Spain Saga Travel Insurance Legal writer broadcaster and lecturer in

Spain Saga Travel Insurance Legal writer, broadcaster and lecturer in Spain for more than 20 years, David Searl guides you through the minefields of Spanish law - don’t take off without it Annual or single trip cover for travel in the UK, Europe, or worldwide. Saga Travel Insurance provides a high level of cover for your holiday or business travel - even if your trip is not booked through Saga. A choice of single trip policy or our annual multi-trip policy. A choice of worldwide, European or UK cover for trips of up to 90 days at a time. Travel assistance before and during your trip Saga’s travel insurance policies include access to our travel assistance service, which provides: INSURING YOUR HOME As in any country, it is sound practice to carry homeowner’s insurance protecting you against damage or theft of its contents, and against claims from others who may suffer injury or damage resulting form your ownership. This is especially important when you are absent form your Spanish property for long periods, but be alert to clauses in your contract that render your insurance invalid if you are away from the property for more than a stated period of time. Often, by paying an extra premium, you can be covered even though you are absent much of the time. Both Spanish and international insurers offer various CSSA6790 Optional cover to suit your needs A choice of additional cover options, for example: > Scuba diving cover > Golf cover > Winter sports cover > Help and useful information - from advice on vaccinations and visas to assisting with medical emergencies and stolen passports. > 24-hour English speaking helpline and emergency translation service. For a personal quotation, without obligation, call stating ref. GP7517 0800 056 5464 Buy online at www.saga.co.uk Lines are open 8.30am-5.30pm weekdays and 9am-1pm Saturday. Saga Services would like to send you information about other Saga products and services and may pass on your details to other Saga companies for this purpose. Saga Services Limited is a wholly owned subsidiary of Saga Group Limited and is registered in England and Wales (Company No. 732602). Registered Office: The Saga Building, Enbrook Park, Folkestone, Kent CT20 3SE. 16 escape to the sun Spain policies at various prices. Make enquires among older residents to find a company that has given good service. As in most countries, you fill out a form in which you put a value you wish to insure on your house and its contents. Remember that, should you choose to insure your property for only half its real value, the insurance company, which makes its own evaluation, will pay you only half the value of any individual items that are stolen or damaged. People sometimes think they can insure half and then get full value when only two or three items are stolen or damaged, but this is not so. The company will also ask you to report on whether your property will be unoccupied for lengthy periods, how old the building is how many doors and windows there are, whether they are guarded by iron-barred rajas, if there is a burglar alarm system, and so on. If you do not respond truthfully to these questions, there can be grounds for a later denial of any claim you make. Your premiums will vary according to your situation. Be sure to read the fine print in your policy. Often, insurance against theft of the contents of your property will not pay unless entrance has been forced and there is evidence for this. If a “guest” at one of your parties makes off with your wife’s jewels, you will not be paid. If there is no copy of the contract available in your language, have someone translate for you. What will insurance cost you? Policies and conditions vary, but you can estimate that about one euro per year per thousand euros of value will cover the building itself against damage by natural causes or fire or explosions, if the building is located in a town. An older house in the country, far from fire-fighting services, would cost more to insure. Insurance of your furniture and household effects will be somewhere around €2.50 per thousand euros of value if you live in an apartment; up to €3.50 per thousand if you live in a detached villa. This covers fire and theft. If one of your steps collapses and the postman breaks his leg, or you leave the bathtub water running until your downstairs neighbour’s apartment is flooded, they can claim compensation from you as the owner. You can cover yourself for claims up to €50,000 for less than €20 a year. Most Spanish companies offer a comprehensive policy covering the building, the contents and third party claims. One company quoted a figure of €1,200 per year for comprehensive coverage of a villa and contents valued at €240,000. An apartment or townhouse would be less costly. BANK ACCOUNTS IN SPAIN Both residents and non-residents may freely open bank accounts in euros. The accounts of residents and nonresidents are distinguished from each other, because Currency movements can increase the price of your property by almost 10% in a year. Protect your self from this hidden danger! With a range of over 50 currencies and the facility to send your funds to any bank in the world free of charge Sterling Exchange is you one stop shop for all your foreign currency needs When it comes to exchanging your sterling speak to Sterling Exchange IF ONE OF YOUR STEPS COLLAPSES AND THE POSTMAN BREAKS HIS LEG, OR YOU LEAVE A TAP RUNNING AND YOUR DOWNSTAIRS NEIGHBOURS’ APARTMENT IS FLOODED, THEY COULD CLAIM COMPENSATION different regulations apply to taxation for the resident and the non-resident. The non-resident account is called a cuenta extranjera but, for all internal purposes, is exactly the same as the resident’s account. In addition to your normal current account from which you write euro cheques to pay your normal bills in Spain, you may wish to take out a Deposit Certificate in euros or another currency. The interest rates will vary, because Spanish banks have cut back their interest on deposit certificates, in line with the general drop in Spanish interest rates. In fact, the banks cut back their escape to the sun 19 Spain own rates they charge on mortgages. Those residents who presently hold time deposit accounts in Spanish banks should check their interest payments now if they are on a variable-rate scheme. It might be time to discuss this with your investment advisors. If you are a resident, 15 per cent of your interest earnings will be withheld and paid to the Spanish tax man in your name, just the same as for Spaniards. You may be eligible for a refund on this tax. (See the section on You and Your Taxes). If you are a non-resident, no tax will be withheld, but you will be liable for tax in your country of residence. Any bank operation involving more than €3,000 requires that the payer and the receiver of the amount THE INTEREST RATES WILL VARY, BECAUSE SPANISH BANKS HAVE CUT THEIR INTEREST ON DEPOSIT CERTIFICATES IN LINE WITH THE GENERAL DROP IN SPANISH INTEREST RATES be identified. Your normal current account may be paying as low as a miserable one-tenth of one cent (0.1 per cent) on its average balance, and you will be paying some of the highest bank charges in Europe for routine services. You may be irritated when you discover that your bank has charged you €5 to make a draft for €60 worth of pounds in order to pay for a magazine subscription in your home country, so be sure to ask in advance what these charges will be. And remember what we said in the first chapter about making sure of just how your pension cheque or funds form abroad will be transferred to you in Spain, just how long it will take from the time of sending to the moment you can write a new cheque. Many, many people have suffered greatly from delays in the transfer of funds, even when they are sent from a British bank to its branch in Spain, so ask the bank manager how long it will take. You may wish to use one of the rapid bank transfer systems such as SWIFT, which assures you of having the money sent quickly. It costs a little more, but it is probably worth it. There have been many complaints about high commissions charged on these transfers as well. Some people have been charged more than 4 per cent when sending money out of Spain. This would be €4,200 on a transfer of €120,000. Other banks charge fees of around €21 per €6,000 of transfer, a total of €420 on the same operation, or onetenth of the charge. BANK LOANS AND MORTGAGES With the introduction of the euro and the lifting of almost all exchange controls, both residents and nonresidents may now obtain loans and mortgages against their Spanish property in any currency from any bank in the world – if they can find a bank willing to lend against property in another country. Even very long-term endowment mortgages are beginning to appear, offered by Spanish branches of UK lending institutions. The good news is that inflation and interest rates are at an all-time low in Spain. Spanish bank mortgages are now being offered at rates of less than four per cent, the lowest in Europe. Signs for early 2005 are that rates should continue low. The euribor, the base lending rate for the euro, showed no signs of being raised by the Central European Bank. Those people purchasing a second home in Spain may find they can obtain a mortgage in their home country for the purchase of property in Spain. This could represent an ideal solution, but UK residents in particular must be careful about losing MIRA tax relief on their UK tax when they mortgage to purchase property outside the UK. They will have to pay UK tax on their loan repayments to the Spanish banks, should they mortgage in Spain, because the Spanish lending bank will not mortgage in Spain because the Spanish lending bank will not pay these taxes. 20 escape to the sun