Weekly Report

Business Over Tapas (Nº 197)

Business Over Tapas (Nº 197)

By Lenox Napier and Andrew Brociner – Sent by José Antonio Sierra (CCLAM)

sábado 25 de febrero de 2017, 02:04h

25FEB17.- A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners: With Lenox Napier and Andrew Brociner. Consultant: José Antonio Sierra - For subscriptions and other information about this site, go to businessovertapas.com - email: [email protected] - ***Now with Facebook Page (Like!)*** Note: Underlined words or phrases are links to the Internet. Right click and press 'Control' on your keyboard to access. Business over Tapas and its writers are not responsible for unauthorised copying or other improper use of this material.


Not quite the way that we wanted to be going, but, post-Brexit, the British expats in the EU will be able to get a proper ID card again and there'll be no more passport and silly paper from the police station combo any more (of course, it almost goes without saying that it was a British ex-pat who campaigned hard back in 2008 for the current 'we don't want an ID card system for foreign EU residents’). We Brits, we don’t like ID cards (it’s a tradition).

The passport carries the photo (although, at least in the case of the British, a number which changes with each re-issue) and the paper or card from the Interior Ministry carries the ID number – in our case: the ‘NIE’. Other EU nationals of course have a pocket-sized ID card to match with their green Spanish ‘tarjeta comunitaria’.

How much more useful (he said ironically) to just have an ID card – a ‘Tarjeta de Residencia’ – like proper foreigners have.



‘An increasing number of property owners are taking legal action against local councils over the forced payment of 'plusvalía' (increased value) tax when they sell up. Town halls are continuing to charge the seller this tax even if the property is being sold at less than the price they originally paid for it. The loophole arises as the value of the home that the council uses for it calculation is its 'valor catastral', (official taxable or rateable value). Following the pre-crisis property boom, real market values rose well above this official valuation and councils can still therefore keep collecting the money, which is an important source of revenue, even if the seller is losing money...’. From Sur in English. The change in the rules is explained here, with chartered accountants Cervantes Alarcon: ‘...The disputed law establishes a tax on the surplus value of urban land, a tax that is earned at the time of sale of the property and which is calculated objectively from its cadastral value and the years (between a minimum of one and a maximum of twenty) during which the owner has been the owner of it. It is calculated so that it does not take into account whether the property has gained value or not, which generates a fiction of economic increase that, in addition, prevents the owner from presenting any evidence to the contrary...’. This is a reversal for the town halls, says El Español, because they have relied heavily on plusvalía taxes in the past.

‘...From Deutsche Bank to the National Statistics Institute (INE), while the actual figures may differ, the trend does not: prices are rising, and have been for around three years. This trend is further confirmed by figures published this week by the Spanish Notaries Association, which has reported that the average price per square metre in Spain increased by 5.67% in 2016 compared to 2015. The notary data also showed that foreign interest in Spanish property remained strong in 2016, with 13.25% of all homes bought last year by non-Spaniards. In real data terms, this equates to approximately 53,000 homes sold to foreigners, of which 19% were bought by British buyers...’. Excerpt from an article at the commercial site Viva here.

Property in Spain is a good investment. From Mark Stücklin’s Spanish Property Insight: ‘The Spanish arm of global banking and financial services firm BNP Paribas has tipped real estate as good investment to protect returns from inflation, a conclusion I came to years ago. A recent report from BNP Paribas Wealth Management in Spain forecasts the current period of low inflation will come to an end, suggesting investors need to look for assets that protect real returns...’.

Private Investor Today is less sanguine: ‘Most bank repossessions in Spain are now located in ‘areas of little demand’. Here.

El Confidencial has a report about the quietly rotting ‘ghost promotions’ that dot Spain, like the ‘Soto de Real’ in Buniel, Burgos. ‘No one will ever live here’...

One thing to be aware of, before buying a home in Spain, is the possible effect on your funds of the dreaded ‘Modelo 720’. ‘...Modelo 720 has three reporting categories, based on bank accounts, investments and immovable property. You have to report all assets in a particular category if the value of your total assets in it amounts to over €50,000. This only applies to assets located outside Spain...’. (Blevins Franks here).

‘Do you know of the importance of studying a home’s Energy Efficiency Certificate? It’s worth studying the Energy Certificate as this could help you bag the best price for the home of your dreams. For every property sale to be registered, an Energy Efficiency Certificate (CEE) must be included within all the documents. The Regulations state that the efficiency rating must be displayed in all selling and letting promotional material and a copy of the full certificate made available to every property enquirer....’. From Survey Spain (a network of chartered surveyors).

Lawyers called Lexland are offering help to those caught by the ‘abusive floor clause applied to Spanish mortgages. Their site is here. (Remember, BoT does not recommend any commercial service mentioned in our newsletter over any other).


We have heard of the ‘Pueblos más bonitos de España’. Now 10 Viajes Increibles has put together a route to visit all of them. It will take 6,532 kilometres, so don’t forget to check the oil before you go...

There’s a scam being done by some British visitors to Benidorm and elsewhere, according to a report in El Confidencial. Certain unscrupulous legal firms in the UK, known as ‘claim farms’, have been able to sue Spanish hotels for various sums based around the vague idea of an uncomfortable holiday. These firms search for clients returning from a holiday and offer them to get their costs returned in exchange for making spurious complaints. There are even vans visible in Benidorm bearing the logo ‘Claim Today – ask for details’. An £800 holiday can cost the hotel£ 6,000 (that would be with the ‘legal fees’). Claims of this type rose last year from around 1,000 the year before to over 10,000 in 2016. The law in question is the ‘Consumer Protection Act of 2013’ (here in pdf).


What happens when the titular owner of a bank account dies? According to an article here in El País, the inheritors need to provide the correct paperwork to take over the funds. They have twenty years to do so. Even after twenty years, the unclaimed money goes to the Public Treasury. ‘The idea of the money ending up in the hands of the bankers is an urban legend’, says a lawyer speaking to the journalist.

The Red Cross – La Cruz Roja in Spain – is reaching out to the expat community with a new scheme to support British people living on the Costa Blanca. The charity and the British Embassy launched the European Residents Project and the Red Cross will act as a coordinator and bridge between the many charities and associations. Pedro Dominguez is at the helm of the scheme and is based at the Red Cross headquarters in Alicante; his first task is letting the community know what resources are available. “The goal is to let the British community know the Red Cross is here and we can help them with everything they need; we will try our best to help,” he said...’. More from Xpat News (was The RTN).

‘Hundreds of thousands of elderly British people living in EU countries could find themselves in a “very difficult situation” if they fall ill after Brexit. The lack of reciprocal healthcare agreements between the UK and EU countries such as Spain, which is home to more than 100,000 British pensioners, risks leaving patients who cannot afford private treatment in limbo, heard the Health Select Committee. UK citizens who have lived abroad for many years are not eligible for NHS care, so they would not be able to return temporarily to Britain for treatment, said Jane McHale, professor of health law at the University of Birmingham...’. From The Independent here. More: ‘...“We’re talking possibly of a figure between 100,000 and 300,000 people being forced to return in a state of poverty to this country.”...’.

(From a Brit writing on Facebook :) ‘My state pension payment is two days late so I phoned the Pension Service, long wait and then I heard a very disturbing message - so I spoke to someone for clarification. Oh yes, they said, all pension payments will be 2/3 days late as now payments go through the American Bank "Citibank" and the USA had a bank holiday (and they do have lots of them). The Government use an American Bank due to costs! SO all UK pensioners living outside the UK, Get writing letters - International Pension Centre, Tyneview Park, Whitley Road, Benton Newcastle upon Tyne NE98 1BA’. Tell 'em it's a Poor Show!


El Modelo 720: ‘The European Commission believes that fines imposed by Hacienda on those who do not correctly report their assets abroad are "disproportionate", "discriminatory" and "in conflict with the fundamental freedoms of the EU", requiring immediate changes or, failing that, threats to go to the European Court of Justice...’. While the Modelo 720 is merely informative, fines for misreporting or failure to report are massive. The story is at El Mundo here.

‘Starting in July, a regulatory change takes effect in the IVA Law that will generate an enormous amount of information for Hacienda, allowing them to hold a very detailed understanding of each taxpayer in Spain. The amendment to which I am referring is the entry into force of the ‘Sistema de Información Inmediata’ (SII), which is basically summarized in the future obligation of ‘large companies’ (anyone that bills over six million euros a year) to send their IVA returns electronically to the Tax Agency...’. This means about 80% of all invoices will in future be returned to Hacienda who can then compare a contributor’s spending against his declared income. Meneame has the story here.

‘The downward manipulation of Spanish public debt. There are some items of Spanish public debt which are eliminated from Bank of Spain’s accounts, reducing the total figure. In other words, 450 billion euros ignored. Basically, what is being removed is public companies’ debt, the debt issued by a public institution in the hands of another public institution, as well as other adjustments, which really should not be discounted’. The full story is at The Corner here.

The Spanish built AVE system between Mecca and medina in Saudi Arabia is running into fresh over-costs at around 425 million euros, says Vozpópuli here.

The black economy in Almería stands at 32% of the GDP - the highest in Spain. The towns with the highest black economy in the province are Roquetas, Adra and El Ejido. Story here.

‘Spain will drop out of the group of the world’s 25 largest economies within the next three decades, according to a new report by the consulting group PwC. According to the forecast, and using International Monetary Fund (IMF) figures, Spain will fall from its current 16th position on the global GDP rankings to 17th over the next 15 years, and then gradually slip down to 26th place by 2050...’. From El País in English here.


Pedro Sánchez suggests an ‘alliance of progress’ with the Podemos and the unions if he manages to return to his post as secretary of the PSOE. More here.

Mariano Rajoy has answered a question in the Cortes from Podemos about corruption, saying that it is a mistake to exaggerate the corruption in Spain since ‘we are a great nation’.

The President of Murcia, Pedro Antonio Sánchez (PP), has been accused of misuse of power and faces a judicial inquiry in early March. Murcia Today reports on this here. The issue is causing stress between the Partido Popular and Ciudadanos in Madrid. El Español has more on this here. Late news: the prosecutor for Murcia has been relieved of his post. El País.


Bankia: ‘...As part of the epic, multi-year criminal investigation into the doomed IPO of Spain’s frankenbank Bankia – which had been assembled from the festering corpses of seven already defunct saving banks – Spain’s national court called to testify six current and former directors of the Bank of Spain, including its former governor, Miguel Ángel Fernández Ordóñez, and its former deputy governor (and current head of the Bank of International Settlements’ Financial Stability Institute), Fernando Restoy. It also summoned for questioning Julio Segura, the former president of Spain’s financial markets regulator, the CNMV...’. Found at Wolf Street.

Feature: Frequently named amongst the most corrupt countries in Europe, Spain has had more than its fair share of money-grubbing mayors and perfidious politicians. From a shady short list of hundreds The Olive Press has narrowed down their nefarious numbers to... ‘The top-ten corrupt mayors and politicians in Spain’s turbulent political history’. Here.

Bribes and other corruption in the AVE routes across Spain – a map and the story here.


‘Catalonia wary about Madrid’s offer to talk, but willing to sit down. Regional leader warns he will not give up on plans for a binding referendum even if talks get underway’. Headline from El País in English. Story here.


‘Iñaki Urdangarin, the brother-in-law of King Felipe VI of Spain, was sentenced to prison on Friday in a business fraud case that represented a major embarrassment to the country’s monarchy, even though the king’s sister, Princess Cristina, was found not guilty. A regional court on the island of Majorca sentenced Mr. Urdangarin to six years and three months in prison, far less than the 19 and a half years sought by the prosecution, for his business dealings relating to the disbursement of millions of dollars of public funds for sporting events...’. From The New York Times here. The left-wing site Kaos en la Red says that there appears to be a chance that both Urdangarin and his ex-partner Diego Torres will avoid jail altogether by paying a bail. A NSFW cover illustration from El Jueves pokes some fun at the situation, with the announcement that la infanta will assuredly go to jail (but just for a brief visit here and there).

From Typically Spanish: ‘The judge in Instruction Court 45 in Madrid has decreed the opening of the oral case against the former president of Caja Madrid, Miguel Blesa and the former general director, Ildefonso Sánchez Barcoj for a continued breach of conduct by awarding large pay rises to their cronies. The oral case is expected to open in June...’.


Rajoy: ‘..."I hope that we will soon be able to tell them: Don't worry, nothing is going to change for the Spaniards in the United Kingdom, nor for the Britons in Spain," he said...’. The story in The Local suggests that Gibraltar might be a key sweetener from the British in all this. The Gibraltar Chronicle also tackles (exactly) the same story here.

‘There are a few groups around that are supporting the rights of the British ex-pats in Spain and the Spaniards in the UK. Not many, but a few. The problem being that we foreigners, whether British living here or Spanish living there - (or German or French...) - have no voice in the political process. We are often referred to as 'hostages' these days. ... This is the blog from EuroCitizens (based in Madrid) here and their Facebook page here. Here is Europats: Representation in Spain page is here and Facebook page here...’. Taken from Lenox’ blog here.
EuroCitizens gets a write-up in 20 Minutos here: ‘Worries and fear among the British ex-pats living in Spain following the Brexit. “We have to do something” ’.

‘Democracy and human rights are British values as much as European ones. The EU has been a major force in the democratisation of the European continent, and has actively contributed to the promotion of democracy in other regions of the world. But this important task may become more difficult if Brexit finally occurs. The UK is a major diplomatic, military and economic power, and a consolidated democracy that provides political inspiration world-wide. Brexit has the potential to weaken the capacity of both the EU and the UK to promote their shared values. As with many other aspects, with regards to the promotion of democracy and human rights, Brexit would be detrimental to the interests of both parties...’. A study from The Royal Institute El Cano called ‘Towards a post-Brexit ‘partnership for democracy’ between the EU and the UK’.


Axel Springer (owners of Bild and Business Insider) are to go ahead with their new news aggregator, called UpDay. This will be available exclusively on Samsung phones and the media giant says it is negotiating to pay the Spanish daily newspaper association the infamous AEDE Canon (the ‘Google Tax’). This has put added pressure on the regular Spanish aggregators, like Meneame, Facebook, Reddit and indeed anyone who posts, copies, promotes or links their own or somebody else’s stories, blogs or features. Is it time to start posting news from a safe place abroad? The story is here.

A new free newspaper launched on the Costa Blanca last week, called Xpat News. Not so new, perhaps, according to what they say here.


The Housing Sector: the Stock of New Houses, continued

by Andrew Brociner

When we looked at sales, we saw that there has been some incremental increase recently. We can separate the total number of houses sold into new and second-hand.

The sales of second-hand houses has shown a steady increase for the last few years. The sales of new houses, however, continues its downward trend:

As can be seen, after years of staying at the same level, for the last few years there has been quite a divergence, which is growing. The sales of second-hand houses have increased while that of new houses continues to decrease.

Sales of new houses are now making up only a fraction of what they once did. Given the stock of new houses that started to accumulate on a mammoth scale during the boom, it is no wonder that the reduction of this stock is so slow and that there are so many still left. The demand for new houses seems to have dried up in the last few years with a clear preference for second-hand houses emerging. This interaction between the supply and the demand for new houses does not bode well for an improvement in this area.


‘Flash flooding has caused major destruction on the Costa del Sol last weekend. Buildings flooded, roads collapsed and cars were washed away as a storm lashed the Málaga area. Emergency crews were called to more than 200 separate incidents...’. The Olive Press has the story here.

A guide to the ‘Social Security in Spain. All you need to know about it. Learn how to claim the benefits of the Social Security in Spain’. A commercial pitch from Caser here.

A number of foreign plagas have arrived in the Spanish orchards and fields recently, including the palm tree beetle (Rhynchophorus ferrugineus or in Spanish Picudo rojo from Indochina), the potato moth Tecia solanivora, the rice snail Pomacea Bridgesii and – most worrying of all, the olive bacterium called Xylella fastidiosa which is laying waste to Italian orchards and is now in the Balearics. Sombre reading at El Diario here.

A Mallorquín rapper by the name of Valtonyc has been sentenced to three and a half years prison for a song celebrating terrorism, insulting the Crown and threatening the ex-King Juan Carlos. Europa Press reports the slightly draconian sentence here.

The 28th of February is a fiesta in Andalucía to celebrate the formation of the autonomous region on this date in 1980. The eight provinces became one autonomía, even though Almería failed to vote for the proposal. Acción por Almería has a Facebook presence here.

Well, who is for a trip to the drive-in cinema? The first one in Spain, the Autocine Madrid RACE, opens on Friday 24th February in Madrid. The story and video here.

A comic look: ‘These are the 17 worst things about living in Spain: (This article is laden with sarcasm)’. From The Local here.

‘The Beach Boys are coming to the Costa del Sol. The legendary quintet will Get Around the costa this summer as they are the latest stars to be added to the 22nd Fuengirola Music Festival. They will join the likes of Sting, Jamie Cullen and Michael Nyman at the SohailCastle in June and July. Exact dates are yet to be announced’. The Olive Press here.

See Spain:

Welcome to Spain’s largest labyrinth. It’s a 5,000 square metre puzzle in Villapresente in Cantabria. The map, video and article are at Postureo Cántabro here.

‘As carnival gets underway across Spain this week, The Local gives you the run down on where to see some of Spain's wackiest celebrations’.

Spanish cities from the air – drawings from the XIX Century with Geografía Infinita here.

The old man who is building an entire cathedral, Nuestra Señora del Pilar, by himself in Mejorada del Campo, a town near Madrid. An astonishing half-hour video called ‘The Madman of the Cathedral’, in English, with RT.


‘Once I was the King of Spain’. YouTube here, with our thanks to Scar.

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