Mo. - Fr., 9 a.m. - 7 p.m.
Palma de Mallorca · Zürich
EXPERT CONSULTATION IN PUERTO DE ANDRATX
Finanzkontor SL offers Tax Advice for Non-Residents in Spain
Tuesday: With emphasis on "Rentals".
Wednesday: Property evaluations by an real estate assessor
Thursday: Mortgage Advice
This service is free of charge and without obligation! Please call us to fix a meeting.
You have enough own capital for the purchase of a Spanish property? Read here why it is still worthwhile to have a local bank participate in the financing of the property.
Rates in Spain are currently among the cheapest in Europe. Mortgage rates in Spain can be up to 2 points below the less expensive mortgage loans across the rest of Europe. This means that by applying for a loan with the purpose of purchasing property in Spain and investing your hard-earned savings in an offshore investment fund which offers returns of up to 10% at only moderate risk, you can earn up to 4 percentage points. This is something every experienced fund manager can confirm.
Under the Spanish Income Tax Act interest paid on your mortgage is deductible from you overall tax bill. Thus, your annual tax return and the burden of yearly costs on the property are reduced.
A mortgaged property definitely appeals to potential buyers. A buyer who is himself in need of a mortgage will benefit from a reduction of up to 2.5% of the overall purchase costs if he takes over your property with a mortgage loan. The buyer of the mortgaged property can save stamp duty (currently at 0.5% of the mortgage capital plus interests) and mortgage opening commission (about 1% to 2% of the mortgage capital). This is enough for many purchasers to make up their mind to choose your property rather than one without a mortgage.
Although banks are no lawyers and no substitute for professional legal advice, they do carry out investigations as to the legal status of the property and provide more protection fo the buyer. Bear in mind that you creditor is just as interested as you in having a clean title to the property which serves as security for the money you are borrowing.
For non-resident borrowers, a Spanish property is in part a private and in part a commercial investment. If you have the budget to buy a property by cash, had you not better keep part of the money as a safety net? What usually happens is that exactly when you don't have any savings left, you will need them most and those who have been through this know how useful cash savings can prove at certain times of our lives. Make your life more secure and do not spend more than you can afford. And if you can afford it, borrow!
It is one of the rather harsh facts of life that as the years go by and we grow older, we become less and less attractive business partners for any lending institution. Since mortgage loans are usually repaid over long periods of time (up to 30 years for resident debtors), lenders want to make sure that borrowers are employable during all of the repayment period. Most lenders want their loans to be repaid before the borrower reaches retirement in order to ensure the existence of uninterrupted cash inflows to cover the repayment of the loan.