EQUITY RELEASE
Many people have benefited from the buoyant property market in Spain and properties worth €250,000 ten years ago could easily be worth a million today. Nice to know but it doesn’t help your cash flow! All this extra bricks and mortar money is doing is increasing your tax liability.
No one can dispute that there are plenty of benefits to owning a property in Spain but needless to say, the real estate agencies and developers who work hard to sell you a property will not always inform you of the financial burdens involved once you own it. The greatest concern for foreign residents is inheritance tax. Even your spouse is not exempt from inheritance tax and the tax free allowance is just €15,957.
If the beneficiaries of your estate, should you meet your demise, are not direct relatives, the situation regarding inheritance is quite dire. Non-direct relatives include step-children and “common-law” spouses for example.
The solution is to release some of the equity in your property and a number of schemes are available to do just that. By using your property as security for a loan, you reduce the assessable value for inheritance tax purposes by the same amount as the loan. For example if you borrow 80% of the value of your property (effectively releasing the money), you will reduce the amount of inheritance tax payable by more than 90%!
You can opt for a lump sum of cash to spend at will and the remainder of the loan will be invested by the lending bank – any interest is paid by your returns and any surplus can provide a tidy little income.
If you’d like to learn more about the various schemes available and what would be best for you, contact us today.
Many retired people on the Coast are finding it more difficult to meet their ever-increasing costs of living from their pension or investment income. At the same time the value of property has continued to rise at alarming rates.
We are able to utilize this capital growth in your property to increase your income.
Would you like immediate access in cash to part of the capital value in your property. The funds advanced can be used for whatever purpose you desire, be it a World cruise, a new car or simply to pay off existing debts.
Let the capital tied up in your property work for you to increase your wealth. Property prices continue to rise but these gains can be increased by releasing capital from your property and investing the funds in accordance with your wishes to produce additional capital growth.
All the above is possible due to our collaborations, working in recognized and regulated areas and using the expertise of proven investment managers.