MORTGAGE IN SPAIN

I am English citizen - can I get a mortgage in Spain?

Yes, there is no problem for you to get a mortgage as long as you can prove your income. (Wage slips, Bank statements, P60, Self-employed (2 years books), pension or other tax declaration from other country.

How much can I borrow?

The maximum amount that will be advanced is 80 % for a resident or non-resident of the value of the property, or the purchase price whichever is lower. Self-Certification mortgages can be obtained for up to 60% of the value of the property.

Can I get a mortgage on any type of property?

Loans are now available to purchase of any type of residential property, whether a small apartment, townhouse, large villa, traditional finca or new development.

How long does all this take?

Once you have decided that you want to go ahead, arranging a mortgage secured on a Spanish property it will usually take 2- 3 weeks.

Do I need insurance on my property?

Yes, it will be a condition of your mortgage that fire cover to protect your property is taken through an approved insurance company.

Are there any redemption penalties?

Redemption penalties (known in Spain as early repayment commissions) are applied by almost all banks. These vary between 0,5 - 1,5%.

How long repayment period can I get?

You can have your mortgage from 10-40 years, and Interest Only for up to 5 years.

How much does it cost to value my property?

The Bank will appoint a valuer from the Bank's panel of valuers to carry out a survey for mortgage purposes, the cost of which, (€250-500), is to be met by you before the valuation is undertaken. A Pre-Valuation can be arranged by us Free of Charge.

Capital Gains / Inheritance tax

A person over 65 sells his principal residence in Spain, is Capital Gains Tax payable?

If he is a resident taxpayer and has lived in the property for three years, No tax is payable. However, a non resident is subject to capital gains tax at 35% on any gain realized.

In relation to the sale of a Spanish property, what expenses and costs are allowable for the purpose of calculating the capital gain?

The following expenses can be deducted: Professional fees paid on the purchase and sale, notarial fees, registry fees, stamp duty or IVA paid on the purchase, local authority plus valia tax.

We have been told that provided we have a Spanish Will, no Inheritance Tax will be payable upon our deaths. Is this true?

It is certainly not true. A Will simply helps to identify the beneficiaries and enables them to obtain legal title to their inheritance once the relevant tax has been paid.

I own a property in Spain, how will it be valued upon my death for Inheritance Tax purposes?

The law is very specific. The value to be used is the greater of: escritura value, valor catastral or the open market value. The valor catastral, multiplied by a factor of between 2.5 and 3, is frequently used as a convenient means of assessing the value.

When does the Inheritance Tax have to be paid?

Quite simply: within six months of the death. In certain circumstances this could be extended to twelve months but interest would then be added.

What are the major differences between Death Duties in the UK and Inheritance Tax in Spain?

In the UK it is the estate of the deceased that is subject to taxation. In Spain it is the individuals who inherit that are taxed. The other major difference is that there is no inter-spousal exemption in Spain. When a property is in the joint names of a couple, on the death of one partner the surviving spouse must pay inheritance tax on the value of the half he or she inherits.