Life in Spain

The Ultimate Iberian Ham Guide

The Ultimate Iberian Ham Guide · How to select the right Jamón Ibérico

When it comes to the world famous "Jamón Ibérico de Bellota”, suddenly even non-foodies start sniffing its exquisite aroma, cherishing its beautiful marbling and letting it gently melt on their tongue… What an experience and what a pleasure!! So no, not all cold cuts are the same.

The ham is actually that rooted into Spanish culture, that even vegetarians might occasionally give into one slice or another. And difficult it is to avoid in our cuisine, since it adds so much flavour to any dish you might think of: on top of an fried egg and potato, with some fresh artichokes or porra soup. Delicious!

But the best way to discover and enjoy all of its unique und highly appreciated features, is to simply eat it without anything- no bread, no nothing. Paired with a good wine, of course.

So that’s why we want to show you in this "Ultimate Iberian Ham Guide” what is important to know about our ham and what you need to look for to get the real deal.

The first thing to bear in mind is that iberico ham is not serrano ham. Apart from the obvious difference in price, the former is a unique breed from the iberian peninsula while the latter can be non-Iberico pig breed.  The guys from jamonprive have a good article  explaining the main differences. Check  out this great serrano ham they sell if you’re interested in buying one.


Ok, let’s continue…

When selecting a ham, there are two main aspects you need to take into account: the breed and the diet.


The breed our prized ham comes from is the "ibérico” (Iberian) pork. It’s a black pig that is a mix between our wild boar and the pigs the Phoenicians brought to the peninsula thousands of years ago. Nevertheless, concerning the ham, the percentage of this breed can vary: so you can find 100% Iberian hams (both parents were Iberian; pure-bred), but as well 75% or 50% when they were crossed with other pigs like the Duroc.



The diet on the other side can be divided into three groups:

Bellota (100% acorn fed)

Cebo de Campo (some acorns, resources of the pasture, grain and feed)

Cebo (only commercial feed).

The bellota ham is of the highest quality, since the pigs roam in pasture and oak groves ("dehesa”) to feed naturally on acorns, grass, herbs and aromatic plants, until the slaughtering time approaches.

At that point, the diet may be strictly limited to acorns, the pig’s delicacy par excellence and key to its flavour: healthy and natural food for the pig, which adds sweetness to its meat; and the exercise of looking for those acorns, moving around the "dehesa”, creating like this its beautiful marbling.


In case that explanation is too confusing, in 2014 an official labelling system by colour (RD 4/2014, 10th of January) was implemented that helps you to spot right away if the ham is Iberian or not, up to which percentage and the kind of food it received. It’s the following:

Black, 100% Iberian and acorn fed. The very best "Pata Negra”.

Red, at least 50% Iberian, acorn fed.

Green, at least 50% Iberian, "cebo de campo” (resources of the pasture and some acorns).

White, at least 50% Iberian, "cebo” (feed).


Iberian Ham Official Labels©

The elaboration of the ham itself is quite simple: all you need is salt, air and time, controlling well the temperature and humidity throughout the process. The curing of the ham then takes at least 14 months, although some producers cure them for up to 36 months. These jamones are much darker, richer and almost linger on your palate afterwards.

But apart from its incredible taste, we haven’t told you yet the best news: the Iberian ham is actually good for your health! It is rich in proteins, calcium and phosphorus, containing as well Vitamin B1 and B2 and iron. But above all, the acorn fed pigs have a higher proportion of monounsaturated fatty acids which actually help to reduce cholesterol! ¡Salud to that!

And since we cannot top this news, we would just like to give you some last recommendations:

1.The iberico, acorn fed ham-signs of quality and exquisiteness are the intramuscular fat and small white dots. They are just the consequence of a natural curing process, traditional and artisanal. Because that is a fact, iberico hams are much fattier than serrano hams, but this is where the power and flavour comes from. So, if you buy an iberico ham don’t be scared if you see an outer layer of fat under the skin, before getting to the meat.

2.Use the right tools. A long flexible knife for cutting thin slices of ham and a good ham holder to hold the ham securely while you cutting. 



3.There’s a big difference between the back leg of the pig (what we call Jamón ibérico) and the shoulder (known as paleta ibérica). First of all, the back leg or ham is larger and weighs normally between 7 and 8,5 kg while the shoulder weighs 4-5,5 kg. The ham has less intermuscular fat, that’s why many choose a paleta over a jamón. The ham is less boney and has more meat. Also, the curing process is longer due to its larger size and therefore, the price is higher.

Iberico Ham Grass-fed 7 – 7.5 Kg



Iberico Ham Acorn-fed Shoulder. Paleta Ibérica




Iberian acorn fed intramuscular fat

There is just left to say that it is a very special product, behind which stand many families, lots of time, care and hard work – from raising the pigs in liberty, letting them live and eat as natural as possible, to the person who finally cuts the finished product with lots of love and dedication.

So when you enjoy it, take your time as well. Celebrate it. It’s definitely worth it.

If you’re in Malaga, join our Taste of Malaga Tapas Tour that includes at one of the stops (a specialty store) an Iberian ham tasting, where you will learn how to distinguish 3 different types of "Jamón”, including the acorn fed Iberian ham.


Ham Tasting on the Taste of Malaga Tapa

 Courtesy of Malaga Gastronomia y Desarrollo S.L. 

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Posted by on 09/28/2020 08:36:00

Community of Owners new law

Back in March (Spain’s new rental laws in 2019), a new law was approved which brought a raft of changes. In today’s blog post we will focus on the two changes which affect holiday lettings. Community of Owners have been greatly empowered to rule on them going forward. All changes effective as from 6th of March 2019.

  1. Community of owners may now ban holiday lettings outright

Spain’s Horizontal Act has now been amended allowing Community of Owners to vote by a simple majority of 3/5 (or 60%) to ban outright holiday rentals within a community.

I had already pointed out in a blog post in 2017 that this step was necessary, as the Horizontal Property Act at the time required unanimity to ban them, which logically was never going to happen because landlords would vote against it because of their vested interest.

This change has no retroactive effects.

  1. Community of owners may now increase the community fees of all those owners who market their properties as holiday lets through holiday platforms

Spain’s Horizontal Act has been amended allowing Community of Owners to increase the communal quota assigned to a landlord of the overall community budget.

In plain English, communities of owners may now vote to increase the community quota of a property owner who uses his property for holiday lettings. They can vote to increase it by as much as 20%.

This change has no retroactive effects.

By Raymundo Larraín Nesbitt
Larraín Nesbitt Lawyers is a law firm specialised in taxation, inheritance, conveyancing, and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail, by telephone on 952 19 22 88 or by completing our contact form.

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Posted by on 06/15/2019 10:57:00

Save 70% on your Landlord Tax Bill

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

Lawyer Raymundo Larraín explains how to profit from knocking off 70%, or more, from your tax bill on renting out in Spain (applies to both holiday lettings and long-term rentals)

Marbella-based Larrain Nesbitt Lawyers has over 16 year’s taxation & conveyancing experience at your service. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Article copyrighted © 2017 and 2019. Plagiarism will be criminally prosecuted.


By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8th of March 2019


Becoming a landlord in Spain has never been easier and more profitable than today:

  • Rental yields climbed steadily by two digits (14.5%) YOY for a third consecutive year. Source: Idealista.

  • Spain has broken its tourist record for its sixth year in a row! It has consolidated its hospitality status as the world’s second tourist destination, attracting almost 83 million visitors in 2018. Sources: BBCEl País and SPI.



Adding to all this good news, following new regulation, all non-resident EU/EEA property owners, who lease property in Spain, are entitled to deduct from their tax bill all property-related expenses. Iceland, Liechtenstein and Norway tax residents may also benefit from these generous tax deductions. Switzerland is excluded.

That is quite a lot of money you can offset every tax quarter, greatly mitigating your landlord tax bill on renting out. This new tax change translates into average tax savings of 70%, or more, for landlords. If you are not EU-resident, you cannot benefit from it.

This hinges on you receiving from your suppliers a VAT invoice. It must meet the following requirements.

Not submitting quarterly tax returns in Spain on your rental income is no longer an option, following new draconian tax laws that have turned all holiday platforms, and other intermediaries, into tax office whistleblowers retroactively as from the 1st of January 2018. All your rental income is now being reported to the Spanish taxman, unbeknownst to you. Fines for non-compliance are very steep. More on this here: Property portals and rental platforms to pass on landlord details to the Spanish Tax Authorities. Are you prepared? AirBnb, for example, explains its new tax ‘sharing’ data policy with the Spanish Tax Office on its website.

You may claim as tax relief all the following property-related expenses:

  • Interests arising from a loan to buy the property (i.e. mortgage loan).

  • Local taxes and administrative charges and surcharges that impact on the rental income or else on the property itself (i.e. IBI tax, SUMA tax, refuse charge).

  • Expenses arising from formalising rental contracts such as lets or sublets (i.e. Notary and/or Land Registry fees); legal defence (i.e. hiring a lawyer for tenant eviction purposes).

  • Maintenance costs may be offset; refurbishment expenses (improvements) are excluded (however, you may offset them on selling on the property).

  • Community of owners’ fees: these receipts have no VAT, by law.

  • Home insurance premiums: fire, theft, civil liability etc.

  • Property repairs: plumbing, roof retiling, painting, pool pump etc.

  • Utility invoices: electricity, water, gas, internet, and landline.

  • Cleaning: cash payments are not tax-deductible, you need a VAT invoice.

  • Concierge, gardening, alarm & security services (i.e. gated communities).

  • Lawyer’s fees: are 100% tax-deductible! To calculate and submit you quarterly tax returns.

  • Property management fees: to manage your rentals.

  • Advertising expenses: online/offline.

  • Marketing expenses.

  • Home depreciation and amortization. The calculation is 3% on the highest value of the following two: sales price or cadastral value; the value of the land is excluded.You are tax resident in the Union or EEA (your nationality is irrelevant). 
  • The expenses you claim are in direct relation towards the upkeep of the property i.e. claiming travelling expenses would be excluded.

  • You have VAT invoices to back up your tax relief claim.

- Is your tax advisor reducing your tax bills by 70%, no?

- Does he moan it is much too complicated, or make up excuses?

- Do you suspect he’s holding back on you?

Don’t put up with it! If you dislike time-wasters and overpaying taxes, come and speak to us. We will reduce your tax bill by 70%, on average. Call or email us to book an appointment. We will review your personal tax situation and advise accordingly. The procedure is fast and easy. We make life simple.


We offer the most competitive fees in the market.

We are specialized in taxation

Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in taxation, conveyancing, inheritance and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at, by telephone on (+34) 952 19 22 88 or by completing our contact form to book an appointment.

Article also published at Spanish Property InsightSave 70% on your landlord tax bill

Soviet mural in Karaghandy, Kazakhstan.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8th of January 2019


Last December saw a number of changes afoot which could easily trip you up faster than having to explain to someone why Brexit will have no impact in our life’s, ha!

If you have been following our articles and blog posts, you will be aware that Spain has undergone a spectacular two-digit rental yield growth YOY over the last three years. This outstanding advance can be pinned down to a number of factors, but it is not the point of this article to digress and delve in the underlying causes. To simplify, the main two causes have been a landmark pro-landlord amendment to Spain’s Tenancy Act from June 2013 and foremost the irruption of new big players such as property portals i.e. AirBnb. Adopting more relaxed laws coupled with the advent of holiday platforms account for this huge spike in asking rental prices.

As a result of the unbridled growth in rental yields, given how Spain’s rental market traditionally remained sluggish as laws were clearly biased pro-tenant for historical reasons, whole generations of young Spaniards are now being locked out of the market. Despite a severe correction of property prices post-bubble that saw an average price drop of 50% across the board, the truth is that Spanish youngsters still struggle to get a grip on the first rung of the property ladder. A combination of precarious jobs, low wages and high asking rental prices has led to almost 50% of those aged 18 to 35 years old to still live with their parents in Madrid, for example (source: El País).

Spain’s government, ideologically of centre left wing, has taken a series of measures to ensure these problems are challenged in benefit of society. They have increased the minimum wage by almost 30%, the largest increase over the last 40 years, and have now directly tackled the rental problem by enacting a batch of new pro-tenant regulation that greatly empowers long-term tenants (in detriment of landlords). These changes – fortunately – hardly affect holiday lettings.

There is talk that the government’s hard left-wing allies, feel these changes fall short and want to take matters a step further; they have steadily mounted pressure to take a bolder stance and actually go as far as to determine – by decree – rental prices. Whilst this state price allocation has not occurred as of yet, it would indeed be a very misguided step in the wrong direction. Some would even argue this policy has a whiff of communism.

In all my articles I clearly position myself against such state interventionism because, at least to my mind, they clearly introduce market distortions creating serious anomalies and imbalances. We are not in fact living in a planned economy and the government has no business in fixing renting prices by decree.

As an example of this, back in 2017 the Balearics property market was booming, it was Spain’s undisputed hot spot leading the property pack. The local ruling hard left-wing coalition decided to cool down sales prices and asking rental prices in benefit of youngsters seeking affordable accommodation by passing a new stringent regulation that severely restricted holiday lettings. In their minds, they thought these well-intentioned changes would bring down asking rental prices to a more affordable level allowing more young people on low wages to let. Reality bites.

I unequivocally criticized these new measures as counterproductive in my article New Balearics holiday rental law – 8th September 2017. Not 6 months had elapsed since this clumsy law had  been approved, when the Balearics property market crashed, going from a spectacular 15% growth year-to-year to sales plunging by almost 30% as can be read in a local newspaper.

You would think that, at the very least, after grinding the Balearics market to a standstill the ruling coalition managed to cool off asking rental prices, yes? Wrong. They increased by over two digits YOY.

This is because the market is ‘wise’ and will adjust itself accordingly. If you artificially stifle supply (by creating draconian requirements for holiday lets that effectively wipe out 50% of supply) but demand remains unabated, then the logical consequence is a price hike of the good or commodity, which is exactly what’s happened. Moreover, ironically a hard left-wing coalition have made the rich richer and the poor, poorer. They have indirectly greatly benefitted well-off owners of detached villas, who are now unshackled to offer their properties as holiday lets without restrictions, as opposed to more humble landlords who own city centre flats and who have seen their owner’s rights curtailed as they have been outright banned from offering them as holiday lettings.

Regarding the ‘brutal’ increase in the minimum wage from last December – whilst commendable – in practice will likely greatly disincentivise (understatement) businesspersons from hiring new employees as in addition to the minimum wage, employers must also pay for Social Security which is over 1/3 of the wage on top. Furthermore, it may even lead to massive layoffs. January 2019 in fact saw the largest figure of employees being let go by companies, with over 274,000. This is the worst figure in over a decade, not even during the recent Great Recession were the figures this bad. To put these numbers into perspective, that is 100,000 more workers losing their jobs than in the same period in the previous year (176,000 in January 2018). Clearly, there is a correlation between the government’s (clumsy) vast increase of the minimum wage last December (the largest in four decades) and thousands of people losing their jobs on the following month (source: Idealista).

Whilst it is always commendable in life to aspire to lofty ideals, these have real consequences when put into practice; this is particularly true of those politicians who have a penchant for them and who have never in their life worked in the private sector having lived off public stipends for all their life.

Politicians wield huge power and should carefully ponder the consequences of their ill-thought actions in the real economy and above all, and most fundamentally, on how these changes impact on ordinary families’ life’s.

Changes to Spanish rental laws

The Government approved by Royal Decree last December a spate of game-changers for the rental market. Legal persons acting as landlords should be acutely aware of such changes if they rent or plan to rent out in Spain long term. Physical landlords should take note of the first bullet point.

The idea is to keep it simple and briefly list the most significant changes without going into esoterics. All changes effective from the 19th of December 2018. Prior signed rental agreements follow previous regulation, unless agreed otherwise.

I will be taking as reference my 2016 article  Urban Rental Law in Spain – Spain’s Tenancy Act (Ley de Arrendamientos Urbanos, LAU). I will take for granted legal concepts and will make no effort to explain them; if you are at a loss for example on mandatory and tacit renewal periods, you should read the above article to understand where I’m coming from.

It is strongly advised to read in tandem the above-mentioned article with the brief bullet points collated below to get the big picture on what’s changed in 2019.

  • Physical landlords: 5 years mandatory renewal period on long-term rentals (plus 3 years tacit renewal periods). Was three years plus one.

  • Legal landlords: 7 years mandatory rental period on long-term rentals (plus 3 years tacit renewal periods). Was three years plus one.

  • Legal landlords: additional bank guarantees demanded by a landlord on long-term rentals may not exceed a two-month deposit. Landlords typically request additional guarantees besides the compulsory one-month tenant deposit, especially when a tenant is a non-resident (because of the increased financial risk). These guarantees are now capped for legal persons acting as landlords. For physical landlords there is no change and may keep requesting additional guarantees in excess of the 2-month deposit.

  • Legal landlords: landlords – by law – will pay the commission to estate agencies on tenancy agreements: it was the case that tenants paid half or all this commission whether directly or not.

  • Holiday lettings: Spain’s Horizontal Act is amended allowing Community of Owners to vote by a simple majority of 3/5 to ban outright holiday rentals within a community. I had already pointed out in a blog post in 2017 that this step was necessary, as the Horizontal Property Act at the time required unanimity to ban them, which logically was never going to happen because landlords would vote against it because of their vested interest. This measure has no retroactive effects.

  • Holiday lettings: Spain’s Horizontal Act is amended allowing Community of Owners to increase the communal quota assigned to a landlord (capped at 20%) of the overall community budget. In plain English, communities of owners may now vote to increase the community quota of a property owner who uses his property/ies as holiday lettings. This agreement will have no retroactive effects. 


In my view these changes are a faux pas and will understandably make landlords (specifically those acting as legal persons) wary of renting out long-term thereby greatly restricting supply (as legal persons have thousands of units in their possession). Who in their right mind wants to lock themselves into an eight-year contract, or a ten-year for legal persons, losing possession of the property for that long? There has to be an attractive incentive to counter the increased risk these changes bring.

Whilst these changes no doubt can be electorally capitalized, garnering legions of votes on polling day from disenfranchised young men and women who are in need of affordable accommodation, it is uncertain they will actually benefit tenants.

It should be noted that landlords had already been dumping long-term contracts over the previous three years in benefit of the far more lucrative short-term holiday lettings restricting furthermore the long-term supply of properties.

These new changes in law will further compound and exacerbate an already scant supply of long-term accommodation leading to a foreseeable hike of rental prices across the board as more and more landlords will pull out from long-term rentals because of the increased perceived risks for them; exactly the opposite effect of what is sought by lawmakers on passing this new regulation nationwide which is vying to make accommodation more affordable for everyone, especially the more vulnerable collectives on precarious McJobs with low wages, namely youngsters.

Alas don’t fret, ‘fortunately’ for us the government has this base covered as there is talks of planning to intervene rental prices (shortly), goaded by their left-wing political allies, setting them out by decree like in a planned economy! Let us hope common sense prevails and this clumsy policy is not adopted by the incumbent.

I just cannot begin to express how wrong and harmful this decision would be and how counterproductive it could prove for the overall rental market. We’ve already seen last year how a well-meaning (albeit naïve) political decision by a hard-left-wing coalition in the Balearics led the property market to plunge into chaos resulting in fact in the opposite effect of what was sought; a two-digit hike in rental prices YOY (and mounting) making life of all those seeking affordable rental accommodation in the Balearics even more miserable.

Only time can tell whether these well-meant pro-tenant changes introduced by Spain’s government will in fact benefit (long-term) tenants, or not.

My money is it won’t.

You can hire our contract drafting service from only €165 plus VATRentals (contract drafting). Rental contracts also available in English. All contracts completed within the next 24 working hours.

Be proactive, talk to a lawyer. We can make it happen.

"Everyone thinks of changing the world, but no one thinks of changing himself.”

Count Lev Nikolayevich Tolstoy (1828 – 1910). Was an unparalleled writer of universal acclaim author of pivotal novels such as War and Peace and Anna Karenina. His works attained the pinnacles of realist fiction. The strife’s of the Crimean War imbued in him a strong religious sense that would lead him to reinterpret the teachings of Jesus coalescing in his ideas of non-violent resistance. These ideas are epitomised in his work The Kingdom of God is Within You which would go on to greatly influence two of the most towering figures of the 20th century, Mohandas Karamchand Gandhi, and Martin Luther King, Jr.

Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in taxation, inheritance, conveyancing, and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail, by telephone on 952 19 22 88 or by completing our contact form

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Posted by on 05/12/2019 21:19:00

Investor Perspective

The past sixteen months have been exceptional for property sales within Spain, especially in Javea & Moraira. This demand has stimulated price increases of 6.3% during the first quarter for 2016 year on year, according to Eurostat, the European Union’s Statistics Institute. This is the largest increase since the third quarter of 2007 when we had the Spanish property boom!

After six years of price reductions we have now had eight consecutive quarters of price increases. Towards the end of 2015, data shows property price increases of over 8.5%. 2016 has continued with price increases. On the face of it, it would seem that prices have certainly recovered well from the price reductions throughout the crisis years.

We must be mindful that it was the low prices that attracted the buyers, especially UK buyers when sterling was stronger. This encouraged confidence and stimulated further growth and consequently prices have been increasing but for how long this will continue no one knows. Demand for property looks like it will continue as investors scramble to find safer investments. This means there is still some upside to price increases before it levels out.

Since Brexit happened business has been surprisingly good with UK buyers, however, the reality of the uncertainties we face leaving the EU are just about kicking in as investor confidence in the UK remains low, hence the value of the pound has recently plummeted. Whilst there are many eurozone countries still buying property in Spain, the UK has historically made up a massive 15% of total foreign property purchases and at least 20% of the local Moraira/Javea market, which has attracted many British investors for the past 30 years. I expect some UK buyers will be deterred by all the uncertainties surrounding them but there will always be many Brits buying in Spain regardless. This was proven during the 2008 crisis.

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Posted by on 10/15/2016 09:18:00

Rental Law Spain

The new Spanish rental law is now obligatory and worth knowing! This is a scanned document from Abogados Romeu & Partners of Moraira. We will be advising all past and future clients of the new rental law. For further information please contact a legal adviser.

See Here:New Spanish Rental Law Valencia Region

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Posted by on 03/10/2016 16:47:00

New UK Pensions Guide 2015

 New UK Pensions Guide 2015 PDF

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Posted by on 05/29/2015 14:49:00

Spanish Property News

Costa Blanca and Costa del Sol leading market recovery
Data for 2014 showed that it was the year that the Spanish property sector stabilised after the turbulent years of crisis which it had endured since 2008. When looking at this data it becomes evident that two of the provinces benefiting most from the upturn are Malaga (Costa del Sol) and Alicante (Costa Blanca).

In 2014 only the provinces where Spain’s two major cities are located (Madrid and Barcelona) saw more property sales than Alicante and Malaga. The provinces fared even better when looking just at new-build sales with Alicante in second place with 9,985 sales and Malaga in third with 8,661.

The two coastal provinces are benefiting from the incredible rise in the number of foreign buyers which has been witnessed over the last few years. Foreign buyers now make up 13.88% of the market (Q4 2014) and many of them look no further than the Costa Blanca and Costa del Sol which are undoubtedly Spain’s two most recognized coasts internationally.

As the new-build sales figures suggest, the two coasts are among the only areas of Spain where developers are building new projects. The Costa Blanca South has seemingly already shaken off the shackles of the crisis and has become an epicentre of new construction with developers now starting to increase prices in areas such as Orihuela Costa.

The Costa del Sol was also one of the first areas of Spain to start seeing signs of positivity in its property sector. The coast, which is driven by the allure of destinations such as Marbella and Fuengirola, is now reported to have a lack of new-build property with demand outstripping supply in certain areas.

The future looks even brighter due to the diversification of the foreign market which has occurred since the crash. The British market remains strong with an 18.62% market share in Q4 2014 but does not dominate as it once did with the remaining 80%+ of the market being spread across numerous nationalities.

Foreign markets with huge growth potential have also started to show interest in Spanish property with Russian buyers becoming a prominent force over the last few years and the Chinese also increasing their share of the foreign market to over 4% in the last quarter of 2014 which bodes well for the future.

Also the more traditional markets are picking up with the British increasing their market share from 18.06% to 18.62% from Q3 to Q4 2014, and the Germans from 6.45% to 7.25% in the same period. All this paints a positive picture of the Spanish property sector: a picture that should continue to improve over the coming years.

INE releases positive sales data for 2014
The Spanish National Statistics Institute (INE) has released its data for sales made in December 2014 and its round up of data for the year of 2014. Results are extremely positive with sales up by 15.7% year-on-year for December and a 2.2% increase being recorded for 2014 as a whole.

The annual increase ends years of extreme decreases in the number of sales of Spanish property with sales dropping by 18.1% in 2011, 11.5% in 2012 and 1.9% in 2013. A total of 319,389 homes were sold in Spain during 2014 which is down 59% from the peak in 2007 when 775,300 homes were sold.

Data shows a clear split between the first and second halves of the year with sales rebounding strongly in the last six months of 2014 and double digit year-on-year percentage increases in sales have been recorded from September onwards (September +13.7%, October +16%, November +14% and December +15.7%).

Re-sales were the driving force behind the increase in sales and made up 63% of total sales with 199,943 transactions up 18.4% on 2013. New-build performed badly during 2014 and accounted for the remaining 37% of sales with 119,446 transactions, a figure that was down by 16.9% on the previous year.

The Spanish regions which recorded the strongest sales increases in 2014 according to INE data were the Balearic Islands with an 18.5% increase, Navarra: +13.9% and the Canary Islands: +12%. The largest declines in sales were registered in La Rioja: -25.1%, Castilla-la-Mancha: -12.6% and Murcia: -6.3%.

The annual change for other important regions was as follows – Madrid: +6.9%, Catalonia: +3.8%, the Valencia region: +2.5% and Andalucia: +0.3%. The highest number of transactions per 100,000 inhabitants was in the Valencia region with 1,182, it was followed by the Balearic Islands: 1,043 and the Canary Islands: 1,015.

Banks increased transaction volume and value in 2014
Although Spanish banks continue to hold large portfolios of property on their books, the rate at which they are being removed is increasing. In 2014 listed Spanish banks sold and leased a total of 86,726 properties which marks an 18.7% increase on 2013. The total value of these property transactions was €13,619 million, up 6.4% on 2013.

Caixa Bank recorded the most impressive numbers with 23,400 property sales and leases, 35,870 if including those made through developers supported by the bank. The value of these transactions was €2,512 million although this rose to €5,432 if including sales and leases made by third parties.

The bank seems to have benefited from its focus on leasing a large number of its properties. Rentals accounted for €1,132 million, 45% of the €2,512 million in direct turnover made by the bank from property. The results provide further evidence of the strengthening of the Spanish rental market and the possibilities available in the buy-to-let sector.

Other major banks with significant transaction volumes in 2014 were BBVA which shifted 23,069 properties for a total value of €1,932 million and Banco Sabadell (Solvia) with 16,172 properties for €2,774 million. The banks will hope that 2015 will see similar success and allow them to move on even larger amounts of their stock.
Permission to re-publish granted by Fuster & Associates.

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Posted by on 02/19/2015 09:01:00

Property News

Profitability of Buy to Let increasing in Spain
Purchasing a property as a buy-to-let investment is growing in popularity in Spain and data released by the property portal Idealista reveals that it is also becoming more profitable. The study, based on Q4 2014 sales and rentals price data, shows that residential property now offers on average a 5.3% annual yield up from 4.7% in Q4 2013.

In 2014 we published an article on the conditions in the Spanish property sector which seemed to make it a prime target for buy-to-let investors. This new data backs up this theory and makes purchasing a property in Spain as a buy-to-let a viable option and one which foreigners may choose in order to take advantage of current low prices.

This investment vehicle could be of particular interest to younger first-time-buyers from countries such as the United Kingdom, Belgium and Sweden where in many cases they are priced out of the market. A Spanish buy-to-let property could be an ideal way to get onto the property ladder and begin to build capital.

Some UK pensioners could also be looking at this as an interesting opportunity. The UK government will enact pension reforms this April which will allow pensioners more freedom to use their pensions as they wish including cashing them in as a lump sum. This should lead to more pensioners searching for investments with stronger returns than annuities or bonds.

Looking at the Idealista data in more detail one can see that the provincial capitals of the major tourist provinces generally offer stronger than average returns for investors. Alicante offers a 5.4% yield, Malaga: 5.3%, Palma de Mallorca: 5.6% and Las Palmas de Gran Canaria an impressive 5.9%.

These figures are better than those for Spain’s two major cities with yields in Madrid at 5.1% and in Barcelona at 4.7%. Office property offers even higher yields for investors at an average of 6.7% with yields for retail property at 6.9%. Garage space is currently the worst performer with average yields of just 3.6%.

Chinese investors looking for exclusivity, quality and professional management. Since the Golden Visa was launched in Spain demand from China has risen although perhaps not at the rate people were expecting. However, the vast potential of the Chinese market and the steady growth in the number of Chinese buyers over the last couple of years makes it a market that is worth pursuing for Spanish property professionals.

There are two main types of Chinese buyer, those that are looking to relocate permanently to Spain and are therefore interested in purchasing apartments close to the centre of large cities and those who are looking at the property solely as an investment, whether this be to obtain the Golden Visa or not.

The second group of Chinese buyers will not only have a larger budget but also a broader scope in terms of the location of the property and will look at it in terms of its rental potential and potential capital growth. This type of Chinese buyer will look for property situated either in prime areas of major cities or areas of the coast/mountains in which demand is highest.

Mr Fan, a Chinese employee at the agency Grupo Inmobiliario Alting, believes that Chinese clients are more demanding than other nationalities and value quality of service above price and even product. He says in an interview with news portal Inmodiario that the Chinese want the process to be transparent and for the agency to be able to offer a full service.

Therefore they prefer agencies that have Chinese staff and can provide legal services in Chinese, either directly or through a partner, and also want the agency to be able to provide interior design, the option to purchase additional products/features for the property as well as post-purchase services such as property management.

The type of property preferred by Chinese investors are apartments of 2 or 3 bedrooms, either new-build or unique re-sales, with strong rental potential and priced at ?500,000 or above. Some also have more specific requirements such as only considering properties which are south facing due to Feng Shui.

Registry statistics for Q2 2014 showed a 45% year-on-year increase in the number of Spanish property purchases made by the Chinese. Their percentage share of sales to foreigners is also on the increase with Chinese buyers representing 3.95% of all sales to foreigners in Q3 2014, up from 3.31% in Q3 2013.

This suggests that, although the Chinese may be more demanding in terms of what they expect from property sector professionals, it is worth catering to their needs.

Moody’s and Eurostat see positives in Spanish property sector
The credit ratings agency Moody’s and the European Union statistics institute Eurostat see Spanish property prices as having bottomed out. According to Eurostat the price of property in Spain increased by 0.2% in the third quarter of 2014 while Moody’s believes that price data is improving in line with the strengthening of the Spanish economy.

Fernando Encinar, Head of Research at Idealista, a major Spanish property portal, believes that prices have now completely stabilised in prime areas where there is interest from investors. However, he sees prices as still having further downside in many spanish provinces although price falls will be minor.

Moody’s sees mortgage default rates as having already hit maximums in Spain as the country’s economic environment improves. Spain’s economy is now growing, unemployment is on the decline and consumer confidence is rising: all factors which will cause the number of evictions due to non-payment of mortgages to decrease.

Meanwhile the Eurostat price data for Q3 2014 showed Ireland leading the increases with a 6.2% rise followed by Latvia (4.9%) and Croatia (4.7%). Spain’s increase is a relatively small 0.2% but the fact that Eurostat is also recording rising Spanish property prices shows that there is now a wide consensus on price stabilisation in the country.

Mortgage concessions still on the rise
Data for November from the Spanish National Statistics Institute show mortgage concessions as having risen by 14.2% year-on-year. This strong increase marks the sixth consecutive month of double digit rises after concessions rose in June (19%), July (28.8%), August (24%), September (29%) and October (18%).

Mortgage statistics are important in determining the health of a country’s property sector and the impressive rebound in the second half of 2014 is evidence of the Spanish sector’s return to health. Data for the first 11 months of 2014 reveals a year-on-year fall of 0.2% on the same period of 2013 showing an annual stabilisation in concessions.

November saw a total of 15,900 mortgages granted worth a total of ?1.666million, a figure which is up 12.2% on November 2013. The average value of mortgages conceded during the month did fall however, and was down by 1.7% year-on-year to ?104,817. Concessions were down on October by 10.1% with total capital lent down by 5.6% on the previous month.

The Spanish regions which registered the highest number of mortgage concessions for November were Andalucia with 3,183, Madrid (2,565), Catalonia (2,264) and the Valencia region (1,743). Only three regions recorded year-on-year decreases in concessions and these were Cantabria (-24.2%), Galicia (-17.1%) and the Balearics (-12.7%).
Permission to re-publish granted by Fuster & Associates.

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Posted by on 02/05/2015 09:08:00

Spanish Property Report December 2014

BBVA report predicts positive 2015
The Spanish bank BBVA has released a report on the Spanish property sector in which it forecasts that there will be a moderate recovery in 2015. The bank believes that demand for Spanish property is now at the point of inflection and prices are rapidly stabilising in what is a real turning point for the Spanish market.

The report called Spain’s Real Estate Flash (Flash inmobiliario de España) was released by BBVA Research and BBVA Real Estate. The bank will begin releasing monthly updates on the Spanish property sector which will analyse the most important market variables: prices, sales, construction and mortgage concessions.

The report states that data up to November 2014 reveals a rise in demand which is due to an increase in employment and also an improvement in the levels of consumer confidence in Spain. Economic improvements are also leading to the recent rises in lending which is providing a further boost for the market.

Positive developments can also be seen in the number of construction licence concessions so far this year, up 5.7% to September (Ministry of Public Works stats). INE statistics show that investment in Spanish real estate is also up and grew by 1.3% during the third quarter of 2014.

For BBVA the construction sector has already bottomed out and there will now be a rise in residential development. Prices have entered a period of stabilisation and everything points towards there being a positive 2015 during which the sector builds on the promising changes which have occurred in 2014.

5 key elements to consider when buying your Spanish property
The purchase of a property is one of the most important moments in anyone’s life and it is essential for any buyer to enter the process with a clear idea of what they want and with an awareness of any possible pitfalls. This is especially true when buying a property abroad as you may not be fully accustomed to the country’s culture and language.

While there are possibly hundreds of things one must consider when buying in Spain here we have listed 5 of the most important aspects to keep in mind:

Budget: Before anything else it is important to set a budget for your purchase. Having a clearly defined budget will streamline your property search and mean that estate agencies can quickly and effectively identify suitable properties saving you time and money. When calculating your budget it is important to bear in mind that you will need to factor in an extra 10-15% to cover taxes and fees depending on where you are buying and what type of property (new-build or resale). These costs will be higher if you are getting a mortgage on the property.

Legal advice: It is vital to seek independent professional legal advice for a purchase in Spain to avoid making costly mistakes and to give you peace of mind. Your lawyer will undertake all the necessary due diligence on the purchase and, if granted power of attorney, will be able to act on your behalf and save you having to make numerous trips to Spain to open a bank account, obtain an NIE number and other necessary procedures.

Mortgage: As mentioned in point 1, a mortgage will mean you will incur additional costs on your purchase as extra fees will have to be paid to the Notary and bank charges will also apply. Currently it is possible to get up to 80% finance when purchasing from a bank and if buying a resale property you will normally be able to get between 50-60% of the property’s value covered by a mortgage. Also, be sure to shop around as some banks will offer much better deals than others.

Objective: What do you want from the property, will it be a permanent residence, a holiday home or purely an investment or a mix of these? It’s useful to know exactly what you aim to achieve from your purchase as it will affect the location and type of property you should be considering. It is also important to do research on regional laws to ensure your objective is achievable. For example an investment in a Barcelona property to let as a tourist rental would have to be made with extreme care as there is currently a freeze on the concession of tourist rental licences and a growing hostility towards the private holiday rental market in the city.

Dream property: Draw up a list of requirements for the property itself and factor in the budget and objective which you have decided upon. You will want to consider among other things whether you want a new-build or resale property, whether you want to buy on a development or not and what characteristics you want the property to possess. It is important of course to be realistic so first search for what is available on the market for around your budget to get an idea of what you will be able to expect to afford. Keep in mind that it is still a buyers market in Spain and that there is a lot of choice in many areas so you will be able to be more demanding with your specification.

Solvia studies the financing of 150 new developments
The health of Spain’s residential property sector is undeniably improving as we see increases in sales, price decreases slowing and a rise in mortgage concessions. Many believe that this final factor is the key: the banks are starting to lend again, and this appears to now not only be limited to lending to individuals but also to developers.

It has been revealed that Banco Sabadell, the owner of Solvia which acts as its real estate division, is studying the possibility of financing around 150 new developments in Spain. Banco Sabadell’s Director of Real Estate Investment, Joan Bertrán, stated that “in the last six months we have seen the recovery of the Spanish property development sector”.

Bertrán was speaking at a conference organised by the alumni organization of ESADE and admitted to those present that banco Sabadell is already financing development. He also mentioned the professionalism of the sector saying that the developers currently operating are good professionals and know they cannot “simply present any old project”.

The Director did say however, that the bank has very strict controls and both the developer and development must meet specific criteria in order to receive financing. He said that the bank approaches the applications as if they themselves were going to develop the projects in order to ensure they are completely viable.

Banco Sabadell has approximately ?12 billion worth of real estate assets under its control and develops around 900 properties annually. The bank’s real estate division Solvia has been one of the most successful in Spain and has won numerous awards for its marketing campaigns leading to it taking on assets from other banks to push through the sales channel.

Bertrán says that the main problem which Solvia currently has is with its land assets which are proving very difficult to sell as “there are currently no buyers for them”. He believes that for the sale of land to pick up the property sector as a whole will have to recover further as investments in land are more complex and risky than other types of property.
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INE: Second consecutive quarter of price increases
Spanish property prices have risen for the second consecutive quarter according to the statistics released by the National Institute of Statistics (INE) for the third quarter of 2014. Their data showed that there was an extremely marginal year-on-year rise of 0.3% in the price of Spanish real estate from July to September.

The increase is less than that which was recorded for the second quarter (0.8%) but shows that the freefall in prices has come to an end. Before the rise registered for the second quarter of 2014, INE stats had shown prices falling continuously from the second quarter of 2008 onwards.

In year-on-year terms, prices of new-build properties rose by 0.8%, a figure much higher than the price rise for resale property which stood at 0.1% for the quarter. Prices were up nationally on the previous quarter by 0.2% overall with new-build rising by 1.2% and a 0.0% change for resales.

Even with the nation al price increase the majority of Spain’s regions still registered decreases for Q3. The largest fall in prices was recorded in Navarra with a 6.9% drop, it was followed by Extremadura (-4.6%), La Rioja (-3.5%) and Castilla la Mancha (-3.2%). Prices also dropped in Castilla y León, Galicia, Aragón, the Basque Country, Asturias and the Canary Islands.

Increases were led by the region of Madrid where prices were up 2.8%, it was followed by Cantabria (2%), Murcia (1.5%), Ceuta and Melilla (1.4%), Catalonia (1.1%), the Valencia region (0.9%) and the Balearic Islands (0.5%). In Andalusia prices remained stable over the three months with data showing 0.0% change.

The statistics show that price data is starting to look more healthy in Spain’s major cities and principal tourist regions such as the Valencia region, Andalusia and the Balearics. It appears that prices have entered a phase of stabilisation which has been predicted by many market analysts and should prece de a return to sustained price increases.

Construction licence concessions up 5.7% for 2014
The number of construction licences conceded in Spain during the first 9 months of 2014 is up 5.7% on the same period of 2013. A total of 27,598 visas have been granted so far this year according to data released by the Ministry of Public Works and the stats for September were impressive with concessions up 31.6% year-on-year to 2,883.

If the current rate of concessions holds up for the rest of the year, i.e. if the year closes with a 5.7% increase on 2013, then the annual total would be 36,240. The total for 2013 was 34,288 licences while the level registered in 2012 of 44,162, 21% higher than the hypothetical total for the current year.

Almost 2 thirds of the licences from January to September this year (18,719) were granted for properties to be constructed in apartment blocks, this figure is up 7.2% on the first three quarters of 2013. The remaining 8,864 visas corresponded to detached properties and this also showed improvement year-on-year, up by 2.8%.

The Spanish government’s drive to get home owners and developers to invest in renovation and refurbishment of property seems to be having little effect. The number of visas granted to restore or refurbish properties stands at 16,841 so far in 2014, down 1.2% on 2013 while the number of concessions for extensions has fallen 20.6% to 1,165.

Permission granted to republish. Data supplied by Fuster & Associates

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Posted by on 12/10/2014 09:04:00

Moraira Property Update Aug 2014

Over the past twelve months we have had various reports that housing prices in Spain have almost bottomed out and even more so along the Costa’s and that in 2015 prices will start to rise by 2% for that year, as an average. Obviously these statements deal with the overall data which
are also broken down into the most successful regions and leading the way is the Valencia region with 13,436 properties sold to foreigners during the last quarter of 2013. That equates to a third of all property sales in Spain!

On a year to year comparison there were 16,619 properties sold to foreigners during 2013 compared to 13,793 properties sold in 2012. This
equates to a 17% increase. In addition the total sales figures increased for the same period by 11% to 1.7 billion euros. That’s 102,292 average sales price per property.

In 2013 Alicante province achieved the majority of sales with 13,736 properties sold to foreigners. That’s a whopping 83% of the total regional market. The rest were divided by 11.7% for Valencia and 5.3% for
Castellon. Nationally resale properties were more popular than new build
properties. The British lead the market acquiring 13% of all sales. It was 40% back in 2008!

Russian sales have been increasing each month and Scandinavian, Algerian and Belgian buyers have also taken a substantial slice of property purchases. All this sounds like good news and yes sales have been good and everyone likes to talk it up, however, this kind of news also gives false hope and raises expectations of where the market is actually going.

Sure there is more confidence but there is a problem that seems to be
unreported and that is the bulk of purchases made have been at the bottom end of the market, mostly under 350,000 euros. So much so, the spike in sales, especially in Moraira & Javea, has absorbed pretty much all of the property stock that had been hanging around for years which stood a chance of a sale. This increase in sales is because those vendors have had to negotiate way beyond their comfort level, in most cases, in response to the bulk of budgets buyers have had. This then leaves a growing problem which all agents are experiencing to one degree or another right now. And that is where do they find the property stock to fill the hole created by the recent spike in sales. How do we manage the expectations of the seller with all this so called good news and false hope?

Due to this false hope, some vendors are seemingly increasing their prices or standing firm on negotiations on properties that by large were overpriced for the market to begin with, hence still not sold. The phrase “shoot yourself
in the foot” comes to mind and this could potentially throw the market backwards if this becomes common practice.

Unless we see a massive increase in budgets soon, the reality is that the problem still remains the same. And that is the bulk of buyers do not have a budget over 350,000 and many of these have under 200,000 hence the recovery at the bottom end which the statistics prove. Added to this the 13% cost to purchase and then cost to modernise the mostly dated condition of properties at these price levels, it becomes too expensive for most.

Budgets may or may not improve over the coming years but when they do it may only be marginally as it’s an ageing market and most do not want debt or big villas to maintain. Rather they downsize at home and keep some capital back for an easy maintained property/life in Spain. Consequently the vastly overpriced middle bit, typically anything over 500,000, will remain a difficult price band, unless it’s amazing, whilst the top end with at least some wow factor always seems to tick along. So unless the bulk of the middle market has a significant price drop or budgets increase accordingly, it’s going to continue to be very difficult to manage the expectations of foreign buyers. For all the positive news we read about, if there is little stock that can satisfy the bulk of demand or budgets can’t be increased to a level that’s acceptable, it could be stalemate for an unknown period of time.

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Posted by on 08/22/2014 10:39:00
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