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PROPERTY

Why I swapped London life for a tiny village in northern Spain

Marc Furnival is a British architect also registered in Spain, who now lives and works in Asturias, the mountainous and coastal region of northern Spain.

Why I swapped London life for a tiny village in northern Spain
Photo: Marc Furnival / Iberia North

After many years of visiting the area, in 2014 he sold his flat in London to live permanently in northern Spain in a house he had built in the mountains. 

He runs Iberia North, an international property agency and architecture practice.

My first trip outside the UK was to visit Spain in 1992 for the World Expo in Seville, as an impoverished architecture student. Being a first trip ‘abroad’ it all seemed very cultural and culinary, and I liked it.

After graduating during a previous recession in the early 1990s, I went to New York and lived for a couple of years there to pay for my post-graduate studies. Whilst there I met Olga, who is Spanish from La Rioja. She is now my wife.

Later travels took me to Shanghai for a year designing new cities, but the one that led to Asturias, albeit indirectly, was after spending almost a year in the southern cone of South America, including living in Sao Paulo briefly, but in particular the amazing national parks of central Chile.

Whilst taking a short re-grouping sabbatical with my wife’s family in Logroño, capital of La Rioja, by chance a friend who is a mountain guide was passing through on her way to Asturias, so on a spur of the moment decision we decided to go with her.

On seeing the mountains and lowland forest of Picos de Europa, they reminded us so much of the mountains of Chile we had so recently loved hiking through.

The Picos de Europa are so named, as historically they were the first thing you saw of Europe when returning by sailing ship from the Americas.

These mountains and Asturias are held dear to the Spanish as, although now very well connected by road and air, they seem so distant culturally from what Spain is more commonly known for. Also that Asturias, Patria Querida (Asturias, my beloved land) is a national drinking song for late night revellers.

Once installed in a small mountain village, after a hearty lunch, a hot summer's day took us to a shaded mountain walk along the River Casaño, and passing a village along the way we saw a derelict stone barn for sale.


The stone barn, in ruins.

Not having even been thinking about buying a property, we called the owners anyway. They wanted the exact amount of money we had left after returning from China and Australasia, so that was that. We headed back to La Rioja, packed up and went to London to raise the money to renovate the barn.

After eight great years in London, whilst working on neighbourhood regeneration, I was thinking increasingly more about the almost clichéd adage of the ‘work-life balance’, but wanting to explore what that actually might mean in terms of achieving a more integrated way of living.

Having just finished renovating the small mountain house, after many years of paperwork, and construction trials and tribulations, it felt like the right time to sell up in London and take the plunge full time to live there, which is in a village of only 20 or so inhabitants.


The final house, after renovation.

For more about his house, look at the website

The issue of engaging and integrating with the place in which you live, or even are just visiting, has always seemed important. Why travel if you don’t? For me, part of travelling has always been looking for a place that has inherent in its culture the things in life that you have come to enjoy.

Asturias has that. There are beautiful mountain ranges with mixed forest, mountain deer, wolves and even bears in some places. Asturias is full of places to discover.

Dramatic mountain ranges emerging from beautiful forests with stone shepherds’ cabins off the beaten track; a green, unspoilt coast with pretty fishing villages and crystal clear rivers running down to secluded beaches below clifftop walks with spectacular blowholes spraying up on wild, stormy days; and cultural, small cities with bustling historic streets and traditional farmers markets, and good restaurants, including eight Michelin stars, in restaurants dotted around, often in, mountain villages.

Of course, as anywhere, living in a more rural area has its pros and cons. But having lived in large cities for many years and now a more rural area, there is not such a distance between the urban and the rural as we might think. Perhaps not having all the cultural highlights that you might have in large cities is an issue, and to an extent its true. But do we need to have 200 theatres, as I had had in London?

You start to learn new skills. I can now build stone walls and am an official cheese taster for the local blue cheese, Cabrales. 

But, it's not all just rural, there are many art exhibitions, theatre, concerts and world cinema an hour away, which is the time I used to spend travelling across London to see a show or friends. But now I can see mountains from my window.

So after oscillating between cities and mountain villages, I am now settled in a market town, where I have based my property and architecture business, although I cover the wider area of North-West Spain. This takes me out and about a lot so I get to know the area quite well and meet a lot of different people.

READ: 10 point guide to buying property in Northern Spain

Iberia North is a bespoke property agency presenting interesting homes from across the region. Based in Asturias, we introduce local properties to an international market. We also work with estate agents in the area to find particular properties either directly or as a commission. Our involvement starts from the initial search through to purchase, then design and construction, when required. 

READ ALSO: Spanish property of the week: An entire village nestled in the Picos de Europa

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BANKING

What you need to know about investing in index funds in Spain

Index funds are considered a safer and more passive way of investing for those with little financial knowledge. However, understanding what they are, the best funds available, and how they're taxed in Spain is key before investing your money.

What you need to know about investing in index funds in Spain

What are index funds?

According to a basic definition by Banco Santander, “index investment funds are collective investment undertakings whose investment policy strives to mimic a certain index.”

What does that actually mean? And what is being mimicked here? Let’s look at an example. An index fund tracking the Vanguard Global Stock Index, for example, will put together an asset portfolio that essentially mirrors, or is similar to, at least, the Vanguard portfolio, in terms of composition. 

So that means that if the Vanguard Index has any major changes in terms of portfolio makeup, the fund manager (more on the best of those in Spain below) changes your index fund to reflect that change.

Often in Spain index funds would be linked to the IBEX 35, Spain’s main stock exchange, but many people invest in regional or global funds too. Besides that, index funds basically function in the same way as other funds: the money in the fund is used to buy and sell assets to make profit.

Generally speaking, the benefits of index fund investing are their low cost, the little financial knowledge and time investment required from the investor, and their diversification. The drawbacks are the lack of downside protection when there are losses, the lack of choice in index composition, and the fact that your investments can’t ‘beat’ the market.

READ ALSO: The best high-yield savings accounts in Spain

How profitable can index funds be?

Owing to the fact that the entire point of index funds is to mimic a particular index, the way we think about profitability is slightly different than with other forms of investment.

In that sense, there’s really no such thing as a ‘good’ or ‘bad’ index fund based on its performance. How well the index fund performs is better thought of as how well it replicates the index it is supposed to be mimicking.

According to Rankia, a Spanish investment service and comparison site, index funds vary wildly in terms of returns, but compound annualised returns ranging from as low as -40 percent in the worst case examples to 55 percent profits in the best.

Obviously, how much you make in cash terms depends on the size of your original investment in the fund.

Can you invest in foreign index funds in Spain?

Yes, you can. In fact many people do, and fund managers often recommend doing so.

In Spain, the main fund managers that offer index funds include iShares, EBN Bank, Amundi, Vanguard, Pictet, Bankinter, Caixabank, BBVA, and Credit Suisse.

Which are the best index funds to invest in from Spain?

Most index funds are grouped on a regional basis, so there are several funds that mirror European markets, North American markets, the Pacific region markets, and so on, as well as broader global index funds.

According to Rankia, some of the best global index funds to invest in from Spain include:

Fidelity MSCI World Index Fund P-ACC-EUR
Total Expense Ratio (TER): 0.12 percent
3-year return: 11.73 percent

Vanguard Global Stock Index Fund EUR Acc
TER: 0.18 percent
3-year return: 11.63 percent

Amundi Index MSCI World – IE (C)
TER: 0.19 percent
3-year return: 11.51 percent

Vanguard ESG Developed World All Cap Equity
TER: 0.20 percent
3-year return: 9.29 percent

Vanguard Global Small-Cap Index Fund
TER: 0.29 percent
3-year return: 7.37 percent

Amundi Index FTSE EPRA NAREIT Global – AE (C)
TER: 0.34 percent
3-year return: 3.17 percent

How are index funds taxed in Spain?

Under the Spanish tax system, index funds are taxed as savings income as part of the IRPF (Spain’s income tax) and are included as capital gains and losses, as if they were any other type of stock market shares or investment product.

However, one of the advantages of index funds over other forms of investment is that if you sell one index fund in order to buy another, you don’t pay for the capital gains obtained because it is considered a transfer from one fund to another and is therefore exempt from taxation.

This makes it one of the best investment options if you want to get a higher return on your earnings via compound interest because you can take advantage of these capital gains to reinvest them instead of paying them in taxes.

As index funds in Spain are taxed in the same way as any other investment products that is subject to savings rates, they are taxed at the following rates:

19 percent for capital gains of less than €6,000

21 percent for capital gains between €6,000-€50,000

23 percent for capital gains in excess of €50,000

READ ALSO: Bank overdraft in Spain: What are the risks and penalties?

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