Figures from the Bank of Spain reveal that foreign investment in Spanish property increased by 19.2% in the first 5 months of the year compared to the same period in 2006. The amount invested by Spaniards in property outside of Spain almost doubled over the same period.

The total amount invested by foreigners to the end of May was 2.252 billion Euros, almost the same as the amount invested in 2005, though still significantly below the 2.925 billion Euros invested in the peak year of 2003.

How does one reconcile this increase in foreign investment in Spanish property at a time when the market is clearly turning down?

One explanation might be that many of the off-plan sales made in 2004 and 2005 are only now being recorded as investments as buyers take possession of their properties and complete the purchase before notary. This is the moment when the investment is recorded in the national accounts.

Nevertheless, the figures do seem to suggest that foreign demand for Spanish property has picked up significantly since last year, even though property professionals report that the market is still very slow.

Recent property re-sale figures show a drop in resale housing prices in the Catalan Capital city Barcelona, for the first time since 2001. Research into the second quarter of 2007, conducted by Spanish property information portal Idealista, revealed that the price of property in Barcelona city and it’s surrounding municipalities have dropped by an average of 1.3%.

The results placed the average price per square meter of property in Barcelona at 4,285 euros (£2901) compared to 4,888 euros (£3309) as shown in the same report for the first quarter of this year.

While prices fell in all areas covered by the survey, the Les Corts district showed the most dramatic drop of 3.2%. Four other districts in the city showed a drop in excess of one percent, those being Ciutat Vella, Eixample, Sant Martí and Horta Guinardó. The most exclusive area of the city, Sarrià- Sant Gervasi, reported the lowest fall at a figure of 0.2%.

After ten years of rapid but steady growth, property prices in Barcelona are now lower than they were at the beginning of the year.

An estimated 1 million Brits now live in Spain – and there are signs that the expatriates are integrating at last into the Spanish way of life according to a report from the timesonline. Graham Forster came to Spain partly in search of the sun. The pretty Andalusian village where he has settled is a 40-minute drive from the coast – or would have been had I been able to find the winding road to it on my map. The 49-year-old Liverpudlian watchmaker found a perfect place to settle in Álora, a whitewashed village in the shadow of an ancient hilltop castle. “I wanted the Spanish lifestyle, rather than Little England in the sun,” he explains, taking a rest from fixing clocks in the afternoon heat.

Five years ago, he moved here with his family. After four years of lessons and considerable help from his neighbours, Forster felt that his Spanish was good enough to open his own shop, which serves Brits and Spaniards in equal measure. “This is it now,” he says decisively. “We’re staying here for good.”

Álora is one of dozens of remote Spanish villages where Britons have settled in recent years. Far removed from the British enclaves on the coast, many of these latest settlers are becoming involved with their adopted villages to an extent their predecessors never dreamt of.

“I think the traditional image of the retired Brit coming to live in the sun is diminishing,” says Bruce McIntyre, the British consul in Málaga. “The normal person who used to come here and live on their state pension can’t now afford to do so.”

Instead, he sees younger people moving over with their families, often entrepreneurial types with successful businesses in the UK.

The UK Foreign Office works under the assumption that more than 1 million Britons are living most or all of the year in Spain – a huge number in a country of 45 million people. In dozens of towns and villages across the sunny south and west of the country, Britons now outnumber Spanish residents by a wide margin.

The latest official figures reveal that 315,000 Britons are registered with their local Spanish authority, giving them the right to vote in local elections. That figure is rising by 15 to 20 per cent a year. For the first time, Spanish politicians are starting to court the British vote in local elections. In places such as Majorca and Alicante province, Britons are themselves being elected as local officials; one town has even had a British deputy mayor.

Britons still prefer to buy beachside homes, despite the fact that properties located on the Spanish coasts are generally much more expensive than inland homes. The most popular regions lie along the South and East Coast of the main land in Andalucia, Valencia, Murcia and Catalonia, as well as the Canary Islands and the Balearic Islands according to homesworldwide.co.uk.

Due to the appeal of Mediterranean and Atlantic ocean views, it’s unsurprising that more than 40 per cent of the population of Spain lives on the coast, in addition to more than six million holiday homes, many of which are owned by British investors and are only occupied for part of the year.

This phenomenon is nicknamed Muro Med – or ‘Mediterranean wall’, and is the focus of a report titled The Mediterranean and the Horizon 2020, which reveals that heavily built-up areas account for more than 50 per cent of the Spanish Mediterranean coastline.

Scientists are concerned that this excess of development could affect the country’s coastal flora and fauna, eventually leading to dangerous levels of erosion, and in an effort to protect the wildlife of the pine forests, sand dunes, and wetlands, regional governments are taking steps to preserve some of the country’s natural highlights.

Murcia, one of Spain’s property hotspots, has banned all building within 500 metres of the beach, and other regions are set to follow sit in a bid to protect the country’s coastline and ensure that it remains a draw for overseas property investors, as well as tourists.

Spanish property prices remained robust in June, despite recent predictions that the market would suffer, according to figures released by Spanish Property portal Kyero.

Figures show that the Spanish average property price remained static at €250,000 (£167,500) for June.

Two months on from the stock market slump average property prices in the ever popular Malaga province have not fallen as expected but in fact have risen by over 1.5% from €310,000 to €315,000 .

Similarly average property prices in Alicante province have remained stable at €250,000.

The Canary Islands (Tenerife, Fuerteventura and Gran Canaria – average property price of €230,333) remain significantly cheaper than the Balearic Islands (Mallorca and Menorca – average property price €402,000).

Average property prices in Seville have increased by €20,000 in the last month, from €160,000 in May 07 to €180,000 in June 07 yet remain 28% below the national average.

Anecdotal evidence from people living on the Costa del Sol suggests that the market there is extremely varied, with some home owners having to drop their prices to make sales and others selling extremely quickly.

Britons working in Spain who are self-employed are set to receive new benefits after a new law was passed. The Statute of Self-employed Work will aim to offer improved working conditions for expatriates, reported Homes Worldwide.

Until now, Britons have been forced to put up with a certain amount of unfair terms, such as no maternity leave, no minimum safety conditions and no sick pay entitlements.

It is hoped that the new government ruling will address these inequalities, something that could help 3 million people in the country.

Now, all workers - whether salaried or self-employed - will be given access to the same rights. Under the law, self-employed men will be entitled to 15 days’ paternity leave while self-employed women will have their maternity rights extended to match those of salaried mothers.

Self-employed workers will receive full unemployment benefit in the event of them losing work as a result of circumstances beyond their control, and will be entitled to sick pay resulting from both illness and accidents.

Self-employed workers in especially dangerous sectors will be entitled to early retirement and minimum health and safety conditions in the workplace will apply.

The bill received equal support from both major political parties in the country.

Millions of pounds of winter fuel payments are being paid out to British pensioners living in warmer climes like Tenerife and the Mediterranean. Now the British government is being asked to review the benefit. Last year 30,000 payments were made to overseas residents, which cost the British taxpayer £8 million.

The tax-free payment is payable in November to most Britons over the age of 60. It was introduced in the winter of 1997-8 at a rate of £20 for a single person. Today, however, it has risen to £200 or £300 for someone over 80.

There has been a massive increase in the number of British pensioners opting to live abroad over the last few years.

All British pensioners who were eligible for the payment while still resident in the UK are still entitled to claim the money provided they live within the European Economic Area, which includes the 27 EU member states, as well as Norway, Iceland, Switzerland and Liechtenstein.

Some in Britain argue that the benefit was introduced to ensure the elderly kept warm in the British winter where average temperatures fall to between 3C and 4C. They were never intended for pensioners in countries such as Spain where winter temperatures rarely drop below 11C.

If past experience is anything to go by, this winter will see yet another increase in the number of overseas residents claiming the benefit and the recent addition of Bulgaria and Romania to the EU will swell the numbers.

By far the largest number of benefits made to overseas residents are paid to pensioners living in Spain where the number of payments has risen from just over 5,000 in 2002-3 to more than 24,600 last year – at a cost of £3.9 million.

Alistair Carmichael, the Liberal Democrat MP for Orkney and Shetland, called on new Prime Minister Gordon Brown to review the payment to overseas residents living in warm climes. He said: “This is by anyone’s standards a substantial amount of money, which seems to defeat the purpose of the benefit being made available. The treasury should be looking in some way at how this issue can be addressed.”

A spokesman for the department of work and pensions said: “European Community law means that some benefits acquired in one member state must be paid to people when they move to another country within the EEA. The winter fuel payment is only paid to former UK residents living in the EEA if they qualified for it before leaving the UK. We must treat all those states equally and may not, therefore, make payments based on winter temperatures.”

Rampant construction along the Spanish coastline is damaging Spain’s shores and endangering the vital tourism industry, environmental organisation Greenpeace warned last week.

Greenpeace say developers plan to build more than 200,000 hotel rooms, 316 golf courses and 112 marinas in environmentally sensitive areas, threatening to damage Spanish costas that annually attract millions of tourists. Spanish police are currently investigating nearly 200 cases of corruption in the southern coast region of Andalucia, that have led to illegal building along protected coastal areas.

The Spanish Environment Ministry had no immediate reaction to the report, although a spokesman said the government is also trying to protect the coast.

Last week, the European Parliament firmly condemned Spain for the environmental damage that over-development had caused in Madrid and along the Mediterranean coast. In a motion, it said the mix of lax building laws, greedy developers and corrupt politicians had had a “disastrous effect” on the country’s environment.

Tourism accounts for about 12 percent of Spain’s gross domestic product.

A new Spanish law brought into force on the 1st July is designed to bring greater transparency to the planning system and to increase confidence in the Spanish property industry. The new Spanish law will address urban sprawl, how to sustain and manage growth in cities, and protection of the environment. The new law also expressly defines ownership rights, landowners’ obligations and the right of citizens to participate in urban planning proceedings.

In an attempt to prevent abuse of the planning system, it will now be a requirement to make public the names of those who will benefit from land that has been reclassified as available for building. This means that public officials who have ties to the property industry or a property developer will be obliged to disclose this publicly as part of the planning process.

Isabel Blanco of law firm Irwin Abogados, said: “If the law is adhered to then the levels of corruption which have gained the Spanish property market a bad reputation should be significantly reduced. It appears that, in the most part, the new law will alleviate many concerns that people have surrounding buying a property in Spain.”

The so-called Spanish Land Grab law has been discussed in a meeting of the European Parliament saying that the Valencia Region was of particular concern. The Land Grab laws are causing much distress as some property owners in Spain are having their legally acquired lands taken by local authorities and then are being forced to pay large sums of money – often tens of thousands of euros – to pay for new infrastructure and new developments that they do not want and which are on their land.

The European Parliament on Wednesday has now adopted a resolution severely condemning massive urbanisation projects in Spain, which they say bear no relation to the real needs of the towns and villages affected. They are ‘environmentally unsustainable’ and have a ‘disastrous impact’ on the area’s cultural and historical identity, says the resolution.

The MEPs also called on Spain and its regional governments, particularly the government of the Valencia region, to recognise the individual’s legitimate right to legally acquired property.

Michael Cashman, the Labour MEP who has been defending the fundamental rights of victims of land abuses in several regions of Spain said, “I’m delighted this important resolution has been adopted - with the support of MEPs from all major political parties. Justice will in the end prevail. We will continue to fight until the issue is resolved - through the courts if necessary. It saddens me that we have to take it that far and that the Spanish regional authorities seem unwilling to stop the abuses sooner.”

Britons taking their car to Spain for a year or more must make sure that they officially import it, says Banco Halifax Hispania. Britons who spend up to six months a year in Spain can continue to drive their British car with British plates on, as long as it has a valid MOT and is taxed and adequately insured in Britain.

However, anyone planning to stay in Spain longer than this must officially import their car, which includes transferring it onto Spanish registration plates and paying Spanish road tax.

The process of importing a UK vehicle into Spain:

• Certificate of permanent export - You will need to hand all of your car documentation to the DVLA and obtain a certificate of permanent export.
• Obtain an NIE number - You require an NIE number, passport, driving licence, MOT certificate and insurance papers on hand at all times when registering the vehicle.
• Register the car with the local council - The car will need to be registered with the local council by obtaining a Nota de Empadronamiento or Residence permit from the town hall where you live.
• Pass the Spanish MOT - You will be required to have an ITV, the Spanish equivalent to the MOT to ensure that the car is roadworthy.
• Pay the registration tax - A registration tax is payable at 12% of the vehicle’s current value in Spain. However, there are exceptions and vehicles with a petrol-engine capacity of less than 1600 cc or a diesel-engine capacity of less than 2 litres are only subject to 7% tax. You will be completely exempt from tax if the car has been used in the UK during the previous six months; and you have lived in the UK during the previous 12 months; and if you have communicated the change of residence in the 30 days before the registration of the car. However, if this exemption is applied you will not be able to sell, rent or transfer the vehicle during the first year.
• Altering your driving licence – You will need to alter your driving licence, either by having your EU licence stamped at the Tráfico office, or by applying for a Spanish licence there.
• Pay Spanish road tax – You will need to pay Spanish road tax, which is obtainable from your Local Authority.
• Get the car insured – As soon as the car has been registered in Spain and received its Spanish plates, you must make sure that the car is adequately insured in Spain.
• Modifications to the car – In Spain, it is compulsory that right hand drive cars must be fitted with headlight converters to adjust the beam pattern so that it does not dazzle oncoming drivers.

Despite recent reports of a potential Spanish property market crash and figures showing an overall slow down in some areas of the country - particularly the Costas - the latest HiFX Property Report shows that Spain still remains the top destination for Britons buying overseas property. In light of these market conditions, the currency broker says Britons considering purchasing a Spanish property, or those who already own one in the country,need to be aware of how the Spanish market is changing and how this can best be used to their advantage.

While some areas of the Spanish Costas are certainly cooling and seeing market corrections due to over supply, other, less traditional, inland regions are becoming more popular with buyers.

Mark Bodega, of HiFX comments, “Forced to be more realistic about the prospects in the Spanish real estate market, holiday home buyers and investors alike will have to look for value rather than creating it artificially.

“Cut through the current hype and think carefully about the property you’re buying in order to make the most of the current market conditions. Only certain areas are suffering a slump due to over supply, whilst others still have much to offer.”

For holiday homers, the oversupply in some Spanish markets has lead to real bargains as investors look to extract themselves. With the abundance of low cost airline routes, the short flight time and the great weather Spain should continue to be a favourite with British buyers. Even for those looking for capital growth in the short term there are opportunities to be had in the lesser known Costas and inland. Coastal regions like Tarragona, and inland areas like Jaen and Cordoba may still provide excellent value.

Tenerife is acting like a property ‘micro-market’ within the Spanish economy. Despite Spain’s recent property crisis, Tenerife’s property sales are still rising and Tenerife is well placed to cater for the large number of people from the UK hoping to buy somewhere in the sun.

In 2001 the Tenerife government voted to limit the supply of new homes thus preventing over building.

Currently, property in Tenerife continues to rise in value, while mainland prices stagnate and could possibly fall in the coming months.

The foreign buyer market remains strong in Tenerife - 42,000 homes are owned by Britons and good rental incomes can be achieved.

The incentive of all year round sunshine and increasing tourist numbers, 6 million in 2006, has led to a demand for low cost flight operators to obtain new routes.

Tenerife’s resident population is one of the fastest growing in Europe. New mortgage lenders and applications are increasing and rents are high, encouraging locals to buy as soon as they can, ensuring local demand remains strong.

For anyone hoping to move to Spain and start a holiday accommodation business, the most recent industry statistics make disappointing reading. Take up of accommodation in Spanish resorts in April was down 3.5 percent on last year, while the number of available beds rose 2.0 percent, according to the Spanish National Statistics Institute.

Spanish Holiday Accommodation Facts

• Overnight stays in holiday lets (apartments, villas, campsites, etc) totalled 4.6m in April.
• Non-residents accounted for almost three-quarters of the lets. United Kingdom tourists were the largest group with over 1.3 million overnight stays in April, down 2.3 percent on last year.
• Holiday bed places increased 2 percent, to exceed 428,000.
• The holiday dwelling occupancy rate was 51 percent in April, 5 percent less than in the April last year.
• UK tourists, at 39 percent, were the largest non-resident group lstaying in accommodation, followed by Germany (23 percent), Sweden, Netherlands (5 percent each) and Ireland (4 percent).
• The Canaries were the most popular destination for tourists – logging some 2.8m overnight stays – 6 percent down on April 2006. Valencia was the second most popular destination with over 480,500 overnight stays- 9 percent down on last year.
• The highest occupancy level was in Madrid – 76 percent - followed by Navarra - 67 percent – and the Canaries - 60 percent.

Many Britons dream of owning a property in Spain, but research shows that when buying property abroad, only three in ten Britons have a survey carried out.

Banco Halifax Hispania believes that the importance of having a survey carried out cannot be overlooked when buying a property in Spain, as there are a number of things that could go wrong with the property which are not immediately obvious to the untrained eye.

Although surveying fees will increase the purchase cost, this sum is a relatively small price to pay for peace of mind, compared to the expense of trying to sort out unexpected difficulties in the future.

A professional surveyor will be able to identify signs of damage or causes for concern. Finding out about these potential problems at an early stage of buying may even help the renegotiation of a cheaper sales price to reflect the cost of repairs.

Your bank may be able to assist in giving advice regarding purchasing property in Spain. For example, Banco Halifax Hispania has an approved panel of English speaking Spanish surveyors who can assist you during your property purchase. They can also recommend English speaking Spanish solicitors who will ensure that all aspects of the purchase, including planning permission, title deeds and other legal requirements are satisfactory and will investigate the property as thoroughly as possible. They will also be able to carry out searches and legal investigations and check that there are no outstanding debts on the property.

This process is likely to be much smoother if the surveyor in Spain is fluent in English and has local knowledge and experience of acting for British customers. It is also good practice to use an independent solicitor rather than one that has been appointed by the agent that you are buying property from, to protect your best interests.

The Spanish environment ministry has revealed plans for a pre-emptive strike against plagues of poisonous jellyfish that are expected to blight the coast this summer according to the Times Online. Thousands of holidaymakers were stung last year as the translucent pests washed ashore from Cadiz to the Costa Brava.

“From an environmental point of view, leaving them in the water isn’t a bad solution, because they would be food for other animals, but for the population in general, and bathers in particular, they pose a health problem,” said marine biologist Josep-Maria Gili.

Like other Mediterranean countries, Spain is expecting an onslaught of jellyfish partly because of the decline in natural predators, such as red tuna and turtles. Also, scarce rainfall has meant less cool river water flowing into the sea and, as a consequence, the temperature of the sea around the Spanish costas has risen, which makes it easier for jellyfish to reproduce. The cool fresh water traditionally kept the jellyfish about 20 miles from shore, ecologists say. Last summer 400 bathers were treated in one single day in August for stings at a beach in Benalmadena, Malaga.

Authorities in Murcia have proposed erecting a 21-mile net to protect beaches; other municipalities say they’ll scoop the jellyfish from the sea and dump them in landfill sites.

A recent article in The Daily Telegraph highlighted that property owners in Spain cannot legally let their property without a special licence. In many areas of Spain, even if the licence is applied for, it is rarely granted.

Of course, property owners cannot know whether a licence will be granted or denied until they apply. If the licence is not granted, the owner can no longer continue renting the property ‘under the radar’ as the vast majority currently do. Hence, most owners never apply for a licence, certain that it will be denied anyway.

This practice may no longer be viable, however, as a fresh crackdown by Spanish tourism and tax authorities over unlicensed apartments and villas threaten homeowners with fines of up to €30,000.

“There are strict conditions before properties are approved for rental to holidaymakers,” says a spokesperson for the Spanish Ministry for Tourism. Properties that are licensed can expect inspections, health and safety checks etc. However, nearly all are not licensed, which means letting them to tourists is illegal.”

Richard Spiegal from holiday rental portal Espana Breaks said, “Most owners would have no problem if the authorities just issued licenses. In fact most would benefit from a set of consistent standards to follow. In Menorca they were taking a more pragmatic approach and allowing people to submit licence applications with every possibility of them getting passed. This means cash for local estate agents/architects (who do the paperwork) and legal renting which means quality tourists. It all depends which approach each region takes.”

Many homeowners rely on holiday rental income to pay the mortgage on their home in Spain. If this source of income is no longer available or worse, carries a real risk of financial penalty, many may be compelled to sell the property itself. Knowing that a property now takes an average of 39 months to sell in Spain, many homeowners face a very difficult choice between :

• Continue to rent and accept the risk of a substantial fine
• Stop renting and apply for a licence to do so legally
• Attempt to sell the property in a difficult market

Richard Spiegal believes that most homeowners would opt to let their property ‘legally’ if given a real option of doing so.

The Spanish Parliament has passed a law aimed at curbing near out-of-control urban development and spiralling property prices in Spain. For more than a decade, the real-estate boom has seen large-scale housing developments, golf courses and holiday complexes spring up across Spain.

The new legislation will oblige all owners of land in the five years prior to its development to be listed in official documents. In an effort to prevent corruption, senior local government officials will also have to declare their assets.

Spanish housing projects have been plagued by scandals. A number of officials have been arrested recently on allegations of fraud, money laundering and corruption linked to housing projects. In one of the biggest cases, nearly 60 people were arrested in the southern resort of Marbella, including a former mayor.

The government hopes that reducing the number of speculators and the degree of corruption will bring down prices. “With the instruments of this law we have to put the brakes on exorbitant house prices,” Prime Minister Jose Luis Rodriguez Zapatero told parliament.

The new law imposes more stringent checks on projects that would increase a town’s population by more than 20 percent.

The new law also reserves 30 percent of future property development for social housing and allows for planning decisions taken over the past two years to be reviewed under certain circumstances. It will come into force on 1 July.

Spain has become the most popular destination for Europeans thinking of working abroad, ahead of the UK according to a Financial Times/Harris poll taken in five European countries.

The poll portrays Spain as a country at ease with itself: its citizens are relaxed about immigration and are the most optimistic among any big European country that their lives are getting better.

The poll of 6,561 adults in Britain, France, Germany, Italy and Spain offers an insight into the factors that are pushing and pulling migration in Europe and the extent to which it is seen as a political problem.

“The survey found that while the UK was second only to Spain in its attractiveness as a work destination, British citizens have become hostile to immigration from within the EU. Almost half, 47% of Britons saying it had a “negative impact” on their economy,” published the Financial Times.

Spain was the country in which foreigners would most like to work (17%) followed by UK (15%) France (11%) and Italy (6%). French and Italian citizens were the most likely to want to emigrate to Spain.

The poll showed that a total of 42% of Spaniards believed immigration was good for the economy, compared with 19% in Britain and France. However, a large majority of Spanish respondents (71 %) still wanted tighter border controls, a reflection of illegal immigration from Africa.

Over 50,000 British people get married abroad every year and Spain is an ideal location and the perfect setting for a romantic, stress free wedding. It’s important to bear in mind that you need to have been resident in the consular district your wedding is planned for at least 21 days before your wedding. To avoid disappointment and frustration, consult with the regional authorities where you plan to marry well in advance of your planned marriage date.

If you want to get married in Spain you must take the following issues into consideration:

• You must be over the age of 18.
• An application form available from the Civil Registry or the District Court of the bride’s residence must be filled out. This form has to be signed by both parties and details the name, occupation, domicile, residence and citizenship of the couple and their parents.
• An original birth certificate must be provided – this must be translated into Spanish and the translation authenticated by the Spanish Foreign Ministry.
• An original passport must be provided.
• Proof that parties are free to marry – A document to testify this can be received at the Civil Registry.
• Divorce, annulment or death certificates from previous marriages must be presented. If this is relevant you will also need to present an original copy of your previous marriage certificate. Again, this must be translated into Spanish and the translation authenticated by the Spanish Foreign Ministry.
• Religious marriages must be organised via the local church authorities and the church involved must be licensed to marry. To be accepted under Spanish law, religious marriages must also be registered with local civil authorities.
• The paperwork is lengthy and time consuming, so make sure that you leave enough time before your wedding day for your application to be processed.
• Weddings in English will need to be translated.

Banco Halifax Hispania casts some light on Spanish traditions for those people wishing to get engaged and married in Spain.

Getting engaged in Spain:

• The engagement of a couple is symbolised by the giving of a necklace or ring to the bride to be.
• At this stage the groom asks the bride’s father for permission to marry his daughter and may present the father with a watch.
• Engagements in Spain typically last several years.
• During this time a couple may buy a home together, but it is not common for them to live together at this stage.
• The home is often furnished and rented out. This helps with the mortgage payments until the couple moves into the house together.

Getting married in Spain:

• It is unlucky for the bride to see the groom the night before the wedding.
• The bride will travel to the church with her father, who will give her away.
• The bride may wear a traditional white dress or a flamenco dress, with several girls and boys dressed to match.
• Wedding rings in Spain are worn on the right hand.
• The bride and groom may exchange a pouch for 13 gold coins during the ceremony, which is considered to be a symbol of sharing. Traditionally these coins have been in the family for years, although imitation gold coins are now increasingly used.
  The bride’s bouquet is thrown into the air at the end of the ceremony and the girl who catches it is expected to be the next to get married.
• The bride may also have a basket of pins that resembles lilies or orchids. These pins are handed out to all the girls at the reception who wear them upside down whilst dancing. Tradition states that if the pin falls out the girl will marry.

Ian Smith, Head of European Operations at Halifax plc, said:

“Spain is an ideal location and the perfect setting for a romantic wedding. It also remains the most popular destination for British people buying property in Europe.”

The European Commission has threatened Spain with court action unless it changes its so-called land-grab laws by the end of this year. The laws have left thousands of homeowners, particularly in the Valencia area, facing the loss of their property and huge bills says Homeowners Overseas magazine

The 1994 law was passed to ensure community development was not blocked by individual landowners. In practice, the law has often been used by unscrupulous developers to reclassify land and claim it under a compulsory purchase order.

Some 20,000 such orders have been made since the law was introduced and many overseas owners have lost their homes or have been presented with crippling bills for the installation of roads and drainage on grabbed land for which they - quite unbelievably - are liable. The law was amended in December 2005 but the Commission, having been collectively petitioned by some 15,000 aggrieved property owners, says that it still breaches EU procurement regulations and that citizens’ property rights are still not protected.

An EU report on the issue of land grab is due to reach the European Parliament in June. The report says that in a large number of documented cases town councils had concocted urban development plans less because of their real requirements related to population growth and tourism and more because of what often appears as greed.

A statement from the commission says: “Spain now has just two months to provide a satisfactory response to the Commission’s justifiable concerns. If no such response is forthcoming, the Commission, supported by the European Parliament, can take Spain to the European Court of Justice in order that citizens’ fundamental rights to their homes are respected.”

Mark Stucklin, who runs the Spanish Property Insight consultancy, told The Independent that he believes house prices in many parts of Spain will stagnate this year, and stagnate or fall next year. “I think attractive properties in good areas and on the best developments will hold their value in the short-term, and deliver solid returns in the long-term. But when it comes to mediocre property in over-developed areas, all I can say is there is far too much of it around, and I am not optimistic about it,” he said.

Anyone considering buying property in Spain should be wary about the possibility of a house price crash.

Spain has seen seven interest rate increases since December 2005 and interest rates are now at 3.75 percent. This year an estimated 800,000 properties are to be built in Spain. The demand for new properties is estimated at to be only 600,000 properties. Share prices of Spanish property companies and banks fell dramatically yesterday amid property market worries.

Earlier this year the OECD warned that house prices in Spain might be overvalued by as much as 30 percent.

Two major building companies, Inmobiliaria Colonial and Grupo Inmocaral, saw their share prices plunge on the Madrid stock market yesterday. Colonial shares closed down 12.6 percent and Inmocaral closed down 11.3 percent.

Despite market concerns, the chairman of Astroc, one of the Spanish property firms at the heart of the market wobbles, has said the fears are unfounded.

House price concerns hit shares in Spanish banks because of fears customers will be unable to pay back their mortgages. Over 90 percent of mortgages in Spain are on variable interest rates rather than fixed rates, so interest rate changes can have an immediate effect on the housing market.

Spain is the most popular place for British people to own a second home. About 70,000 people in the UK own a property there. Spanish house prices averaged £165,000 according to the latest figures from kyero.com. Last year British demand for Spanish properties fell by 10 percent.

Further Reading:
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/04/25/nspain25.xml
http://news.bbc.co.uk/1/hi/business/6592203.stm

People should ‘paws’ for thought when planning to head off with their families to spend the winter months in their Spanish holiday homes, says Banco Halifax Hispania.

It takes six months to complete the pet passport process, so people need to start early if they want their pets to join them on an extended trip to Spain during the winter months.

Pet owners should not only ensure that the holiday home, destination and travel plans meet the needs of the pet, but also that the pet meets the requirements of the Pet Travel Scheme (PETS.) Failure to do so will lead to a pet having to spend up to six months in quarantine upon their return to the UK.

To ensure that your pet can travel to Spain and be allowed entry back into the UK, the following requirements must be met:

• Your pet must be fitted with a microchip.
• Your pet must receive a rabies vaccination – it must be at least three months old to receive this vaccination.
• Approximately one month after it has received the vaccination, your pet will need to take a blood test to ensure that it has sufficient immunity from rabies. If your pet fails the blood test it will need to be vaccinated and tested again.

Once your pet has met all of these requirements it will receive its PETS certificate. However, your pet may not re-enter the UK under PETS until six months after the date that the successful blood sample was taken.

To allow your pet to enter Spain you also need an Export Health Certificate, issued after examination by a vet in the UK. This is different from PETS and your pet may be refused entry to Spain if you do not have the certificate.

Your pet must be treated for ticks and tapeworm 24 to 48 hours before it is checked in for its journey back to the UK. You must receive an official Certificate of Treatment to prove that your pet received this treatment. It is recommended that you take a list of vets with you who will be able to provide the treatment.

You will also be asked to complete a Declaration of Residence to declare that your pet has not been outside of the qualifying countries in the six months before re-entering the UK.

Travelling abroad can be a traumatic experience for both pet and owner and careful consideration of the journey can help minimise any distress. Banco Halifax Hispania offers the following advice to travellers with pets:

• Consider the car, ferry or aeroplane journey from your pet’s perspective. A journey to Spain via car is a long way, but your pet can travel with you in the car. However, if you fly to your destination, your pet will be secured in a cargo hold for the duration of the flight and during any delays.
• You must book your trip with a PET approved carrier and travel on a PET approved route.
• Travelling overnight is recommended, as your pet will most likely sleep through the journey.
• Animals can die if left in vehicles in high or cold temperatures or sunlight.
• Pet carriers should be firmly secured in cars.
• Travel can be stressful for a pet, especially a young animal.
• Discuss with your vet whether you should feed your pet prior to or after a journey.
• Provide your pet with adequate water prior to, during and after the journey.
• Assess the climate of your destination in Spain. Certain breeds, and in particular older animals, will struggle to cope with sudden changes in temperature and humidity.
• Decide whether the accommodation conditions will be suitable for your animal. Cats in particular can become extremely unsettled in new environments.
• Will the pet fit into your daily routine whilst in Spain?
• Will you be able to provide the necessary exercise whilst on holiday that a dog would require?
• Is your pet adequately insured whilst in Spain?

Ian Smith, Head of European Operations at Halifax, said: “If you are planning to spend the winter months in your holiday home in Spain with your pet, you should apply for a pet passport now. In addition, you should not only ensure that your holiday home, destination and travel plans meet your pet’s needs, but also that your pet meets PETS’ requirements. Failure to do so will lead to your pet spending up to six months in quarantine upon your return to the UK.”

Spanish succession tax applies to inheritances and gifts reports Bill Blevins, Financial correspondent of Blevins Franks. For anyone who owns property in Spain, or other Spanish assets, it is important to familiarise yourself with Spanish succession tax. It is different from UK inheritance tax and has a real top rate of nearly 82%! It is payable if the beneficiary resides in Spain, or if the asset being passed on is in Spain.

The most significant difference between UK inheritance tax and Spanish succession tax is that, unlike in the UK, in Spain there is no exemption between husband and wife. So, if you live in Spain with your spouse, on the first death the survivor can be liable for Spanish succession tax on worldwide assets.

In some of the autonomous regions in Spain there is a trend towards increasing the relief or abolishing succession tax between spouses and direct line relatives. The rules vary from region to region and will depend on certain conditions being met. Where the regional rules are not yet set or not met, the state rules will apply. The state rules also apply where the deceased is not resident in Spain – in other words, if you own property in Spain but do not live there, your heirs will be faced with the state rules regardless of what the rates may be in the area your property is located.

The state rules
The tax rates differ depending on the value of the amount inherited.

These range from 7.65% for a sum up to €7,933, to 34% for €797,555 and over. Beneficiaries are graded into four different groups and the more remote the beneficiary’s relationship is to the deceased, the lower the tax allowance and the higher the tax rates. The four groups are:

• Group 1 - natural and adopted children under 21
• Group 2 - natural and adopted children aged 21 and over; grandchildren; parents; grandparents; spouses; unmarried partners registered as a pareja de hecho (registered couple) in Andalucía or Catalunya
• Group 3 – in-laws and their ascendants/descendants; stepchildren; cousins; nieces/nephews; uncles/aunts
• Group 4 – all others, including unmarried partners unless registered under pareja de hecho.

There is an allowance available between husband and wife, or direct line descendants and ascendants, which is a little under €16,000 – very low if you own Spanish property!

If an inheritor is a direct line descendant under the age of 21, there is an additional deduction of €3,990 for each year they are under 21. The total deduction is restricted to €47,858 per child or grandchild.

For more distant relatives (e.g. those in Group 3) the exemption is €7,933. There is no exemption for beneficiaries who are not related, including unmarried couples unless they can be registered.

A main home in Spain may be virtually exempt from Spanish succession tax provided the beneficiaries are either your spouse, parents or children and they continue to own the property for 10 years from the date of death. The exemption can also apply where the beneficiary is a more distant relative over the age of 65 and they have lived with you for at least two years before death.

Assuming that all the conditions are met, the value of the house can be reduced by 95% in calculating the tax base liable to succession tax, subject to a maximum reduction in value per inheritor of €122,606. This only applies to a principal private residence owned by Spanish resident.

UK inheritance tax
Even if you move to live in Spain you are still likely to be UK domiciled and therefore liable to UK inheritance tax on your worldwide assets. Domicile is a longer term concept than residency and more akin to a person ‘belonging’ to a country. It is largely dependent on your father’s country of origin, but can be varied through life. To prove that you are not UK domiciled you need to have cut all ties with the UK and firmly put down roots in your new country of abode.

For anyone living in Spain but UK domiciled, there is an inheritance tax liability in both countries. However, any tax paid in Spain can be offset against tax due in the UK, and vice versa. If inheritance tax is paid in the UK and is higher than the Spanish succession tax liability, you will not receive a refund of the difference.

Spanish succession tax can be reduced if a ‘usufruct’ is created whereby a surviving spouse is left a ‘life interest’ in the property rather than the deceased’s half of the property outright.

Golden Trust
To reduce your succession tax further you might set up an offshore discretionary trust, which can, in the right circumstances, protect your assets from inheritance tax both in Spain and the UK. Once you have lived in Spain for three years with the intention of staying there indefinitely and shed your UK domicile status, a ‘Golden Trust’ can be set up where assets are outside of the estate for both Spanish and UK inheritance tax purposes while you continue to benefit within your lifetime and your spouse’s. If eventually either of you return to the UK to live, the assets remain outside your estate indefinitely for the benefit of all your beneficiaries.

Inheritance tax can be a crushing tax wherever you live. It can have devastating effects on inheritors already in grief. To avoid your beneficiaries from having to suffer the consequences of bad planning – or no planning at all – if and when you move to Spain, or you own property in Spain, forward planning is the answer.

Unbearably noisy neighbours have forced 600,000 people in the UK to move house in the last 12 months, according to the Telegraph.

Anyone considering moving to France or Spain to get away from noise, however, should pause for thought. More people in France and Spain than in the UK are fed up with their neighbours’ noise.

A European-wide survey of 2,000 households found:

• In Britain, one in seven families say their quality of life suffers a great deal or a fair amount because of sounds, which are outside their control. A similar proportion say that they are significantly and regularly disturbed by noise made by their neighbours or in the immediate area outside their homes.
• 40 percent of French households reported finding neighbours’ noise intolerable.
• 34 percent of German and 33 percent of Spanish households reported finding neighbours’ noise intolerable.
• Only 12 percent of British people said they suffered significant stress caused by noisy neighbours.
• 13 percent of French people said they had confronted neighbours about noise.
• Only 5 percent of Brits said they had confronted neighbours about noise, making them the least likely in Europe to have complained to neighbours about noise.