The Spanish economy and financial issues for Brits on holiday or living in Spanish property
Just like the UK, Spain has become a cash and credit card society. Whether you are on your holidays in Spain or are residing permanently in your Spanish property, you will find that cash and plastic are the preferred method of payment for almost everything. Cheques are rarely used and most people living in Spain now use online banking for regular household payments and for transferring money between accounts.
Living in Spain - The Euro
The peseta was replaced by the Euro in Spain in January 2002 and is no longer in circulation.
Living in Spain - currency restrictions
There are no restrictions on the import or export of Euros into Spain. However, the export of any currency (not just Euros) in excess of 6010 per person per journey must be declared.
Living in Spain - credit and debit cards
All major credit cards and debit cards are accepted in Spain. ATMs are widely available, even in small towns, and you can use your four-digit pin number.
Living in Spain - VAT
Spainīs internal sales tax is known as IVA. Unlike in the UK, where VAT is a uniform 17.5%, Spain applies IVA at various rates between 7% and 33% depending on the item or service being provided. Food and wine and most basic purchases attract 7% IVA. Most goods and services (including the utilities to your Spanish property) are charged at 16% while for luxury items (including cigarettes) IVA is a whopping 33%.
Living in Spain - travellersī cheques
While travellersī cheques are a secure option, they are not always a convenient method of carrying funds whether you are living in Spain or are just on your holidays. In Spain, few hotels now exchange them, so you have to visit a bank or exchange bureau.
Living in Spain - banking hours
Official banking hours are 09.00 - 14.00 hrs, Monday to Friday; 09.00 - 13.00 hrs on Saturday. To open a bank account you need either your passport or your residency identity card (NIE). There is a little form filling (often available in English) and most major banks now offer online banking.
In Spain, banking is rather like it used to be in the UK. If you have bought Spanish property and are living in Spain on a permanent basis, you will find that staff at your local branch will quickly learn to recognise you and will address you by your name.
The main banks are La Caixa, BBVA, Grupo Banco Popular, Santander Central Hispano and Solbank.
Spainīs economy, and the continuing popularity of Spanish property
Since 2004, when Spain voted in the Spanish Socialist Workers Party to lead their Government, significant labour and economic reforms have been put in place and have led to a drop in unemployment. However, at 8.7% (2006) this is still above the EU average, as is inflation. More positively, growth reached 3.4% in 2005 led by strong domestic demand.
Spainīs most important trading partners are the EU, Japan and the countries of Latin America while the major industries include agriculture, fishing, construction, wine, cement, chemicals, engineering, petroleum refining, forestry and timber, textiles and telecoms.
Another major force of the Spanish economy is tourism which contributed more than 12% of the countryīs GDP of 904 billion Euros in 2005. About 17million Brits take their holidays in Spain or visit each year for other reasons, and an estimated 600,000 have settled here after buying Spanish property.
Construction is another cornerstone of the economy. It is a booming industry, as can be seen by the numbers of major infrastructure projects and housing developments currently in progress across the country. A significant proportion of the Spanish property being built is intended for foreigners who want to take their holidays in Spain or to join those already living in Spain permanently. Such is the level of demand, house prices have almost doubled since 1998.
