Antonio Flores’ Blog

Morocco’s Exchange Control Office has issued a statement warning citizens of this country against buying property in Spain; according to them, you can only buy property in Spain if you have a special permit issued by the Government in Rabat, and that buying without the said safe-conduct is a matter for the Criminal Courts.

We have some questions for the Office des Changes:

• Have you made a search on the public Spanish Land Registry website www.registradores.org to know who has, and hasn’t, property in Spain?
• Do you have enough space in your prisons to accommodate the tens of thousands of Morrocan families that have a second home in Spain?
• Does this law also apply to the  hundreds of Morocco’s Government officials who have traditionally acquired real estate on the Costa del Sol, inclusive of Government ministers?Is this law real, or is just a way to make prospective purchasers uncomfortable with what is verifiable reality?
• Are you going to ask the Spanish Government to request that investors produce the permit, as a prerequisite for buying,

And there is a question I personally have: has anyone ever seen this permit? 

Antonio Flores Immigration Morocco Investment, Office del Changes, Property Spain, Spanish Immigration

The Spanish Government has officialy released its plan to bring Spain out of the recession by offering residency to non-EU citizens who buy property worth over €160,000. The specific conditions are yet to be legislated on but the Secretary of Commerce, Jaime García-Legaz, has indicated that the property value is “balanced” and will not give rise to a massive demand for residency permits. He also said that the proposition is directed at the Chinese and Russian markets.

Three things we would like to comment on:

1. If this is to happen, Spain risks being again a victim of its own success because the demand for property in Spain can be unprecedented, far more than in the boom years.
2. China and Russia will only be tip of the iceberg as their citizens currently find less problems in obtaining tourist visas than citizens of countries like say Iran, Pakistan, Egypt etc.
3. If this proposition is finally approved, raising property taxes may not be a bad idea altogether.

We can hope is that Spain will now be able to learn from its previous mistakes and manage the potential masses of property buyers more intelligently by implementing rigid controls on property developers – banning the dodgy ones of course-, real estate agencies and other connected professionals.

Antonio Flores Immigration, Property business residence permit, Spanish Immigration, Spanish Residency

68 year-old Anne may have been “saved by the bell”, as she fully qualifies for Court protection under new anti-eviction legislation just passed by the Spanish Government, at least during 2 years.

Her story probably epitomizes the greed of most banks, and their bankers, in pursuit of sky-high profits, commissions and promotions. Predatory, crazy, irresponsible, avaricious are some words that can be applied to what happened to Anne, a story where a bank actually forced a loan on someone who was, at the time, convalescing of a cancer operation.

Anne owned a small apartment outright in Marbella, had some savings inherited from her late mother and after having beaten a life threatening cancer stumbled across a lender, Jyske Bank Gibraltar, who convinced her that she should take up the opportunity to access cheap money and upgrade her living conditions by taking out 2 loans, using the spare cash savings to top up the bank’s money and then, hopefully, get some fresh new income by renting one of the two and…bla bla, as we all now know.

The odds were clearly against her: she could not prove she had an official income in Spain after 20 years living here (had never been registered with the Spanish Social Security system), was not able to work and relied on a €600 pension from the Belgian Government. No worries, Jyske Bank Gibraltar, after “carefully studying the case”, concluded she was a suitable borrower and eligible to take out 2 loans worth €550,000, repayable during then next 35 years. But quite how she intended to repay them remains a mystery even today, presumably even to Jyske’s Christian Bjørløw. What were they both thinking…? Was Jyske also convalescing…?

The law passed yesterday stipulates that even if her home has been repossessed, she qualifies for a 2-year moratorium as she has not yet been evicted. Time to type up a writ to the Courts!

Antonio Flores Equity Release, Litigation equity release, Eviction, foreclosure in spain, Gibraltar Private Banking, Jyske Bank, Jyske Bank Gibraltar, Jyske Bank Spain, Spanish Mortgage Loans

As if the UE-legislative machinery had no more pressing legislation to pass, a recently enacted Regulation (EU) No 650/2012 has been earmarked to come into force soon, as soon as the 17th August…2015.

The piece is not particularly layman-friendly read and it is advisable that you have a good night’s sleep before embarking on the mission of fully understanding what it really encapsulates, bearing in mind too that its entry into force is yet some time away.  Or alternatively try to understand this passage: “…this Regulation should provide for the adaptation of an unknown right in rem to the closest equivalent right in rem under the law of that other Member State.

As tax planning expert Richard Frimston says, Regulation (EU) No 650/2012 includes nine and a half initial pages of 83 separate recitals. Some of the recitals are somewhat Proustian and do not always add to clarity. They might, however, prevent tossing and turning in bed before falling asleep.

Point 9 seems the easiest of the text, indicating that “…the scope of this Regulation should include all civil-law aspects of succession to the estate of a deceased person, namely all forms of transfer of assets, rights and obligations by reason of death, whether by way of a voluntary transfer under a disposition of property upon death or a transfer through intestate succession.”  It also marginally deals with gifts inasmuch as they may ultimately affect the shares of the beneficiaries.

It also conveys clearly that taxes will be left out of it by indicating that “...This Regulation should not apply to revenue matters or to administrative matters of a public-law nature. It should therefore be for national law to determine, for instance, how taxes and other liabilities of a public-law nature are calculated and paid, whether these be taxes payable by the deceased at the time of death or any type of succession-related tax to be paid by the estate or the beneficiaries.

In a nutshell if at all possible, and provided my understanding of this legislative labyrinth is correct, the Regulation stipulates the following:

Applicable laws:

1. In principle, the law of the EU country of the deceased’s habitual residency at the time of death will rule on the succession.
2. If however the deceased was manifestly more closely connected to a country different than the one above, in the light of the circumstances of the case, then those laws would apply.
3. A person can choose to as the law to decide on the inheritance that of his nationality be it either when making the choice or at the time of death. This has to be done in a will.

Applicable jurisdiction:

1. In principle, inheritance matters will come under the jurisdiction of the EU country of the deceased’s habitual residency at the time of death.
2. Where the deceased chose a different Member state law to that of residency, the parties concerned (designated inheritors) may agree that the court of the Member state of the choice of law are to have exclusive residency.
3. At the request of one of the parties to the proceedings, the court may decline jurisdiction if it considers that the courts of the Member state of the chosen law by the deceased are better placed to rule on the succession, taking into the practical circumstances of the succession, such as where the assets are based or the habitual residency of the parties.

As an example, 3 inheritors of a British person resident in Alicante that chose, as applicable laws, those of England and Wales, will ventilate any succession matters through the Courts of Alicante. They can also submit the matter to UK Courts if the 3 agree or in case of discrepancy, any of them can request that UK Courts deal with the case if they are all residents there or the assets are all based in say Manchester.

The regulation makes further provisions in relation to other aspects of the succession but, as far as this post is concerned, I feel I have now beaten insomnia!

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