laundering and tax fraud in connection with a luxury penthouse the couple owns in the area of Estepona, on the Costa de Sol'... Story at El País in English. A video of the apartment is here. Late News: Luckily, the Anti-corruption folk are on the case, and will appeal... (El Mundo)


'Ex-pats no longer living in the UK are being warned to keep meticulous records when it comes to visiting friends and family back home. This is because the Finance Act 2013 has changed the rules surrounding non-residency and the payment of tax.

As of April 1st this year, the Statutory Residency Test has come into play, which determines whether ex-pats are eligible to pay UK income, capital gains and inheritance taxes.

Christmas Gift Lists 2013 There has been an increase in the number of challenges to non-residency by HM Revenue & Customs (HRMC) in recent months and good record keeping can be the key, reports the Financial Times'... Good advice from Tumbit.


Satisfaction in diplomatic circles – Mariano Rajoy to meet President Obama in the White House on January 13th.

'Separatist parties in Spain's north-eastern Catalonia region on Thursday agreed the wording of an independence referendum proposed for November 2014 but the Spanish government immediately said the vote was illegal and would not happen.

The Catalan regional government head, Artur Mas, said the vote would ask two questions: "Do you want Catalonia to be a state?" and: "Do you want that state to be independent?"

Spain's justice minister, Alberto Ruiz-Gallardón, immediately said the vote could not take place because the constitution would not allow it'... From The Guardian. A talk given by Inocensio Arias (ex-ambassador to the UN) in Almería on Tuesday, noted that 'independence for Catalonia is not impossible, but it won't be a walk of roses, neither for Catalonia nor for Spain' (El Ideal). Meanwhile, the Catalonian Government has launched an international advertising campaign called 'Let Us Vote'.


'In an effort to head off a diplomatic crisis, the Popular Party (PP) government is planning to limit the Spanish judiciary's powers to investigate human rights crimes in other countries, Justice Ministry sources said. Proposed changes to the law that outlines the judiciary's jurisdiction come after the High Court last month issued arrest warrants for five top Chinese officials, including China's former president Jiang Zemin and former prime minister Li Peng, alleging they were responsible for "genocide, crimes against humanity, torture and terrorism" against Tibetans in the 1980s and 1990s. It based its prosecution on the doctrine of universal justice'... From El País in English. Well, that didn't last long!


The Erosion of Universal Health coverage in Spain in PDF form from The Lancet:  '...After the Royal Decree implementation in September, 2012, about 873,000 non-residents (probably including migrants no longer living in Spain) have lost entitlement to comprehensive care. The government justifies the policy on austerity grounds, even though public expenditure on health care in Spain was already among the lowest in Europe before the recent changes'...


'The PP has leaked a document showing that 70% of all prescription medicine ordered by the Junta de Andalucía in its last source auction is coming from labs in Asia, and what’s worse, some of these labs have been banned from selling to the USA after their FDA banned them'... From David Jackson.

An El País leader talks of another form of waste: 'After each election, the new mandarins name people of their own party and they remove valuable officials from their posts, condemning them to staying out of useful work but retaining their salary. Both a human and an economic waste'.

Politics, as they say in Spain, is everything.

'Brussels has accused seven Spanish football clubs of receiving illegal state aid. The investigated teams are Real Madrid, Barcelona, Athletic Bilbao, Osasuna, Valencia, Hercules and Elche.

The Minister of Foreign Affairs, José Manuel García Margallo, says that the Commissioner for Competition, Joaquín Almunia, will be responsible for the investigation. The Spanish authorities have one month to respond'... From El Huff Post. Margallo, says the article, 'will give battle to defend the Spanish clubs, because he is convinced that “there is no irregularity” because Spanish football is part of the “Marca España”'. Another newspaper, Público, says that the three Valencia clubs, Valencia, Hercules and Elche, could even be forced to close down.

'They are members of Spain’s Guardia Civil. But instead of pursuing undocumented immigrants like the rest of the police in Spain, they are there to defend them from the crimes to which they often fall victim.

“We frequently dress as civilians and go around the province to gather complaints in Guardia Civil barracks, and in homes, hospitals and non-governmental organisations [NGOs],” Santiago González, a member of the Guardia Civil immigrant support team (EDATI) in the southern region of Málaga, told IPS'... From Truthout.


As it turned out, the huge casino empire outside Madrid, Eurovegas, never quite made the starting line. Other mega projects that also failed to deliver are included in a piece in El Huff Post called: 'Failed Spain, Seven Projects that We shall Never See'. Heh, with pictures.



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