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Rental AccommodationYou will need to draw up a rental contract with the owner. Although it is valid and legal to draw up a verbal contract, it is advisable to do it in writing. In this case, the agreement must show the names of the owner and the tenant, a description of the accommodation, the length of the agreement, the rent and other clauses you wish to include. In principle, the tenant and owner are free to decided on the contract’s length. If it is arranged for less than 5 years, it will be extended each year automatically until 5 years have passed unless the tenant informs the owner, at least 30 days before the expiry date, that he does not intend to continue living in the rented accommodation. If the length of the contract is not stipulated, it is considered to be for one year and extendable for equal periods of time up to a maximum of 5 years.
At the time the agreement is drawn up, the tenant is obliged to give the owner a deposit payment equal to the rent for one or two month. The rent, i.e. the amount that the tenant pays to the landlord to rent the accommodation is freely agreed by both parties. Payment is monthly and is updated in line with the Consumer Price Index
The cost of renting accommodation in Spain varies from one city to the other and it is difficult to generalise. As a general rule, though, rents are most expensive in the main cities: Malaga, Seville and Granada. Living in the centre of one of the main cities will always be more expensive than in the outskirts or surrounding towns, although these are normally well connected by trains or buses that will normally take you to the city centre in under 30 minutes.
To give you an idea, the price of renting an apartment in a house is between €400 and €600. If the flat has two rooms, the amount may be estimated at between €500 and €900. Renting a single room may cost from €180 to €270 per month, without counting expenses for paying a pro-rata part of the electricity, water, gas and telephone bills, which are usually paid every two months.
If you are going to buy a property, the legal transaction must be drawn up before a notary. Any ordinary or savings bank will provide information on the cost of mortgages and the respective formalities.
The price of accommodation in Spain is relatively high. You can request information from the Sociedad de Tasacion [Property Evaluation Society], which publishes a half-yearly Bulletin that shows average property prices, statistics on price trends and forecasts. You can also obtain information on property transactions in Spain from the Fundacion Instituto de Propietarios Extranjeros (Foreign Property Institute Foundation).
The Cost of Living in Spain
In general, the cost of living in Spain is acceptable and there is universal, free access to essential social services such as health and education.
In recent years, the cost of housing has increased significantly, which has meant that housing costs are the most significant household expenditure, amounting to figures in excess of 30% of the total household budget in 2006.
To give you an idea of the general cost of living in Spain, we have selected the prices of some everyday items, the price of which will naturally vary from shop to shop, from region to region and from city to city. These are as follows:
Bus/Metro and Fuel Cost´s:
A household budget survey conducted by the National Institute of Statistics showed that each month Spanish households spend an average of €10.5 on water, €22.41 on electricity, €49 on the telephone and related services and €16 on gas. An invoice is issued for these services every two months.
Shopping
Before going shopping in Spain, you must know the opening hours, which vary depending on the area and its customs. The situation is complex since each Autonomous Community has the power to set times, and some extend the number of working Sundays.
Shop opening hours are set by law although, in practice, if you wish to go shopping all large towns have several chains of department stores that stay open for most of the day and which offer a wide range of goods. These normally open from Monday to Saturday from 10:00 to 21:00. Current commercial law limits the number of working Sundays per year for the large shopping centres.
Small businesses open from Monday to Saturday, from 09:30 until around 13.30, although this depends on the business activity in each area.
Shops re-open in the afternoon at around 16:30 or 17:00 until 20:00 or 20:30, although these opening hours are more flexible in smaller towns.
The afternoon is the busiest time for businesses as a large proportion of the active population work 'intensive hours', that is, from early morning to early afternoon. So, most people use the afternoon to do their shopping until almost nine o'clock at night when most businesses close until the next day.
You can find very good quality items in Spain, some of which are handmade and very reasonably priced. The best items are textiles, leather goods (bags, briefcases, suitcases, clothing, etc.), shoes, ceramics, glassware, clothing and all kinds of craftwork.
You can find both Spanish and imported goods of all kinds in the large cities, as well as typical goods from other Spanish regions.
Tips are not obligatory in Spain, although it is customary to pay between 5% and 8%, not exceeding EUR 3 in establishments such as bars, restaurants, cafes or taxis. Payments are always much more widespread in credit card transactions.
In Spain, goods, activities and services put on the market for consumers or users will not be dangerous to your health or safety, except those goods which are usually or legally permitted under normal or foreseeable conditions of use.
Generally speaking, consumers or users should be adequately informed of any risks likely to arise from use of goods and services, bearing in mind their nature and intended end users. The Autonomous Communities shall be in charge of ensuring compliance with the rules on marketing safe products, and the Ministry of Health and Consumer Affairs where the goods pose serious and imminent risks to consumers' health and safety, as the only appropriate way of dealing with such a situation is by adopting measures at national level.
The usual time for breakfast is from 08:00 to 10:00 in the morning. Lunch in restaurants is from 13:00 to 15:30. Dinner is served from 20:30 until 23:00.
Many establishments offer continuous service throughout the day, a practice this is common to cafes and bars, in many of which it is possible to have tapas, combination dishes, sandwiches and bar food, and cinemas also have a flexible working day, starting between 16:30 and 17:00 in a continuous session which starts the last screening at about 22:00, and in fact in the big cities there are also cinemas with late night screenings.
Theatres offer a single session starting at around 20:00. Banks are usually open from 08:30 to 14:00 from Monday to Friday (some work on Saturday mornings or some afternoons during the week) and post offices open from 08:30 to 14:30 from Monday to Friday and from 09:30 to 13:00 on Saturdays, chemists open from 09v30 to 13:30 and from 17:00 to 20:00 from Monday to Friday.
On Saturdays they are open from 09:30 to 13:30. In each city you can find duty chemists that work 24 hours a day, every day, and private companies usually work from 09:00 to 18:00 or 19:00 from Monday to Friday, with a two-hour lunch break. There are also intense working days from 08.00 to 14:30 or 15:00.
Nights in Spain have a special significance, especially from Thursday to Sunday. Pubs, bars and discos stay open until 03:00 or 04:00 and there are many places in the big cities that stay open until sunrise.
Income tax varies depending on whether the taxpayer resides in Spain. If you are resident in Spain, you will have to pay tax on your total worldwide income (IRPF, personal income tax), in other words any income from employment, capital gains or business earnings, and any asset gains and losses. However, some types of income are exempt, e.g. benefits recognised by the Social Security as a consequence of disability or severe invalidity, public grants or lottery and betting winnings.
Spain has entered into agreements with all other Member States, except Cyprus and Malta, which are designed to help you avoid paying tax twice on the same income in different countries. So if you earn money in another Member State, you will pay tax on that income either in Spain or in the other country, or pay a portion in both countries, depending on the terms of the double taxation agreement between Spain and that country. Even if there is no tax agreement, however, Spain’s domestic legislation entitles you to a credit against your Spanish tax liability for the lower of the following quantities: the actual amount paid abroad in tax of a similar nature or the result of applying the average effective tax rate to the portion taxed abroad.
You are taxable on income you receive during a tax year (generally the same as the calendar year). With the exception of capital gains obtained in a period of over one year and taxed at 15%, tax is charged at progressive rates, the rate increasing in line with the level of your taxable income. In calculating how much tax you have to pay, you are entitled to reductions before applying the taxation rate that basically depends on your personal and family circumstances, and to various deductions, mainly for investments in your usual place of residence. These decrease the amount of tax payable.
Tax is withheld at source on certain types of income, namely income from employment, self-employment and investments other than real estate. If you are an employee, your employer will withhold tax from your wages at a sliding rate, depending on your personal and family circumstances and on your total earnings. If you provide professional services, tax will also be withheld on your income at a flat rate. If you are an entrepreneur or self-employed professional, you have to make quarterly advance payments on your estimated tax liability for the year. Everyone, provided that their income exceeds a certain minimum amount, must calculate their own tax liability and file a tax return after the end of each year with the tax authorities. The annual return can be filed at the offices of the tax authorities, with financial institutions or electronically, and must be completed in the months of May and June of the year following the year in question. Any outstanding tax must either be paid at that time or in two instalments: 60% at the time of filing the return, and the balance by a pre-determined date, no later than the start of the month of November of the same year.
If you live abroad but gain some income on Spanish territory, you must pay tax on the latter (tax on the income of non-residents). As is the case for IRPF, certain types of income are exempt from taxation. In general, the tax payable is obtained by applying a rate of 25% to the taxable amount. In the case of transfers of real estate situated in Spain, the buyer must withhold and pay 5% of the total as an advance payment.
If you are resident in an EU Member State and have gained income from employment and business activities in Spain representing at least 75% of your income, you may choose to pay IRPF, provided that this income was indeed subject to tax on the income of non-residents during the period in question.
If you are resident in Spain for tax purposes, you are subject to tax on your net wealth, i.e. on your worldwide assets and financial rights, minus any charges and debts, if your net wealth exceeds a minimum amount. Some assets and rights are exempt, such as your usual residence up to a maximum of €150,253.03. Wealth tax is charged at progressive rates, and you have to calculate your own tax liability, complete a tax return and pay the tax during the period within which the IRPF return must be filed.
If you are not a resident, you must file the tax return for any of your assets and rights that are situated, may be exercised or must be fulfilled in Spain, irrespective of the value of your net wealth.
Tax is payable on the acquisition of assets and rights through inheritance, legacy or any other type of succession, lifetime gifts and the receipt of money by the beneficiaries of life assurance policies where the policyholder is not the beneficiary.
In the case of “mortis causa” acquisitions, the taxable person is the successor in title; in the case of donations, it is the donator, and in the case of life assurance policies, it is the beneficiary.
A taxpayer is considered ordinarily resident in Spain if any of the following situations applies:
It is assumed, unless there is proof to the contrary, that a taxpayer is ordinarily resident in Spain if his or her spouse is ordinarily resident there, unless they are legally separated, and any dependent minor children.
In certain circumstances, natural persons who have moved to Spanish territory and whose residence for tax purposes is therefore in Spain may choose to pay the IRPF (personal income tax) or the IRNR (tax on the income of non-residents) over the period in which the change of residence takes place and during the following five tax periods.
VAT, which has been harmonised in the European Union, is a consumption tax on goods and services supplied by entrepreneurs or professionals, and intracommunity purchases of goods and imports. It is applied throughout Spanish territory, with the exception of the Canary Islands.
This taxation of added value at each stage in the production chain takes place via the cascade mechanism, i.e. entrepreneurs or professionals pass on the tax through the prices of their goods and services and deduct the tax on purchases used in the production process. When the deductions exceed the tax due, taxable persons may request a refund on the balance on 31 December.
Legislation includes various possible exclusions or exemptions. These include the health and welfare services, the education sector, financial and real estate transactions (particularly the second and last instalments on buildings when these are made upon completion of construction).
In general, the place of the taxable transaction in the case of goods is the place of transaction, while for the provision of services, it is the service provider's central office. In both cases, there are various special rules.
The VAT base is generally calculated using the total amount paid in return for the good or service. In the case of imports, it is the result of adding various amounts to the customs value, such as the incidental expenses incurred up to the first place of destination within the Community, provided that these are not included in the customs value.
In general, VAT must be paid by natural or legal persons who are entrepreneurs or professionals providing goods or services subject to taxation (there is a special rule known as the reverse charge mechanism for entrepreneurs or professionals acquiring goods or services subject to tax from persons or entities not established in the territory as defined for VAT purposes, for which exceptions also exist), the purchasers in intracommunity transactions and those who effect importation.
There are three tax rates in Spain: the general rate of 16%, and two reduced rates: 7% (e.g. on accommodation or transport for passengers and their luggage) and 4% (e.g. on food such as bread, fruit and vegetables, books, newspapers, medicines for human use or certain types of social housing).
Various special arrangements exist: the simplified scheme, the arrangements for agriculture, livestock and fisheries, second-hand goods, works of art, antiques and collector’s pieces, investment gold transactions, travel agencies, the equalisation scheme and the scheme for electronically supplied services.
In general, the tax period coincides with the calendar quarter, although it is only the calendar month in the case of large businesses (those with a turnover of more than €6,010,121.04 euro for the previous calendar year). In addition to the returns that must be filed for each of these periods, taxable persons must submit an annual summary statement.
This is a tax on taxable inheritance transfers (“inter vivos” taxable transfers of any goods and rights that make up the assets of natural or legal persons, the creation of rights in rem, loans, securities, lettings, pensions and administrative concessions), corporate transactions (the formation of companies, the increase or decrease of their capital, mergers, demergers and the dissolution of companies, contributions made by shareholders to make good company losses and the transfer to Spain of the effective head office or registered office of a company when neither of these are situated in the European Union) and documented legal acts (notarial, commercial and administrative documents).
The following local taxes must be paid to the municipalities: tax on immovable property (Impuesto sobre Bienes Inmuebles), tax on economic activities (Impuesto sobre Actividades Económicas) and vehicle tax (Impuesto sobre Vehículos de Traccion Mecanica). Taxes on construction, installation and works (Impuesto sobre Construcciones, Instalaciones y Obras) and on the increase in value of urban land (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana) may also be charged.
Social Life
Social life in Spain is very important. Family and friends are vitally important to most Spaniards. Spaniards normally act and speak in an informal and spontaneous manner during social interactions and physical contact is frequent with greeting, kisses and embraces that may take those who are visiting Spain for the first time by surprise. Similarly, the Spanish habit of interrupting one another is not considered bad manners in Spain, but part of spontaneous communication.
The normal time for lunch is 13:30 to 15:30 and the normal time for dinner is 21:00 to 23:00, quite a lot later than is normal in the rest of Europe. It is common to go out to dinner with friends, especially at weekends.
Spanish nightlife is legendary and one of Spain’s greatest attractions. Bars and discothèques stay open throughout the night. The hospitality sector is one of the most vibrant sectors of the Spanish economy.
Although great changes have taken place in recent years, the family is still at the heart of personal relations and is very important. Maintaining ties of friendship is also very important.
There is a great variety of popular festivals, some of international renown, which are normally related to religious traditions.
Shopping is another very popular activity. The shop opening hours are usually from 10:00 in the morning to 20:00 in the evening. The opening hours are usually longer in shopping centres.
The education system in Spain is divided into the following levels:
Nursery education: 0 to 6 years, organised in two stages of 3 years each. This is voluntary with the second stage from 3 to 6 years being widely taken up.
Primary education: From 6 to 12 years of age, compulsory and free of charge in public and grant-aided schools.
Compulsory secondary education (CSO): 12 to 16 years. Taught in Secondary Education Institutes. Successful pupils leave school with a secondary education school certificate.
Bachillerato: After obtaining the compulsory secondary education school certificate, the student may opt to continue with middle level vocational training studies or bachillerato studies.
The bachillerato (high school certificate) lasts two years, normally from 16 to 18, and confers the qualification of bachiller (baccalaureate). It provides the foundation for higher level vocational training or, if the students pass the necessary access tests, to university education.
Vocational training: A broad range of mid or higher level vocational training courses are available, organised on a modular basis and of variable duration, which prepare students to work in a variety of jobs. Special pathways exist, generally via exams, for access to university education or higher vocational courses. Passing mid-level vocational training entitles the student to the qualification of technician while higher level vocational training entitles the student to the qualification of higher technician.
University education: Divided into three courses. In some cases, the first course gives access to the qualification of a university diplomado [diploma] The second course entitles the student to the qualification of university licenciado [batchelor’s degree] and the third course confers the qualification of PhD.
Universities are independent bodies able to design their own educational courses. They may be public or private. The qualifications of private universities must be officially recognised by the Ministry of Education for them to have official value.
Special training courses are also available, eg. artistic courses (music, dance, plastic arts and design and dramatic art) and language teaching.
Pre-school education is available up to 6 years and is divided into two groups: up to 3 years and from 3 to 6 years. This stage is not compulsory although the Central government will guarantee the existence of a number of sufficient places to ensure schooling for those who request it.
The maximum number of students per classroom is from 20 to 25.
Primary education is compulsory and free, for children aged 6 to 12 years, and consists of 3 cycles of 2 years each:
Education at this level is intended to provide all children with a common education that making it possible for them to acquire basic elements of culture, to learn oral expression, writing and arithmetic, and, gradually, to become more autonomous in their environment.
Teaching of foreign languages begins in the first year of the second cycle (8 years of age).
Structure and duration: Upper secondary education is optional. Two systems of post-compulsory education currently exist in Spain: one established by the LGE and one by the LOGSE.
The first, called enseñanzas medias, consists of the bachillerato unificado polivalente or BUP, which lasts three years and normally prepares pupils between the ages of 14 and 17 for access to university. However, to get into university they have to follow a one-year university orientation course (curso de orientacion universitaria or COU).
The second system, incorporating the new bachillerato, lasts for two years (between the ages of 16 and 18), and prepares pupils for higher education institutions.
In both systems, vocational training (formacion profesional) is also offered as part of post-compulsory education.
School year: The academic year normally begins in the second half of September and ends in the last week of June.
Entry requirements:
Tuition feesPost-compulsory education is free of charge in state schools, although parents must cover the costs of additional services, such as canteens and transport.
Languages:
BUP and COU: Pupils are assessed continuously and at the end of the year receive an overall mark determined by all the teachers. There are two examination periods (convocatorias) per year, in June and September. Pupils who fail in any subject in June may retake it in September, while those who fail in more than two subjects in September must repeat the year. The COU procedures are almost the same, but pupils who fail cannot enrol more than three times.
Bachillerato: to move up from the first to the second year, pupils must not fail in more than two subjects. Those who fail more than three subjects at the end of second year are obliged to repeat the year. However, pupils may not take more than four years to complete their studies.
Certification:
Counselling is part of educational practice and is provided to pupils throughout the bachillerato.
Spanish Health System
Healthcare consists of providing the medical and pharmaceutical services necessary to ensure the health of system beneficiaries. In Spain, these services are provided through public hospitals (belonging to the Social Security) and also through private hospitals. The quality of health care in Spain is relatively good.
The Spanish state covers the health and pharmaceutical needs of all its citizens by means of the National Health Service, financed through Social Security contributions and managed by the Autonomous Communities through their Consejerías de Sanidad (Health Departments) and Servicios Regionales de Salud (Regional Health Services). More than 90% of the population use this system for their medical needs.
All employed and self-employed persons must join the Social Security system and pay monthly Social Security contributions. They are given a Social Security card which must be applied for in the Health Centre corresponding to their address. This entitles them to obtain free medical, pharmaceutical and hospital care but not dental care.
The system allows members of the public to choose their own GP. Most patients can obtain an appointment with their doctor within one or two days. To consult a specialist, patients must be referred by their GP, except in urgent cases. Unfortunately, as in most European countries, the waiting lists for a specialist visit or for elective or non-urgent surgery are usually long.
In an emergency, the best thing to do is to go to the nearest A&E department and, if necessary, you can call an ambulance by phoning 112.
Drugs are always prescribed by a doctor using an official prescription and the patient pays 40% of the price. Medicines usually cost less than in other countries, due to price capping by the government.
Chemists open in shifts to offer an out-of-hours service (night and public holidays) as duty chemists. You can find out which chemist is on duty by looking in the newspaper or in the window of any chemist shop, where a list will usually be affixed.
EU citizens who are not in the Social Security System may obtain health care during temporary trips to Spain provided they have obtained the European Health Card in their own country.
Approximately 15% of the population has taken out a form of private medical insurance to complement or as an alternative to the public health service. It is possible to take out such insurance with one of the many private medical companies or firms in Spain. These companies have their own clinics, surgeries and laboratories. Prices vary depending on the age and sex of the beneficiary. To give you an idea, a man of 40 will pay around EUR 44 per month, while a woman of the same age will pay €50.
Working in Spain European Union Legislation
Since 1 January 1992 the citizens of any country in the European Union or the European Economic Area have been able to work in any Member State.
As long as they are in paid employment, they are subject to the same legislation and benefit from the same advantages as national employees.
Every EU citizen may make use of public employment services.
Regardless of your place of residence, as a European Union worker you are entitled to take up an activity as an employed person in any Member State under the same conditions as nationals . Equal treatment applies to all conditions governing employment and work (e.g. remuneration, dismissal, occupational reintegration or re-employment after being unemployed).
The principle of equal treatment in access to employment implies that you have the same priority as nationals for access to employment in any Member State. This means that national provisions limiting the number or percentage of foreigners who may be employed do not apply to you. Consequently, when in a Member State the granting of any benefit to enterprises is subject to a minimum percentage of national workers, you are regarded as a national worker.
In addition, EC law states that any clause of a collective or individual agreement or of any other collective regulation concerning eligibility for employment, employment, remuneration and other conditions of work or dismissal shall be null and void in so far as it lays down or authorises discriminatory conditions in respect of workers who are nationals of other Member States.
No condition that would be conducive to discrimination against non-national EU citizens, or that would restrict the right to access to employment for EU citizens, may be imposed by the Member States. For instance, it is not permissible to prescribe special recruitment procedures for foreign EU nationals or to limit or restrict the advertising of vacancies in the press or through any other medium so that foreign nationals have less chances of being informed, or to impose conditions of registration at employment offices or residence requirements for access to employment.
The engagement and recruitment of a national of another Member State may not depend on medical, vocational or other criteria which are discriminatory on grounds of nationality in comparison with those applied to nationals.
Nevertheless, a national who holds an offer in his name from an employer in a Member State, other than that of which he is a national, may have to undergo a vocational test, if the employer expressly requests this when making his offer of employment.
Access to employment may depend on the possession of certain qualifications, diplomas, experience or the knowledge of a language.
It is permissible for a level of linguistic ability to be required for access to employment: for instance, a satisfactory knowledge of the national language. This means that the level of knowledge must be proportionate and reasonably necessary for the proper fulfilment of the tasks. National policies for the protection or the promotion of a language in a Member State comply with EC law, but such policies may not give rise to discrimination against nationals of other Member States. For example, the principle of non-discrimination precludes the imposition that the linguistic ability in question must have been acquired within the national territory. It is not permissible either to demand a specific language as mother tongue.
Professional experience acquired in different Member State should be taken into account under the same conditions as experience gained in the national territory.
Consequently, periods of employment completed by workers in a comparable field of activity in another Member State must be taken into account for access to a job or for determining certain benefits (e.g. remuneration, grade) under the same conditions as experience gained in the host Member State
The principle of equal treatment and the prohibition of discrimination on grounds of nationality are also applicable to employment in the public sector: employment with State companies (commercial companies, telecommunications operators, public transport companies), State bodies or institutions (universities, public hospitals, research institutions) and in the civil service.
However, Member States may still reserve certain posts for their own nationals. This can be the case only for those posts in the public sector that involve the exercise of powers conferred by public law and the safeguard of general interests of the State or local authorities, i.e. administrative units below the level of the State, such as town councils, etc. These criteria must be assessed for individual cases on the basis of the tasks and responsibilities which each post entails.
It may be inferred that employment with some specific State sectors and similar bodies such as the diplomatic service, the armed forces, police and security forces, judicial power and the tax authorities may be restricted to nationals with the exclusion of all other EU citizens. However, not ALL such posts involve the exercise of powers conferred by public authority and the safeguard of general interests of the State: e.g. administrative duties, technical consultation, maintenance. These posts cannot therefore be reserved for nationals. The free movement of workers in the public sector is independent of any specific sector and is linked solely to the type of post.
Any worker who has lost his job in the host Member State is entitled to the same unemployment allowances as nationals.
If you are seeking employment, you can ask for the benefits from your country of origin to be transferred for a maximum period of three months, but this must be done before you leave in accordance with the legislation of the country of origin. You must have been registered as seeking employment for four weeks before leaving, and you must notify your local office at least 2-4 weeks beforehand so that it can complete the necessary formalities. If possible, arrange an address in the host Member State in order to receive mail. You must also sign on at a national employment exchange within seven days after arriving in the host Member State.
EU and EEA citizens are exempt from requirements concerning visas, passports and medical checks when entering another EU Member State. An identity card allows the holder to enter freely and to move around for three months, which is useful if you find temporary work or are seeking employment.
EU and EEA citizens do not need a work permit.
They may exercise the occupational activity of their choice. However, as soon as they have found work and no later than three months after arriving, they must apply for a "residence permit for a national of an EU Member State".
It is valid for five years and automatically renewable.